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Page added on February 12, 2021

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For energy giant Shell, the era of peak oil has already arrived


Royal Dutch Shell Plc said its carbon emissions and oil production have peaked and will decline in the coming years as the company laid out a detailed plan for its transition to cleaner energy.

In a sign of how much the petroleum industry has shifted away from its mantra of growth and exploration, Shell said its oil production will fall by 1% to 2% a year. Assuming an annual reduction on the upper end of that range, the oil majors production would fall by 18% by the end of the decade. Output of “traditional fuels” will be 55% lower by 2030.

In a wide-ranging strategy update published on Thursday, the Anglo-Dutch company set new targets for electric-car charging, carbon capture and storage, and electricity sales. It also sought to reassure investors that it could maintain returns through the energy transition, reiterating its pledge for an annual dividend increase of about 4% and the resumption of share buybacks once its net-debt target has been achieved.

“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” Shell Chief Executive Officer Ben van Beurden said in a statement.

Shell’s measured approach to the energy transition stands apart from its peers BP Plc and Total SE, which have announced large deals to rapidly boost its clean-energy capacity. BP has promised to slash its oil production by 40% and ramp up low-carbon spending to $5 billion annually by the end of the decade, prompting some to say the firm is overpaying for renewables. Meanwhile, Shell’s investments in the space will remain at $2 billion to $3 billion a year.

“Shell has set off on a different path” than other European majors, Adam Matthews, director of ethics and engagement for the Church of England Pensions Board said in a statement. “Different companies have different strategies and we now need to test the veracity of these.”

Shell said its net carbon intensity will fall by 6% to 8% in 2023, compared with 2016. That reduction will widen to 20% in 2030, 45% in 2035 and 100% by 2050.

Power Sales

Power will remain central to Shell’s future business, targeting 560 terawatt hours a year of electricity sales by the end of the decade. That’s double what it sells today. It’s also aiming for a rapid expansion in electrical vehicle charge points to half a million points by 2025, from 60,000 today. Shell recently bought the U.K.’s largest public EV charging network and has previously stated an ambition of becoming the world’s biggest power company.

Later this year at the firm’s annual general meeting, it will submit an energy transition plan for an advisory vote to the shareholder.

“This new plan is somewhat nuanced, and offers no real change to the near-term financial metrics; rather the emphasis is put on the pathway to lower (unit) carbon emissions, Alastair Syme, analyst at Citigroup said in a note Thursday. “We doubt whether this framework is incrementally enough to change the market view.”\


5 Comments on "For energy giant Shell, the era of peak oil has already arrived"

  1. HowIsSpyingOnMeWorkingForYounow on Fri, 12th Feb 2021 6:28 pm 

    outcasphilospher : BNY Mellon is buying Bitcoin….LOL


    Even the big banks don’t want the US dollars, it says a lot

  2. Biden's hairplug on Sat, 13th Feb 2021 2:09 am 

    Shell could very well become a legacy energy company and has-been, if they don’t rapidly change course. Their announced “accelerated strategy” is still way too conservative and has an old-school oilman aura. They want to concentrate on onshore gas stations, which is OK, but they should also jump on offshore wind and hydrogen and other means of storage. Shell must become an all-round energy production and storage company. They have the deep pockets to buy themselves into these new markets and as such enforce a New Energy Century for Shell.

    And of course, they should move their HQ away from London, back to the Netherlands, now that the UK has embarked on a path of economic suicide that is Brexit, thanks to the funny little chap with the red bus:

    Shell should follow the example of the exodus of financial firms, who just made Amsterdam the largest trading platform in Europe. The Dutch Golden Age is!

    Amsterdam Stock Exchange in 1602, the first in the world:

  3. Cloggie on Sat, 13th Feb 2021 3:31 am 

    Rystad Energy of Norway warns against a global shortage of offshore wind installation vessels by 2025, to meet booming demand:

    Currently, Europe has 61%, China the remaining 39% of installation vessels. The rest of the world has none. America has missed the boat, if you will, and prefers investing in a useless navy (40% defense budget), that can be neutralized by a Eurasian arsenal of hypersonic missiles, at a fraction of the cost.

    Nevertheless, the Global Wind Energy Council (GWEC) predicts that not all is bad news for the US, as they can “use” European vessels instead (at a friendly fee, of course).

  4. Cloggie on Sat, 13th Feb 2021 3:33 am 

    Shell, take note!

    “Exponential growth predicted for green hydrogen market”

    I think that growth of green hydrogen production will be MUCH, MUCH MORE than 57% between 2021-2030.

  5. andrew wilson on Sun, 14th Feb 2021 8:06 pm 

    What the Shell are you talking about.
    Oh yes, Shell has hit peak oil. How long before bp, total, eni, chevron will join.
    How about exxon the king of oil.

    With the battery prices already at $137 / KWh and is expected to hit $100 / KWh by end of 2022, it could be peak oil demand in 2023.

    The carcass of oil could be shared by vehicles running on electricity, natgas, bio-fuels.

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