Shell has pledged to reduce its carbon dioxide emissions by 50 percent over the next five decades as it shifts to more renewable energy, including biofuels, and boosts operational efficiencies, in the latest sign that one of the world’s top Big Oil players is determined to move away from its principal business.
Yesterday, CEO Ben van Beurden told CNBC "Our view is if society needs to tackle the dual challenge of climate change but also accommodating higher demand for energy — as of course the energy poor need to get access to energy as well — we have to reduce the carbon footprint of the energy system as a society to a net zero level."
This may sound strange, or perhaps even cynical, but Shell has been signaling for a while now that its plans for a shift away from fossil fuels are serious. Now, as part of efforts to reduce its carbon footprint, one of the largest oil and gas companies in the world will also invest in carbon capture and storage projects, increasing its total expenditure on renewable energy from US$1 billion annually to US$2 billion. Still, as CNBC notes, this is a drop in the bucket of its main spend on oil and gas, which is planned at between SU$25 billion and US$30 billion.
But natural gas will also help Shell move away from heavy emissions. In fact, Van Beurden corrected his interviewer when he called Shell an oil company. “If anything, we are more a gas and oil company,” he said. “And on top of it, we are a much broader energy company as well.”
It seems this particular Big Oil player doesn’t want to be called that anymore, and is making an effort to transform its reputation. The acquisition of BG Group two years ago was a big part of that shift that a lot of observers took skeptically at the time, worrying about the debt pile Shell burdened itself with to pay for the acquisition. But it now seems the purchase was a very good decision: it turned Shell into the largest independent gas producer globally at a time when demand for gas is rising.
So, natural gas, renewable energy including biofuels, wind power, and EV charging networks – that seems to be the energy diversification plan of Shell. Yet, the company is not stopping there. Amid Amnesty International allegations that Shell needs to be investigated for complicity in abuses of human rights in Nigeria’s military suppressing protests in the oil-rich Niger Delta in the 1990s, the company said it will start reporting on the estimated carbon footprint of the people who use the fuels and other energy products it markets.
Where’s the connection? A further push away from oil and all the troubles it brings, including allegations of complicity in human rights violation. Shell clearly does not want to be seen as “an oil company.” It wants to be seen as an energy company that doesn’t just talk about cleaning up its act, but does it, and it does it in a responsible way. After all, reputation management is a big issue for oil—that is energy—companies.
By Irina Slav for Oilprice.com