Royal Dutch Shell Drops Two ‘Bombs’ in One Week

Royal Dutch Shell Drops Two ‘Bombs’ in One Week | 01/03/13
by John Brian Shannon John Brian Shannon

First came the announcement this week by Shell senior executives that oil extraction in the Arctic would be postponed for the second year in a row, and second is yesterday’s announcement foreshadowing the company’s plan for the future, Shell Sees Solar As The Biggest Energy Source After Exiting It in 2009.

The New Lens Scenarios Europe Shell report depicts two different energy policy scenarios, predicts that “photovoltaic panels will be the main power source by 2060 or 2070”  (depending on which scenario) and “lower costs and state support will boost solar to about 600 gigawatts in 2035” – worldwide totals.

What might lie ahead 50 years from now… or even in 2100? We consider two possible scenarios of the future, taking a number of pressing global trends and issues and using them as “lenses” through which to view the world.

The scenarios provide a detailed analysis of current trends and their likely trajectory into the future. They dive into the implications for the pace of global economic development, the types of energy we use to power our lives and the growth in greenhouse gas emissions.

The scenarios also highlight areas of public policy likely to have the greatest influence on the development of cleaner fuels, improvements in energy efficiency and on moderating greenhouse gas emissions.

Mountains

The first scenario, labelled “mountains”, sees a strong role for government and the introduction of firm and far-reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources – making it the largest global energy source by the 2030s – and accelerate carbon capture and storage technology, supporting a cleaner energy system.

Oceans

The second scenario, which we call “oceans”, describes a more prosperous and volatile world. Energy demand surges, due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2060s solar becomes the world’s largest energy source. – Shell

According to information compiled from Bloomberg New Energy Finance and the International Energy Agency, solar photovoltaic (PV) capacity has grown to about 102 gigawatts worldwide in 2012 – which is up from 1 gigawatt globally in 2000.

Since year 2000, an average of 10 gigawatts of PV solar, per year, has been very unevenly added to the world’s electrical grids, but if PV solar installations were to grow at the same rate as the 2000-2012 timeframe, just 450 gigawatts of PV solar would be installed by 2035 — not the 600 gigawatts predicted by the report. The growth rate for PV solar has been astonishing for a new kind of energy for utility companies — and additionally so, considering it is battling with the big boys of the energy world, oil & gas, coal and nuclear. Regardless of past challenges, strong growth in PV solar is forecast until 2100.

All of this means that PV solar is set to grow dramatically between now and 2035, let alone by 2070.

Peter Endig/dpa via AP Images
Shell Solar GmbH 2004 | World’s then-largest solar power plant in Espenhain, Germany | Image credit courtesy: Peter Endig/dpa via AP Images

The report has PV solar power moving to number one position to provide at least 38% of worldwide energy supply (well up from today’s ranking of 13th place) to become the predominant kind of energy by 2100.

By 2100, energy from oil will account for only 10% of worldwide energy use and natural gas will account for just 7.5% of the worldwide total, Shell said.

Due to enhanced Carbon Capture and Storage, clean combustion technology and the use of CO2 gas for industrial processes by 2100, Shell sees “global emissions of carbon dioxide dropping to near zero by 2100”.

As all of the above plays out, natural gas demand is expected to surpass the historic demands seen for any other kind of fuel and the quote from the report’s main authour Jeremy Bentham, speaks volumes about the anticipated level of demand for the gas.

“The underlying pent-up demand for gas is very strong…we see it being sucked up, every molecule.”– Jeremy Bentham

The overall demand for energy will double in the next 50 years due to population growth and increases in living standards, and natural gas will eventually enjoy the highest level of fuel demand in history. But by 2100, the world will mainly run on PV solar, while other kinds of energy will contribute small percentages to the overall global energy mix.

It now appears that Shell would rather ‘switch than fight’ the move to PV solar. It is likely to be the first of many such switches in the global energy industry.

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Clean Energy: How To Get There From Here!

by John Brian Shannon

Everyone knows more electricity is needed in developed nations and electrical needs in developing nations are skyrocketing. No problem there — everyone deserves to live a good lifestyle and enjoy our modern technology to the fullest.

The problem occurs in the means used to generate that electricity. Some kinds of electrical power generation cause huge billowing clouds of pollution 24-hours per day, every day of the year.

All of this adds up to astronomically high costs for electrical power producers and users, which can be measured in several different ways.

For instance, new conventional nuclear  power plants can cost up to $20 billion dollars each. Added to that cost, is the cost incurred to store thousands of tons of (so-called) spent nuclear fuel. Some spent fuels must be stored in air-conditioned bunkers for up to 20,000 years, with never more than 36 hours of A/C interruption. The costs of that are so high, they can’t even be calculated.

New coal plants cost about $250 million dollars/per hundred megawatts. A hundred megawatts isn’t much, by the way – enough to power 16,000 power-hungry A/C homes in the U.S. or about 29,000 homes in China. Some coal-fired power plants cost upwards of $1 billion dollars. The cost of the coal must be added to the equation from day one – the price of which rises and falls typically between $80.00 and $160.00 per ton, plus the significant transportation costs. It may interest you to know that China burned 3 billion tons of coal last year, emitting 7.2 billion tons of CO2 and other toxic gasses. Approximately 410,000 Chinese people die every year as a result of pollution-related deaths.

Natural gas power plants are clean, they cost a little more than comparable coal plants and the only real drawback is they emit huge volumes of CO2. Unlike coal, they emit little in the way of other toxic gasses or soot. Again, a costly and continuous and supply of natural gas must be available every day of the year.

No matter which choice is made, the construction of electrical generation power plants incurs high costs to nations — and the cheapest options come with the highest fuel and health-care costs.

In the United States, nuclear power receives significant subsidies on the order of $3.50 billion per year on average and oil and gas receive $4.86 billion subsidy dollars per year on average.

fossil-fuel-subsidies-490x407

We can see from the chart above that in the United States most forms of electrical power generation are heavily subsidized. Who could afford electricity otherwise?

If solar, wind and geothermal energy were subsidized at the same per kilowatt rate as Oil & Gas, Coal, or Nuclear — total U.S. emission levels would drop dramatically and Americans would be breathing much cleaner air.

National health-care costs would drop, acid rain damage would decrease to near zero, crop damage from power plants would become a thing of the past and meeting international agreements such as the Kyoto Protocol would become boringly simple.

To have the enjoyment of breathing clean air and the other benefits listed above, all governments should calculate the highest subsidy they pay per kilowatt hour and then begin paying ALL electricity providers that same per kilowatt hour subsidy.

Solar power, wind power and geothermal would then become ultra-competitive with coal, N-power and Oil & Gas. Every large rooftop area, such as big box retail outlets like IKEA stores for one good example, could assist national power production and air-quality goals by lowering demand on the grid and potentially adding power to it, while helping to enhance the health of citizens.

One nation has already begun such a program and is right on schedule. Denmark has decided that all energy, including transportation energy(!) will come from renewable sources by 2050 and they have made substantial progress in only a few short years.

Even with the patchwork and grossly unlevel subsidy regimes in place in the United States, this transition is already occurring. Organizations from the U.S. Navy, to IKEA and WalMart, some cities and towns, the Big Three auto manufacturers and many more businesses and organizations, are converting their unused rooftop spaces and vacant land into clean power stations — thereby tapering the need for behemoth, pollution-spewing power plants.

If governments standardized the subsidies they already pay for Oil & Gas, Coal and Nuclear power (instead of paying billions of dollars to some power providers — whilst paying pennies to others) we would all breathe a lot easier.

We need oil & gas, coal, natural gas and conventional nuclear power to feed our grids, what I’m  advocating for is directly comparable subsidies for all electricity providers, including green energy — and there are no real reasons why such subsidy levelization couldn’t soon happen in every country.

ABOUT JOHN BRIAN SHANNON

I write about green energy, sustainable development and economics. My blogs appear in the Arabian Gazette, EcoPoint, EnergyBoom, Huffington Post, United Nations Development Programme, WACSI — and other quality publications.

“It is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.”

Green Energy blog: http://johnbrianshannon.com
Economics blog: https://jbsnews.wordpress.com
Twitter: @JBSCanada