Oil’s Futures…And Beyond (Part II)

How will the world's energy mix change over the next several decades?

June 10, 2008

How will the world's energy mix change over the next several decades?

How important are biofuels?

"Our aim is make transport fuels out of next-generation bio-fuels — that is, the sustainable, non-food variety. To that end, we are on the move all the time by collaborating with small companies and by doing our own research."

Do they have potential to be an important part of the world's energy mix?

"I think that the way that we look at next-generation biofuels is that you have to look at an integrated way: How sustainable are the biofuels? What is the CO2 footprint? Will you eat up your own biofuels? That is very much part of our thinking."

Do biofuels have a future?

"Yes. In the end, the aim is to make sustainably sourced next-generation biofuels that don't compete with foods, and are more CO2 efficient "from well to wheels" than products based on fossil fuels. And they certainly will be a lot better than transport fuels based on coal."

How is Shell attempting to create a market for biofuels?

"The thing you have to do, is to go through the learning curves as fast as you can. That has to do with reserves, demonstrations, projects and brains."

Where does the investment come in?

"Only if you have a value proposition for the consumers which is attractive, then you can invest a lot. And that we have already learned from hard lessons in developing renewables. We have been too early in technologies that people didn't like to buy. But, we are very committed to developing renewables and to making them cheaper."

How does nuclear energy fit into the mix?

"Nuclear energy is very important. However, over the next 20 years, there is such a decommissioning program under way that you have to have massive construction just to hold it steady — and then you have to build on top of that."

Why is that such a challenge?

"You essentially have to recreate three industries — construction, uranium mining and waste management — that have effectively been depleted over the last 20 years. So it takes time to rebuild the industry, and then have the scope that grows. We see it growing, but we don't see it able to be the silver bullet."

What does the future hold for hydrogen?

"I worked in the United States in the 1990s and I picked up this idea here — I was quite enthusiastic about it. We are still enthusiastic, but it will be less and later. Everybody in the field still has to work out a lot of problems. While it is still a quite exciting fuel, you have to still figure out from what you can make the hydrogen. So, we think that there is a future — and it may compete with all kinds of alternative forms of transport, but it will not be there tomorrow."

And finally, what will it take for renewable energy to go mainstream?

"Once the footprint of those renewables is really environmentally ok, and the technologies can compete on price without subsidies, then we are convinced you can attract capital — that is nothing new. That is what we see in those start-up companies with the new technologies."

Takeaways

"We have already learned from hard lessons in developing renewables — but we are very committed to developing renewables and to making them cheaper."

"How sustainable are the biofuels? What is the CO2 footprint? Will you eat up your own biofuels? That is very much part of our thinking."