Is Shell serious about carbon emissions reductions?

Royal Dutch Shell plc, or Shell for short, have issued a statement, under pressure from institutional investors, on how they will contribute to achieving the Paris climate change commitments. They state:

“Shell fully supports the Paris Agreement and believes that society has the scientific and technical knowledge to achieve a world where global warming is limited to well below 2°C.” (Ref. 1)

That sounds pretty unequivocal, and Shell are spending a lot of money aiming to persuade us that they are indeed serious. Let’s take a look at their claims.

Reuters reported in March 2018 that:

“Shell, the world’s top trader of liquefied natural gas, currently produces around 3.7 million barrels of oil equivalent per day, of which roughly half is natural gas.” (Ref. 2)

That’s 1.35 billion barrels per year, of which 50% is natural gas. This equates to about 0.5 billion tonnes of CO2 equivalent per year, or 0.5 GtCO2e/yr  for short, from the end-use emissions from their products (Note 1).

Shell is claiming to take a lead on emissions reductions, but take a look at Shell’s own statement of ‘direct emissions’ (those resulting from operation of their operations):

“The direct greenhouse gas (GHG) emissions from facilities we operate were 73 million tonnes on a CO2-equivalent basis in 2017, … The indirect GHG emissions from the energy we purchased (electricity, heat and steam) were 12 million tonnes on a CO2-equivalent basis in 2017” (Ref. 7)

So Shell are focusing on these production-based emission totalling 85 million tonnes of CO2e in 2017, or 0.085 GtCO2e.  

From the above figures we see that their production related emissions of CO2e are nearly 15% of the net CO2e resulting from production and end-use (see Note 2). By no means a trivial part of their net emissions, but no surprise that their marketing focuses on their production methods not the 85% coming for end-use of their products, that they clearly cannot mitigate, except by not producing them in the first place.

This explains why Shell, in the disclaimer to their statement to institutional investors, state:

“Also, in this statement we may refer to “Net Carbon Footprint” or “NCF, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions. The use of the terminology “Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.” (Ref. 1)

The key words are “Shell only controls its own emissions”, but offers to “support society” in meeting Paris Agreement goals.

Off the agenda of this statement is any suggestion of keeping fossil fuels in the ground or an acknowledgement of the devastating implications of the IPCC’s 1.5C special report.

They plan to boost natural gas extraction, tripling this by 2050 according to the Reuters report. Citing measures such as use of CCS (Carbon Capture and Storage) lead them to state an aspiration to halve the ‘Net Carbon Footprint’ (which includes end-use emissions) by 2050. This may seem to be an ambitious and welcome commitment for a fossil fuel major, but it fails to acknowledge the urgency with which we must decarbonise energy, and relies on the same magical thinking involved in the massive scaling required in CCS technologies by 2050 that many policy-makers are prone to.

This is a self-administered license to carry on extracting and selling fossil fuels.

Shell have been flooding the media with reports of how they are reducing carbon emissions, and they will fund events such as the annual New Scientist Live 2018, where they had a large stand in the middle of the exhibition hall; right next to BP’s stall offering, you guessed it, the same soothing words on emissions reductions. They will be back for more next year (Ref. 8).

If Shell are the trail-blazers amongst the fossil fuel majors, then what to expect from the laggards? 40% reduction by 2050, or 30%, or 20%, or less? What is the ambition of the industry as a whole, which last year was responsible for nearly 37 GtCOoverall (Ref. 5)?

But they, like the other carbon majors and all the minors, are collectively in denial about the challenge we face, and the urgency required to get to net zero emissions by 2050 or earlier, not 50%.

Shell can, as they admit, only seriously impact on the 15% (production emissions), not the 85% (end use emissions), of their fossil fuel cake, when the real issue is that we need a radical shrinking cake, not the growing one we have today.

I regard it as distraction tactics to focus on production emission, trying to deflect the discussion away from the calls to ‘keep it in the ground’.

Unfortunately for Shell and other gas majors, the science is showing we have run out of time.

‘Keep it in the ground, keep it in the ground’, the protestors cried at COP24.

They at least, will not be distracted by the latest greenwash from Shell and the others.

o o O o o

 

(c) Richard W. Erskine, 19th December 2018

Notes

  1. This assumes 0.43 metric tonnes of CO2 per barrel of oil (Ref. 3), and using 75% of this value for natural gas (Ref. 4). The figure of 0.5GtCO2e for Shell aligns with the figure shown in the CDP Carbon Majors Report 2017 (Ref. 6). Note also that 5,800 cubic feet of natural gas is equal (using an energy metric) to a Barrel of Oil Equivalent https://en.wikipedia.org/wiki/Barrel_of_oil_equivalent
  1. Add the 0.5 GtCO2e from the end-use burning of their products and we see that this 0.085 GtCO2e is nearly 15% of the total for which Shell is ultimately responsible for. Note also that CO2e or CO2 equivalent includes the CO2 resulting from combustion as well as any leakages of methane, with the methane contribution converted into the equivalent amount (by its warming potential) of CO2.

References

  1. Joint Statement Between Institutional Investors on behalf of Climate Action 100+ and Royal Dutch Shell plc (Shell), 3rd December 2018
  1. “Shell’s gas production could be triple oil by 2050: CEO”, Ron Bousso, 7th March 2018, Reuters
  1. “Greenhouse Gases Equivalencies Calculator – Calculations and References”, US Environmental Protection Agency, EPA
  1. “Frequently Asked Questions”, US Energy Information Administration, EIA
  1. “Analysis: Global CO2 emissions set to rise 2% in 2017 after three-year ‘plateau’”, Zeke Hausfather, 13th November 2017, CarbonBrief 
  1. The Carbon Majors Database: CDP Carbon Majors Report 2017
  1. Shell Sustainability Reporting and Performance Data / Greenhouse Gase Emissions
  1. New Scientist Live 2019, Exhibitors / Shell

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