4th Jun 2015 09:13
LONDON (Alliance News) - Royal Dutch Shell PLC Chief Executive Ben van Beurden is set to discuss later Thursday the transition happening within the energy sector and stress that gas has a long-term role to play in the world's energy mix as pressure continues to grow on the evolution of renewable energy.
The CEO, who will speak at the OPEC seminar in Vienna Thursday, is set to discuss technology and the environment and ways the industry can respond to the challenges of an "energy system in transition".
"At Shell, we know that the energy system is transitioning away from a dependence on hydrocarbons, albeit slowly. But we see new means of producing, distributing and consuming energy as opportunities not threats," said van Beurden.
The oil and gas major's CEO said the growing energy demand will come from emerging economies like China and India, citing the International Energy Agency's estimation that energy demand will grow by almost 40% by 2040, which he said will be a "massive challenge" to meet.
However, he also said the need to respond to climate change is also necessary, with the upcoming 2015 Paris Climate Conference making the need to tackle climate change "more intense".
"For the record, Shell supports the signing of a global climate agreement," said van Beurden. "Targets are all very well. What we need is answers. And a key requirement is that governments develop policies which both reduce greenhouse gas emissions and support economic development."
"What the global energy system is experiencing - what it needs to undergo - is a transition from the traditional model based on oil and coal to a progressively cleaner, less carbon-intensive model. And that new configuration needs to be characterised by a greater share of natural gas and renewables - and a key role for carbon capture and storage," he added.
Gas has become a more important segment for Shell, especially since its GBP47 million acquisition of BG Group PLC that marked the biggest UK-to-UK acquisition ever and will give Shell far more exposure to gas in its portfolio, particularly in Brazil. That deal is expected to be completed in early 2016.
Carbon capture and storage also is an area of growing interest to Shell, which is scaling up its technology in the area through projects in the UK, Australia and Canada.
"At Shell, we believe natural gas also has a long-term role as a flexible partner to intermittent energy sources like solar and wind. Meanwhile, carbon capture and storage could revolutionise the way the world produces electricity," said van Beurden.
Van Beurden said no OPEC member can ignore that power is moving to renewables in the long-term and said he believes "public opinion will be unforgiving" in 20 years if they do choose to ignore the trends.
"We need to provide more energy, with far fewer emissions to tackle poverty and climate change at the same time. It'll take time, a great deal of innovation and plenty of courage, but I believe it can be done. Effective carbon pricing is an essential first step, and that's the public position Shell shares with Statoil, BP [PLC], Eni, BG and Total," he said.
Regulated carbon pricing systems could encourage energy efficiency and promote low-carbon technologies, such as encouraging changes to gas from coal, and are "typically flexible, fair and relativity cheap to implement".
"The energy transition is not about one system replacing another. It's about finding a way of integrating the old and new systems. The two evolving alongside each other and complimenting each other," said van Beurden.
On Thursday, a press report from the Wall Street Journal said Shell is discussing the repayment of an outstanding debt of more than USD2 billion with Iran once international sanctions on the country are lifted.
Shell 'A' shares were down 1.5% to 1,909.00 pence per share on Thursday morning whilst Shell 'B' shares were off 1.6% to 1,922.50p.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
BPBG..L