Shell CEO talks zero emissions
Shell CEO Ben van Beurden pushes to establish a post-fossil fuel identity for company.
Royal Dutch Shell had been turning out about 2.7 million barrels of oil each day until the novel coronavirus took hold of the world. Demand for oil, the company’s core product, dropped almost a third in April, and the price of West Texas Intermediate briefly dipped into negative numbers for the first time.
It’s not easy to run an oil major when people suddenly stop needing oil. This precarious moment for oil makes
Chief Executive Officer Ben van Beurden’s push to establish a post-fossil fuel identity for the 113-year-old company more essential — and difficult.
As if to prove the point, van Beurden released a new climate plan in the middle of a historic oil price crash. The goal is to cut all emissions to net zero by 2050. Every internal combustion engine, every power plant, every petrochemical factory will one day be required to capture their emissions, or plant forests in compensation.
Van Beurden, the father of four, was interviewed when oil prices were well below half their pre-pandemic levels. The interview has been edited and condensed for clarity.
How do you face your children’s questions about climate change?
My children span the ages of 10 to 25. On the 25 end of things, we have deep philosophical discussions. . With the 10-year-old, of course, you can’t. What you can do with a 10-year-old is to say, “Do you trust Papa to do the right thing for you?” And she will say, “Yes, I trust you. … I know you will do the right thing for me.”
If I asked society, “Do you trust me to do the right thing?” I think I know what the answer is. So we have to work harder to reestablish trust where we have lost it and to strengthen it where we haven’t.
What are you doing to gain back that trust?
It bothers me to no end that we’re being seen as almost an unwelcome player in the energy scene or in society as a whole. I don’t think that it’s deserving.
I fundamentally believe we have a core role to play in the energy transition: the capabilities that we have, the scale that we bring, the insights, and everything else. The very fact that, in this interview, you referred to us as an oil company is symptomatic of the problems that we are facing. We’re a much more sophisticated and integrated energy player.
Your climate plan relies on working with other industries in developing technology, helping your customers put net-zero emissions plans in place, or buying offsets for them. Has anything ever been done on this scale before?
The energy transition is massively complex. It will require orchestration on a scale that the world has never seen. If you don’t start with it soon, it’s going to be highly disruptive at the end or it’s not going to happen. And both are unpalatable conclusions.
All that will need a very heavy-handed government. Do you support that?
If we believe that somehow the market is going to take care of this, that you put a price on carbon and everything will sort itself out, or that we can shame companies into doing it, then I think we’re kidding ourselves. This needs a very significant interventionist approach and all industries have to be part of the intervention.
Does the pandemic change when the world reaches peak demand for oil?
I do think we will come out of this as a different society, maybe a radically different society. Attitudes will be different. Demand patterns may be different. We may see lower-for-longer demand. On the other hand, all the techno-economic challenges of the energy transition are still there.
The 2015 acquisition of BG happened when the outlook for liquefied natural gas was very bullish. It’s not so bullish now. How do you see the future playing out?
We still very much believe that with the current supplydemand outlook, this is a fundamentally strong sector. It’s the fastest-growing sector in the hydrocarbon space. We’re the ones best positioned to take advantage.