Climate

Shell: Conventional oil peaks within 7 years

The oil company with the best strategic planning says the day of reckoning is nigh:

World demand for oil and gas will outstrip supply within seven years, according to Royal Dutch Shell.

The oil multinational is predicting that conventional supplies will not keep pace with soaring population growth and the rapid pace of economic development.

Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the company’s staff this week that output of conventional oil and gas was close to peaking. He wrote: “Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand.”

peak-oil-cartoon.jpg

I am a tad surprised that Shell doesn’t understand just how much global warming will overwhelm all other concerns:

The boss of the world’s second-largest oil company forecast that, regardless of government policy initiatives and investment in renewables, the world would need more nuclear power and unconventional fossil fuels, such as oil sands.

“Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue,” he wrote.

We don’t “need” the climate-destroying oil sands, though Canada will probably continue developing them. Ultimately, this country — and the world — will have to be smart enough to ban their use (as California essentially has done with its low-carbon fuel standard) or we will not be able to save our livable climate.

Still, if Shell says conventional oil peaks within seven years, the world should listen.

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10 Responses to Shell: Conventional oil peaks within 7 years

  1. Lou Grinzo says:

    So, if supply keeps rising but demand rises by a larger amount, then we’ve still hit peak oil?

    Uh, no, we haven’t. Peak oil is the point of global rate of oil production, literally the all-time maximum supply. In terms of defining the date of peak oil, a much narrower view than we should be taking, obviously, supply not meeting demand isn’t an issue.

    And besides, Chris Skrebowski is right–the actual production peak will come in 2011 +/- 1 year.

  2. Albert says:

    They also lay out two scenarios in that piece:

    The first scenario, “Scramble”, envisages a mad dash by nations to secure resources. With policymakers viewing energy as “a zero-sum game,” use of domestic coal and biofuels accelerates.

    It is a world, said the Shell chief, where “policymakers pay little attention to energy consumption – until supplies run short.” [Sound familiar?]

    The alternative scenario, “Blue-prints”, envisages a world of political cooperation between governments on efficiency standards and taxes, a convergence of policies on emissions trading and local initiatives to improve environmental performance of buildings.

    Shell has not committed to either scenario. The oil company regularly uses scenario-planning to test the likely impact of widely divergent economic and political scenarios on its long-term strategy.

    Unsurprisingly, Mr van der Veer indicated that Shell preferred the Blueprints scenario but he expressed caution over the likelihood of it coming to pass without a global approach to emissions trading.

    [So basically if we don’t come up with a global approach to emissions trading (like, say…Kyoto) then everything is going to fall apart? Gee, it seems like “Scramble” would be a costly scenario that might hurt our economy. Yet it is clear that Bush prefers “Scramble.” Sigh. People should have learned long ago that Bush doesn’t give his real reasons for doing things. If he says “because it will hurt our economy” he means “because it will cost my friends, and who cares about the rest of you.”]

  3. Joe says:

    Yeah, I didn’t discuss the scenarios because they didn’t impress me.

  4. …time for me to re-read “Afrigadget” again.

  5. Dano says:

    I’ve never been involved – a-n-ywhere – where we ran only two scenarios. I wonder what they left out of the report?

    Best,

    D

  6. John Mashey says:

    Actually, given that he is an OIL COMPANY CEO, this is quite amazing… I’d be ecstatic if other oil company CEOs would say the same thing, i.e., I hope people encourage more forthrightness on the parts of such people, even if they don’t go as far as we might like.

    Of course, I think the followers of Shell have already been exposed to some of this, i.e., back when Lord Ron Oxburgh was parachuted in as Chairman to clean up the earlier mess, and said things like: “I’m really very worried for the planet”.

    http://www.guardian.co.uk/environment/2004/jun/17/scienceinterviews.oilandpetrol

    and later:
    http://www.greenpeace.org.uk/about/greenpeace-business-lecture-series
    In whih he warns about the “angry beast” of climate change.

    Google: ron oxburgh climate change yields many hits

  7. Paul K says:

    Why worry about the oil companies’ problems? The automotive fleet is going electric or other alternative probably more quickly than imagined. Gasoline will be a minor source of power. This story does show the inevitability and the necessity of replacing fossil fuel.

  8. Jim O' says:

    The truth is we’re at peak right now. Global oil production has been flat since 2004. The first step in the oil crisis has already begun to happen: as demand has caught up with supply and price per barrel has soared, the poorer nations have already begun to be priced out of the market. So much better for the wealthier nations as this helps keep price from going even higher and delays the coming oil crisis a bit.

    Joe is right in one way – unchecked Global Warming is ultimately much more dangerous than oil scarcity, but oil scarcity will cause a panic much sooner and much more dramatically than GW.

    We need to begin speaking of both issues together – two catastrophes with one single solution, building a new clean energy economy and doing so with great urgency. Otherwise the result of the oil crisis will be a desperate switch to dirtier fuels exacerbating the climate problem and missing the one opportunity we have to effect sweeping change and progress in carbon emissions.

  9. D says:

    WELL THATS IT….WE’RE SCREWED

  10. Ian says:

    In the 80’s Mazda developed the hydrogen burning rotary engine. IT WORKED. Western world and OPEC crushed the project as they would have lost them revenue. So who raelly is to blame for the oil shortages, Us or the oil producers.