Shell Lays Out Scenario to Halt Climate Change

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Shell Lays Out Scenario to Halt Climate Change

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Shell's "Sky" scenario relies on global compliance with the Paris climate agreement.

THE NETHERLANDS — Royal Dutch Shell foresees a future in which its own product — oil — nears obsolescence, as companies and consumers make the shift to more climate-friendly energy.

An early advocate of the Paris climate agreement, Shell has provided a hypothetical scenario called "Sky" that offers a vision for the future if the climate agreement’s recommendations are followed, reported the Washington Post. Per Shell’s model, meeting the goals of the Paris agreement will enable the planet’s warming to fall below a rise of 2 degrees Celsius (3.6 degrees Fahrenheit).

“A simple extension of current efforts, whether efficiency mandates, modest carbon taxes or renewable energy supports, is insufficient for the scale of change required,” the oil company states in its document, which imagines that by 2070, the world could achieve a net-zero emissions state. 

The document further argues: “The relevant transformations in the energy and natural systems require concurrent climate policy action and the deployment of disruptive new technologies at mass scale within government policy environments that strongly incentivize investment and innovation.”

In Shell’s Sky thought experiment, oil consumption would continue to rise through 2025, when its decline would commence. The Sky model predicts that oil consumption will fall below current levels by 2040. The hypothesis relies not only on a boost in electrification trends, but also a heavy shift toward solar.

Where does that leave Shell? The Netherlands-based company has vowed to cut its own carbon footprint around making its own petroleum products by 20 percent by 2035, with a further goal of cutting the footprint in half by mid-century.

Shell, which produced 3.7 million barrels of oil equivalent per day last year, is also wading into alternative fuels, including electric energy. 

Shell produced 3.7 million barrels of oil equivalent per day last year.

In October of last year, Shell purchased electric vehicle charging company NewMotion. As Convenience Store News reported at the time, Shell subsequently opened its first EV charging points in the U.K. and outlined plans for further expansion of the program. Through a Quest project in Canada and the Gorgon project in Australia, Shell is also pursuing carbon capture and storage technologies. 

If companies like Shell commit to de-carbonizing world energy, the future as envisioned in the Sky scenario might not be an impossibility, but it is still unlikely, Peter Fox-Penner, director of the Institute for Sustainable Energy at Boston University, told the Post.

“The greatest constraint is certainly not technology,” Fox-Penner said. “It is political and economic disruption to governments and economies who depend on the current system and who must find the funds to retire a huge capital stock early and rebuild it in place.”

Based in the Netherlands, Royal Dutch Shell is a global group of energy and petrochemical companies with operations in more than 70 countries. Houston-based Shell Oil Co. is an affiliate of the company.