Shell and "The Economics Of Energy"  

Posted by Big Gav in , ,

Chris Vernon at TOD Europe has an interesting catch - Jeremy Leggett of SolarCentury featuring in some high profile magazine ads talking about peak oil and the need to switch to renewables - with the ads apparently sponsored by Shell.

Click on the image to the right to download the .pdf of a full page "advert" which appeared in both Time and Fortune magazines over Easter. It was written by Jeremy Leggett, the prominent peak oil and climate change commentator and proponent of renewable energy (also Chairman of Solarcentury).

On peak oil Jeremy doesn't pull any punches:
The bad news is that no combination of technologies can plug the energy gap if the peakists are correct. There will be a third, and last, global energy crisis. It will dwarf previous crises. Profound economic dislocation will result. The challenge for human civilization will be how we rebuild post-peak.

The interesting point here is that that Shell sponsored the thing.

So, what's in it for Shell?

Commenter Robert Marston thinks:
Reasons why this does not surprise me:

1. Peak Oil, true or no, creates the perception of scarcity which helps increase prices. Matthew Simmons -- "Oil is too cheap at 15 cents per cup." This has got to be music to oil execs ears.

2. Peak Oil theory focuses on scarcity which implies we need more. It makes a nice counterpoint to environmentalism which denies the need for oil and pushes instead for alternatives.

3. Shell is positioned very aggressively in the possible solutions to Peak Oil -- synthetic oil and oil shales.

4. Many Peak Oil proponents do not recognize the validity of alternative forms of energy and spread disinformation that negatively skews EROI estimates for all alternative sources.

5. Peak Oil focuses on the economic benefits of oil and shifts focus away from the environmental impacts of oil.

If they succeed in controlling the Peak Oil debate in their favor, it's a win, win, win for the oil industry. That said, Peak Oil is a two edged sword and the same arguments highlighting depletion can be used to attempt to validate new energy sources. So the industry needs to have a hand in the Peak Oil game so that the issues come out in their favor.

While I've got a lot of sympathy for this interpetation, it would make more sense if Jeremy Leggett wasn't the face of the campaign and wasn't talking about the need to switch to renewable energy.

Shell seems to be the weakest of the majors when it comes to conventional oil, and they've always been the pioneer in scenario based planning for what lies ahead for the energy industry. Their latest set of scenarios (Blueprints Or The Scramble) did talk about - and recommend - the need to transition to a sustainable energy future, so maybe they are starting to lean much more towards a gas + sequestration and renewables option than trying to scale up the tar sands (which is a fairly risky approach if a Kyoto successor with teeth emerges).

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