Global warming and Shell’s part in the subject
Shell put green energy on the back burner for years. Now, it returns into the market.
The end of the fossil era is in sight and that puts some pressure on oil and gas companies to think about a future without oil and/or gas. This also applies to Shell, which is in the oil production since the 19th century.
More and more investors are worrying about the consequences of the climate change for Shell. A worldwide climate treaty is been concluded in Paris. The aim of the treaty is to limit the global warming with two degrees. This means that Shell can and may produce less gas and oil in the long run. But what is Shell doing to prevent the global warming? And are the investments they’re doing as good as they tell us?
Research has shown that Shell is investing in projects which are unnecessary when it comes to achieve the climate objectives (Mark Campanale). Shell planned unnecessary projects for at least 7 billion dollars. Within the entire branch, 1 trillion dollars is being thrown away to projects that don’t fit within the climate objectives. We think it’s bizarre that so much money is being wasted by Shell. In our opinion, Shell should put the money in the economy for more useful projects like wind energy and energy savings.
Of the 30 billion dollars of investments, Shell is putting just a quarter into the search for alternative, sustainable energy sources. However, Ben van Beurden (CEO Shell) claims that the demand for oil and gas should decrease before he can make a large turnaround. Van Beurden says that it’s not possible to reshape the entire energy system on his own.
In our opinion it is a matter of supply and demand, which determines the price setting. Think about the hybrid or electric cars: the demand is still low, which means that the prices are high. We think the demand will increase as soon as the prices are getting lower. At this point, the demand for petrol is high because a gasoline car is cheaper than a hybrid/electric car and the petrol prices are bearable.
By the way, in former times Shell was the one who bought all the patents for electric or hybrid cars to prevent their demand to petrol would decrease and they would make less money.
To prevent the global warming, we can try to make sure a part of our fossil fuels is not being burned, so we don’t cause a formation of CO2 emissions. Every day we emit huge amounts of CO2 by travelling, living and working. This CO2 emission is harmful for our environment. To control the damage we can start using ‘green energy’. Shell should cooperate by investing in windfarms and investing in other alternative, sustainable sources of energy and they should limit the production of oil and gas. But to be honest, the society has her responsibility as well. When Shell for example should make alternative sources of energy more accessible and the classic oil and gas less accessible, the society will make the turnaround.
So in our opinion, Shell should produce less oil and gas and should be investing more in green energy. They can be profitable as well with green energy and this would help to limit the global warming. When such a big player on the market continues with offering the society the bad choice (gas and oil) and even obstruct the better choice, the global warming will increase and that is bad for all of us.
What’s your opinion about this subject? Do you think Shell should take more responsibility? Or should they continue being profitable in the classic way and serve their shareholders?
Let us know in a comment below!