Shell says oil is on its way out.
In a statement on Thursday, the fossil fuel giant said its “oil production peaked in 2019” and that we can now expect it to gradually decline by 1 or 2% annually. Shell also said its total carbon emissions peaked in 2018 at 1.7 gigatons.
The statement is not a total surprise. The oil market has fallen for years, and since the covid-19 pandemic began last year, fuel prices have gone from bad to worse. catastrophically bad. Last fall, the International Energy Agency predicted a “treacherous” path for the industry. And in September, energy giant partner BP dit it is possible that the world has already reached the peak of oil. Shell’s own CFO insinuated in the May announcement, when he told investors the company has experienced “significant destruction of demand that we don’t even know will return,” and shortly thereafter, Shell write $ 22 billion in their balance sheets. But still, this is the first time he’s made such an absolute announcement.
With oil down, Shell announced in September, which would achieve net carbon pollution by 2050, but did not say much in relation to the interim targets. The energy company now says it will build on that plan by launching an “accelerated strategy” to phase out emissions.
But in the typical Shell fashion, the real plan to get there is weak. It includes promises to rapidly increase investment in solar and hydrogen, but also invest money biofuels—That research studies can be just as polluting such as gas and diesel. He said he plans to manufacture biofuels and hydrogen up to 10% of its portfolio by 2030. Even more insulting, the company also plans to greatly increase its production of liquefied natural gas, adding 7 million tonnes of new capacity by the middle of this year. decade. And while the company has said it will plow up to $ 3 billion in “short-term” renewable energy, it still spends tens of billions on oil and gas exploration each year.
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Increasing gross energy production will make it quite difficult to reduce emissions, which is why Shell he said last week which will increase their use of “nature-based” forest offsets and carbon capture and storage. The company is already doing it to produce “Carbon neutral” natural gas. But carbon offsets are not, in a nutshell, real climate solutions. Compensation for greenhouse gas pollution does not prevent emissions from occurring. In addition, compensation projects have also been a source horrible environmental justice as they have often caused displaced people to leave space to plant trees.
Carbon capture technology would, in theory, absorb pollution, but it has not been shown to work on a large scale. Even if he did, he would do nothing to combat the others toxic impacts of to the extraction source, so it is no substitute quick removal of fossil fuels.
There’s another reason for not celebrating the company’s announcement: Shell has also made it clear that as oil production declines, workers will suffer. He has previously said he would include his transition to low-carbon energy 10% dismissal of its staff. But of course, it has not announced any pay cuts for its executives to offset the loss of oil revenues.
Shell’s claim that it has reached the peak of oil is further proof that the market is moving away from fossil fuels. But it also illustrates why we cannot leave the transition to market forces. We need reduce fossil fuel production much faster than the Shell plan allows and immediately put an end to all new oil and gas infrastructure. We must also guarantee workers fired from fossil fuels have good jobs moving forward and with which renewable energies are not built abusive work practices or those who disrupt fragile ecosystems. Judging Shell’s clue register turned on both of us fronts, We i can’t trust you to do the right thing. So while one of the world’s largest oil companies that recognizes the end of oil is a good thing, it still points to the need for governments to play a much more active role in making sure we get to the end of this way in a fair and just way. .