THE ENERGY LADDER

As described by CEO Jeroen van der Veer, Royal Dutch Shell has developed 2 scenarios by which to predict the impact of climate change and growing world energy demand (which he describes as more and more of the world population climbing on “the energy ladder”). They call one “Scramble” and they call the other “Blueprints”: “Scramble is where key actors, like governments, make it their primary focus to do a good job for their own country. So they look after their self-interest and try to optimize within their own boundaries what they try to do. Blueprints is basically all the international initiatives, like Kyoto, like Bali, or like a future Copenhagen. They start very slowly but before not too long they become relatively successful. This is a model of international cooperation.”

As a specific solution, van der Veer refers in concrete terms only to “carbon sequestration” (which is a lot farther away from being produced on a commercial scale at competitive prices than wind or solar energy) and answers questions about New Energy with vague remarks about the cost of emissions and the effect of taxes.

He sees no problem with oil and gas supply, only with cheap oil and gas supply, and promises rising costs for fossil fuels. Isn’t that wonderful for him?

He acknowledges Al Gore’s role in bringing the world to understand the conjunction of climate change and energy policy but seems to have missed the part of the lecture about New Energy.

To his credit, van der Veer sees the handwriting on the wall: “…if the people say, “Hang on, we are really concerned about the climate and we’d better do something on carbon emissions,” that is in the end the powerful force which politicians and companies cannot ignore. And I think we are past that point.”

What he is saying, in essence, is that the cry for New Energy will be heard though he’s not going to listen.

There's no doubt the Royal Dutch Shell CEO's point about rising world energy demand is correct. But a rising tide lift's all boats and New Energy's boat runs on an endless fuel supply. (click to enlarge)

Oil Demand, the Climate and the Energy Ladder
Jad Mouawad, January 19, 2008 (NY Times)

WHO
Jeroen van der Veer, CEO, Royal Dutch Shell

WHAT
In an interview with the Times, van der Veer explains Shell Energy Scenarios to 2050: “Scramble and Blueprints”: “…two plausible and possible futures of the world energy system…”

NewEnergyNews believes this distinguished 60-year-old CEO will live to see his statement turned around: Fossil fuels will fade as New Energy emerges. (click to enlarge)

WHEN
van der Veer and Shell will present the “Scenarios” in detail at the World Economic Forum 2008 Forum (WEF), January 23 thru 27.

WHERE
- WEF is in Davos, Switzerland.
- The Shell “Scenarios” describes world issues.

WHY
- In the Shell scenarios, world population going from 6 billion to 9 billion by 2050 is a major driving force, making control of energy demand problematic.
- van der Veer considers the conjunction of booming demand/consumption of energy and the seemingly contradictory need to reduce emissions “the crux of the matter.”
- van der Veer says there is no tension between fossil fuels and New Energy. He says it is necessary to develop both. But in terms of solutions to burgeoning energy demand he only offers “clean” coal, which is a lot farther away from being produced on a commercial scale at competitive prices than wind or solar energy.

Veteran oil industry consultant Joseph Stanislaw presented this at a Houston oil and gas industry conference in December. van der Veer must not have been there. (click to enlarge)

QUOTES
- van der Veer: “…The Blueprints world is maybe a world that starts slowly and is not that easily feasible, but you see some early indicators that it is a realistic possibility…”
- van der Veer: “…there is no lack in itself of oil or gas, or coal for that matter. But the problem is that the easy-to-produce oil or easy-to-produce gas will be depleted or with difficult access. But if you look at difficult oil or difficult gas, which we in the industry call the unconventionals, such as oil sands or shales, they may be exploitable. But per barrel, you need a lot more technology and a lot more investments, and per barrel you need a lot more brain to produce it. It’s much more expensive…”
- van der Veer: “Thanks to Al Gore, and many others, the awareness is there. There is a kind of sense of urgency. Secondly, there is a preparedness to do things. Thirdly, do we agree who has to take what action? I think that is still a huge problem.”