Sig­nals To A Brighter Fu­ture

Speak­ing at the Pow­er­ing Progress To­gether event in Lon­don, UK, Ben van Beur­den, Shell’s CEO, sets out how col­lab­o­ra­tion, an ac­cep­tance of mul­ti­ple an­swers and clear sig­nals from the world’s gov­ern­ments can un­lock a cleaner fu­ture for trans­port and beyond

Oil and Gas - - CONTENT -

This time last year my col­league, John Ab­bott, gave a speech to open this event. He spoke about sur­prises. A month later the Bri­tish gov­ern­ment came up with its own sur­prise: the plan to end the sale of con­ven­tional cars and vans. You might think that this would be an un­wel­come sur­prise for the CEO of an oil and gas com­pany. Ac­tu­ally, I like it. The rea­son I like it is be­cause it pro­vides a clear sig­nal that will en­able in­vest­ment and help move con­sumer at­ti­tudes. There is a lot of work to do to take the emis­sions out of pas­sen­ger road trans­port.

To­day, the UK has around 45,000 pure­elec­tric cars on the road, out of a to­tal fleet of around 31 mil­lion. That is a tiny pro­por­tion. The mar­ket needs help. The mar­ket needs clear sig­nals.

And the world, too, re­ally needs more clear sig­nals from its lead­ers. Be­cause there is a lot of work to do to meet the aims of the Paris Agree­ment: to re­strict warm­ing to well-un­der 2° Cel­sius;

to deeply cut global green­house gas emis­sions at the same time as meet­ing ris­ing de­mand for en­ergy.

Shell’s lat­est sce­nario, called Sky, looked at the scale of change the world might need to make. It looked at what meet­ing the Paris goals could mean. This sce­nario in­cludes a tripling of en­ergy ef­fi­ciency, an end to de­for­esta­tion and sub­stan­tial tech­no­log­i­cal ad­vances to solve chal­lenges like large-scale bat­tery stor­age. It in­cludes a mas­sive ex­pan­sion of wind and so­lar power gen­er­a­tion. That is just a small taste of the change that might take place.

In this Sky world, au­ton­o­mous ve­hi­cles could be­come truly com­mon. Trans­port man­u­fac­tur­ing could be rev­o­lu­tionised to the ex­tent that most ve­hi­cles would be based on the same stan­dard chas­sis. And ev­ery new pas­sen­ger car in the world could be elec­tric by 2050. This is change on a scale that can only hap­pen with a huge, co­or­di­nated, global ef­fort backed by deep re­serves of so­cial and po­lit­i­cal willpower. It re­quires peo­ple to make sub­stan­tial changes to their lives: what they buy, the homes they live in and how they get around. There is so much to do that the world has to be ef­fi­cient in its ac­tion, if it wants to be ef­fec­tive. Un­for­tu­nately, to­day, so much time, en­ergy and ef­fort is wasted on dis­agree­ing.

SO­LU­TIONS

So­lu­tions are so of­ten de­fined in op­po­si­tion to some­thing else.

More in­no­va­tion or more reg­u­la­tion? More gas-fired power or more re­new­ables? When it comes to gov­ern­ment-led car­bon pric­ing mech­a­nisms, should it be cap-and-trade or a tax? Well, in ev­ery case, it doesn’t mat­ter. Be­cause the world needs more in­no­va­tion and more reg­u­la­tion, more gas-fired power and more re­new­ables, and in some places cap-and-trade works bet­ter than a tax. We see the same in trans­port. In­ter­nal com­bus­tion en­gines against bat­tery elec­tric. Bat­tery elec­tric against hy­dro­gen. Bikes against cars. On all these and more, it doesn’t mat­ter. We need ev­ery so­lu­tion we can get, be­cause no one so­lu­tion meets all needs, in all places, at all times.

And to de­liver these so­lu­tions, there are so many tech­no­log­i­cal steps we must take. So much that peo­ple will need to ex­plore, ac­cept and em­brace. Driver­less cars, ride-shar­ing, own­er­ship mod­els…to name just a hand­ful.

We do not have time to waste on dis­agree­ing.

And that is why events like to­day are so im­por­tant. To bring peo­ple to­gether, ex­change ideas, find new so­lu­tions to­gether. And that is why I am so grate­ful you have all come here to­day.

Be­cause I deeply be­lieve that the world does not need one so­lu­tion or an­other. But one so­lu­tion and an­other. And an­other, and then some more.

We need bat­tery elec­tric ve­hi­cles. And we also need hy­dro­gen, liq­ue­fied nat­u­ral gas, bio­fuel. And, yes, we also need to fur­ther im­prove the in­ter­nal com­bus­tion en­gine. It will be around for a long time to come. And there is a thriv­ing mar­ket for older cars in the de­vel­op­ing world. 99% of cars im­ported into Kenya are sec­ond hand. In Uganda the av­er­age age of an im­ported car is more than 16 years. In Mex­ico the av­er­age im­ported car is 11-years-old.

CHANGE

The global sys­tem is chang­ing, but it takes a long time to change ev­ery­thing, every­where.

Many of you will re­mem­ber the time when leaded petrol was on sale. It was banned in Ja­pan as long ago as 1986, but it is still on sale to­day in Al­ge­ria - 32 years on. And re­mov­ing lead from petrol is far eas­ier than re­mov­ing car­bon from the en­tire trans­port sys­tem. The fact that it takes so long for the en­tire global sys­tem to evolve means it is even more im­por­tant for coun­tries like the UK to be act­ing now.

Shell is ac­tive in seek­ing ways to help im­prove the ef­fi­ciency of the in­ter­nal com­bus­tion en­gine, de­vel­op­ing cleaner fu­els and bet­ter lu­bri­cants in close part­ner­ship with ve­hi­cle man­u­fac­tur­ers. Not just to lower car­bon emis­sions, but air pol­lu­tion too.

And Shell is ac­tive on many other fronts.

When it comes to trans­port, Shell is in­volved with bat­tery elec­tric ve­hi­cles, bio­fu­els, hy­dro­gen and liq­ue­fied nat­u­ral gas, or LNG. And Shell is not just about fu­els. We are look­ing at so­lu­tions across the sec­tor.

That does not mean we are in­volved in ev­ery­thing. Please, do not ex­pect to see a Shell-branded au­ton­o­mous ve­hi­cle on your street any time soon.

But it is al­ready pos­si­ble, here in the UK, to use a Shell charg­ing point to recharge the bat­tery of your elec­tric car at home with elec­trons sold to you by Shell. That is be­cause Shell now owns the power com­pany First Util­ity. And it also owns NewMo­tion, one of Europe’s largest providers of charg­ing points for elec­tric ve­hi­cles.

We have also started putting recharg­ing points at some Shell fore­courts in the UK and, in part­ner­ship with high-pow­ered charg­ing net­work op­er­a­tor ION­ITY, across Europe.

IN­VEST­ING

It makes sense to in­vest in this area. Bat­tery elec­tric ve­hi­cles are ex­cel­lent for per­sonal travel cov­er­ing rel­a­tively short

dis­tances, in­clud­ing so-called last mile de­liv­ery ser­vices. As you know, it can also be used for buses.

But we need other so­lu­tions too. Hy­dro­gen, for ex­am­ple.

Many of you here al­ready un­der­stand that hy­dro­gen en­joys the ad­van­tage of hav­ing a higher en­ergy-den­sity com­pared to bat­ter­ies. Higher en­ergy den­sity brings longer range and the po­ten­tial to han­dle the big­ger loads hauled by trucks. I know the UK is look­ing into hy­dro­gen­pow­ered trains. And it is quick to re­fuel with hy­dro­gen.

It is such ad­van­tages that have per­suaded Shell to open two hy­dro­gen fill­ing sites in the UK with four more on the way. Shell is a found­ing mem­ber of the Hy­dro­gen Coun­cil which seeks to pro­mote in­no­va­tion glob­ally. We are also part of a joint ven­ture to in­stall a na­tion­wide net­work of hy­dro­gen fill­ing sta­tions in Ger­many. It is al­ready pos­si­ble to drive a hy­dro­gen-pow­ered ve­hi­cle from the north­ern tip of Den­mark to Lake Garda in Italy.

And Shell is build­ing hy­dro­gen fill­ing sta­tions in Cal­i­for­nia too, in­clud­ing, sig­nif­i­cantly, a hy­dro­gen stop for fuel cell trucks in one of the world’s busiest ports, Long Beach. Toy­ota is build­ing the trucks, Shell is build­ing the fill­ing sta­tion.

As an aside, that Toy­ota truck project will be linked to a bio­gas plant which uses the waste pro­duced from nearby dairy farms. Es­sen­tially, Cal­i­for­nia is go­ing to be get­ting the world’s first hy­dro­gen trucks to be pow­ered by cows.

SCALE

Yet, even as so­lu­tions such as bat­tery­elec­tric and hy­dro­gen build to­wards sig­nif­i­cant scale, the world needs yet other so­lu­tions that are avail­able right now. One of these is LNG, which can work well not only for trucks but also for ship­ping. It is cleaner to use than both diesel and heavy fuel oil, es­pe­cially in terms of air pol­lu­tants.

Sov­com­flot, one of the world’s lead­ing ship­ping com­pa­nies, will de­liver the first crude oil tanker pow­ered by LNG this month with a sec­ond one on the way next year. In 2019, cruise op­er­a­tor Car­ni­val, will start ad­ding LNG-pow­ered ships to its fleet. Shell will pro­vide LNG to both com­pa­nies. Gas-to-liq­uids tech­nol­ogy means Shell can al­ready pro­vide a di­rect re­place­ment for diesel in trucks that comes with much lower lev­els of air pol­lu­tion.

In fact, if you watched the royal wed­ding in May, the power for a lot of the cam­eras and light­ing came from gen­er­a­tors be­ing pow­ered by this fuel. Un­mod­i­fied diesel gen­er­a­tors run­ning on much cleaner-burn­ing fuel.

Low-car­bon bio­fu­els can help with in­ter­nal com­bus­tion en­gines right now. And the next gen­er­a­tion of bio­fu­els also has po­ten­tial for avi­a­tion. Shell is al­ready one of the world’s largest blen­ders and dis­trib­u­tors of bio­fu­els. And Shell is look­ing to de­velop other bio­fuel tech­nolo­gies, such as waste-to­fuel and bio­gas.

We are look­ing at other so­lu­tions too. But, as I said, Shell is not in­volved in ev­ery­thing. I know many of you are work­ing on other ideas, other so­lu­tions. That is good. No, not just good, but es­sen­tial. I want to hear about your so­lu­tions, I want to know if we can work to­gether.

Be­cause the cli­mate chal­lenge is vast. To meet it the world needs gov­ern­ments, NGOs, busi­nesses, con­sumers, aca­demics and ex­perts – all of us, work­ing sideby-side. And we must get help to do so. Help in the form of clear di­rec­tion from gov­ern­ments and reg­u­la­tors. The UK’s plan to end the sale of con­ven­tional ve­hi­cles is a good ex­am­ple. And I hope the UK is about to give more di­rec­tion, with De­fra look­ing at air qual­ity, the depart­ment for trans­port due to pub­lish its “Road to Zero” strat­egy and the Trea­sury look­ing at fuel duty. But the clear­est, most pow­er­ful and most wel­come piece of di­rec­tion would come from gov­ern­ment-led car­bon pric­ing mech­a­nisms, pulling both con­sumers and busi­nesses to­wards lower-car­bon choices. The ef­fect of the UK’s car­bon price floor, which has helped to sig­nif­i­cantly lower CO2 emis­sions in the power sec­tor, is an ex­am­ple of the po­ten­tial wait­ing to be tapped around the world.

AF­FORD­ABLE

With clear, co­or­di­nated, con­sis­tent sig­nals such as these, busi­nesses can in­vest in the so­lu­tions the world needs. And with that in­vest­ment, these so­lu­tions can be pro­duced on ever-in­creas­ing scale. With co-or­di­na­tion, busi­nesses can stan­dard­ise. And with scale and stan­dard­i­s­a­tion comes lower costs for the con­sumer. Lower costs for bat­ter­ies and fuel cells, charg­ing and re­fu­elling points, for low-car­bon so­lu­tions cov­er­ing buses and trucks, cars and vans, trains and planes.

Much of the chal­lenge in­volves pro­duc­ing so­lu­tions that cus­tomers are will­ing to pay for. That means more than hav­ing good so­lu­tions. It means hav­ing good so­lu­tions that are af­ford­able. Be­cause ul­ti­mately, tack­ling cli­mate change comes down to how peo­ple live their lives and the choices they make. It is about what peo­ple will trust, what they will pay for, what they will vote for.

Peo­ple need to be per­suaded. And they will only be per­suaded by a united, co­he­sive, col­lab­o­ra­tive ap­proach. The sort of ap­proach that re­sults in good prod­ucts at af­ford­able prices. And ex­actly the sort of ap­proach I know we are go­ing to en­joy to­day.

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