Oil and gas - with us for the foreseeable future
21 May 2015
Shell chief executive Ben van Beurden gave a defiant performance at the company’s annual shareholders' meeting on May 19 as the oil major’s board was bombarded with questions about plans for Arctic exploration in the Chukchi Sea off Alaska and the risks that climate change poses to its business.
Shell CEO Ben van Beurden - Image: Shell
Shell’s Arctic programme is just one of several that has come in for heavy criticism from environmentalists. Its Canadian tar sands and Nigerian Delta operations are also highly contentious.
But he insisted that Shell was sensitive towards global warming and the environment, telling shareholders that the company was the first to acknowledge the link between CO2 emissions and climate change.
He also said that the scale of the safety precautions Shell was taking as part of its plan to drill for oil in the Arctic was “unprecedented” in the history of the oil industry.
But van Beurden accompanied this greener side with a much harder-edged analysis of real-world demands, at the company AGM in the Hague. He pointed out that an end to further investment now would create a 70 million barrel-a-day shortfall in supply by 2040.
As regards Shell's Chukchi Sea programme, van Beurden responded by questioning the logic of opponents to Arctic development. He said that some campaigners wrongly assume that Arctic drilling contributes more to climate change than production in other regions, when in fact its carbon footprint is relatively low.
“I’ve come to accept that people who have that logic – which I respect and understand – no amount of arguing, no amount of assurance, no amount of logic for that matter, will change the argument. You just have to respect that we have different views.”
The Shell CEO has a point. Too many opponents of individual drilling campaigns are anti-hydrocarbon fundamentalists with an unrealistic appreciation of future energy needs. Until they provide costed, real-world plans for hydrocarbon substitution in transport, energy generation and industrial applications, their contribution to the debate will be limited.
While every effort should be made to reduce pollution and emissions, renewables and alternative technologies are still a long way from being able to take up the slack. Because of this, oil and gas are going to be with us for the foreseeable future.