Shell to Present New Energy Scenarios to 2050: Scramble and Blueprints
25 January 2008
As part of its on-going methodology of scenario-assisted planning, this year Shell will present two new global scenarios looking out to 2050: Scramble and Blueprints. Shell last issued a set of global scenarios in 2005, looking forward to 2025.
Shell uses scenarios to help review and assess strategy. The scenarios are not forecasts but rather efforts to understand the possible interplay of different types of change. During the 1990’s, as market liberalization accelerated, the Shell global scenarios explored increasing globalization, the onrush of new technology and market liberalization.
The three scenarios issued in 2005 saw continuing globalization in the simplistic sense of the word: continuing economic growth and an increasing movement of people and ideas across the globe. The focal question, which ran throughout all three scenarios, was how the ‘triple dilemma’ posed by trying to achieve efficiency, social justice and security could be resolved in a globalized world.
Shell’s two new global scenarios looking ahead to 2050 are built on what it calls the “predetermined factors of three hard truths about energy”:
There is step change in demand for energy driven by growing population and increasing prosperity.
“Easy”—i.e., easily and relatively cheaply produced conventional—oil and gas will not be able to match this pace of growth. In fact all energy sources together will struggle to match demand, which will have to be met partly by new energy efficiency technology. The world is going to need all the energy it can get.
Shell Chief Executive Jeroen van der Veer has put a date on the peaking of easy oil and gas: “After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand.”
Environmental stresses—both local pollution and climate change—are increasing.
In a speech published on the Shell website, van der Veer provides a little more detail on the two new scenarios, prior to the rollout.
The presumption is that by 2100, the world will have a radically different energy system than today’s, with renewables—solar, wind, hydroelectricity, and biofuels—making up a large share of the mix, along with nuclear.
Humans will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.
The scenarios explore two very different possible ways of getting there.
In the Scramble scenario, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast. Taking the path of least resistance, policymakers pay little attention to curbing energy consumption—until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions. Since these responses are overdue, they are severe and lead to energy price spikes and volatility.
The Blueprints scenario is less painful, even if the start is more disorderly. Numerous coalitions emerge to take on the challenges of economic development, energy security, and environmental pollution through cross-border cooperation. Much innovation occurs at the local level, as major cities develop links with industry to reduce local emissions. National governments introduce efficiency standards, taxes, and other policy instruments to improve the environmental performance of buildings, vehicles, and transport fuels.
Regardless of the route, van der Veer said, “the world’s current predicament limits our room to maneuver...Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.”
Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another. But, faced with the need to manage climate risk for our investors and our descendants, we believe the Blueprints outcomes provide the best balance between economy, energy, and environment. For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced.
But the Blueprints scenario will be realized only if policymakers agree on a global approach to emissions trading and actively promote energy efficiency and new technology in four sectors: heat and power generation, industry, transport, and buildings.
This will require hard work, and time is short. For example, Blueprints assumes CO2 is captured at 90% of all coal- and gas-fired power plants in developed countries by 2050, plus at least 50% of those in non-OECD countries. Today, none capture CO2. Because CO2 capture and storage adds costs and yields no revenues, government support is needed to make it happen quickly on a scale large enough to affect global emissions.
Blueprints will not be easy. But it offers the world the best chance of reaching a sustainable energy future unscathed, so we should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age.
The world faces a long voyage before it reaches a low-carbon energy system. Companies can suggest possible routes to get there, but governments are in the driver’s seat. And governments will determine whether we should prepare for bitter competition or a true team effort.
==nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. The use of local coal and homegrown biofuels increases fast. Taking the path of least resistance, policymakers pay little attention to curbing energy consumption—until supplies run short. Likewise, despite much rhetoric, greenhouse gas emissions are not seriously addressed until major shocks trigger political reactions.==
Sounds rather honest coming from Shell.
Posted by: GreyFlcn | 25 January 2008 at 06:15 PM
"Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.”
Is this necessarily true? I don't think it's inevitable. It all depends on the decisions we make about how to build new energy systems. If policy makers commit to developing wind farms when energy demand increases, and push the development of BEV's and hybrids which charge at night, and if good solar energy systems are developed and implemented, then why would CO2 emmissions necessarily increase?
"The presumption is that by 2100, the world will have a radically different energy system than today’s, with renewables—solar, wind, hydroelectricity, and biofuels—making up a large share of the mix, along with nuclear."
Alas, I think a little too late.
Posted by: MarkMC | 25 January 2008 at 06:18 PM
Did an the oil company just admit peak oil is coming real soon and we have to do something about it?
Posted by: Ben | 25 January 2008 at 06:57 PM
Keep the motivation of this plan in mind. It's about what's best for Shell, not what's best for Humanity. Oil companies have always been about control of the oil market and maximzing profits. They now are about control of the whole energy market. That's why they now call themselves Energy Companies.
The answer to clean abundant energy for the whole world is not nuclear, wind, waves, coal, gas, or oil but devices that absorb solar light and heat energy and turn it into storable forms of energy. These energy devices disturb the environment, including the atmosphere, the least.
See the following: http://www.motherearthnews.com/uploadedFiles/articles/issues/2007-12-01/RenewableEnergy.pdf
Posted by: Lad | 25 January 2008 at 09:10 PM
==Did an the oil company just admit peak oil is coming real soon and we have to do something about it?==
Yeah, but their "solution" is of course tar sands, oil shale, heavy oils, and coal-to-liquids.
With of course a magical dose of "We promise to sequester all the carbon!"
Issue being even if they sequester 90% of the carbon, it's still just as dirty as conventional petroleum.
Posted by: GreyFlcn | 25 January 2008 at 09:15 PM
motherearthnews.com/uploadedFiles/articles/issues/2007-12-01/RenewableEnergy.pdf
Huh, thats a pretty nifty chart.
I have mine, it's a little bit different.
(Largely because it's only on-land resources, and it's KW, not KWh/Year)
greyfalcon.net/greenenergy.png
greyfalcon.net/fossilenergy.png
Posted by: GreyFlcn | 25 January 2008 at 09:21 PM
Wind and wave are renewable energy sources with good prospects for plodding along renewable liquid (bio fuels) and various gas reserves including bio will be a part of the sustainable mix with a place at the table for PV I'm sure.
'Humans will have found ways of dealing with air pollution and greenhouse gas emissions. New technologies will have reduced the amount of energy needed to power buildings and vehicles.'
New ways? yes for thousands of years we (pl) ' ve been finding 'new ways', But 'reduced the amount of energy needed to power buildings and vehicles.'
Thats arguably absurd from the collective historicall perspective. - The one that matters.
Selective? yes but it was asking for that.
I never thought I'd be taking analyses and comment from vested interest terribly seriously but the generous time frames envisioned aside, This is some of the more sensible comment around.
Does this mean I need to read more?.
Posted by: arnold | 25 January 2008 at 10:29 PM
“After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand.”
That is not saying peak oil to me. That is saying the supply of "easily accessible oil" will not keep up with demand. They may continue to produce more oil in 2015 than today, but demand will exceed the amount of easily accessible oil produced on 2015 and the years afterward.
If we want to parse the words, that means to me that oil prices will rise. If you have a demand that exceeds the supply of easily accessible oil, then you have more expensively accessed oil to meet the demand, or you do not meet that demand. Translation...higher prices.
His outlook pretty much says that we can either work together to make it all happen, or we can compete like dogs and do it the hard way.
Posted by: sjc | 25 January 2008 at 10:31 PM
:@GreyFlcn
Thank you for the information; I think both of the sources say petty much the same thing: That the earth has plenty of energy available from the Sun to meet all the demands it will ever need.
But of course, the idea is to develop solar energy into forms that are useful to meet demand. IMO we should not allow the continuing politics of self-interest by fossil fuel energy companies to dampen the development and production of solar devices. In order to override the influence of the powerful fossil fuels industry, our federal government has to take the lead in directing a huge national project to bring this energy into the mass market as soon as possible. The future is Solar Power production and Battery Automobiles. We cannot afford to wait any longer. Let's hope the next President and Congress gets it. We have lost eight years of energy progress under the policies of the present President.
Posted by: Lad | 26 January 2008 at 06:02 AM
Nobody likes to say it, but the energy solutions (applications) will come from China and India. The reason is simple, they don't have enough fossil fuel to raise their per capita energy consumption to the industrial world level. They will have to use other energy sources such as wind, solar, hydro, geothermal, waves, biofuels and lots of Nuclear.
Future energy mix will progressively move away from fossil fuels. For the mid-term, the backbone will be electricity from Nuclear, complemeted by wind, hydro, sun, waves etc.
In the long run, solar energy will play a much greater role. As initial capital cost is reduced from $5/Watt to less than $1/Watt and energy storage units (ESSUs) become much more affordable, home owners will install the own energy supplies required for their residence and vehicles. Power to the grid may flow the other way most of the time.
A new low cost (less than $1/w) very flexible, transparent, high performance PV, can be glued/integrated to most vehicle surfaces, will supply enough power for all accessories; top the on board ESSU when parked in sunny places and keep the vehicle cooler at the same time.
Future vehicles may become mobile power supplies. Excess power could be discharged into the residence or work place energy unit and/or visa versa.
It may be too early to sell your Oil Stocks but the right time to start buying more Electricity- Energy associated Stocks.
Makers of ESSUs, Sun energy capture units, Nuclear power plants, Electric energy intelligent grids, V2G, R2G, V2R, BEVs, will replace todays Oil firms.
Posted by: Harvey D | 26 January 2008 at 08:25 AM
Bill Clinton was saying that his Foundation and the mayor of New York got together with banks and suppliers to put together a solar PV program for the city housing authority. The electric bill was $500 million per year and the solar will bring that down $150 million. The savings from the power will pay for the panels over time and the city gets clean power for its grid. Some people in the city without jobs will be trained to install the panels and learn a skill. This seems like a pretty good deal to me.
Posted by: sjc | 26 January 2008 at 08:34 AM
test
Posted by: MarkMC | 26 January 2008 at 09:00 AM
So what's the deal with solar cells? I have heard that the technology is being withheld thorugh patent manipulation, much like Chevron't patent on the NiMH battery.
I have also heard that their efficieny is only 9%, is this true? Once they become more efficient this opens up a whole new world. The Sahara, Saudi Arabia, and Australia will find themselves in good positions.
But solar cells by definition won't work well over farmland, whereas windmills will.
Posted by: MarkMC | 26 January 2008 at 09:03 AM
Multijuction concentrator cells can be 25-35% efficient, but they cost a lot.
Monocrystaline cells about 15% efficient and multicrystaline cells are maybe 13%. Thin films can range from 5-10%, but the major number is cost per watt. Unless you are cramped for space even a 5% efficient panel at low enough cost can pay for itself in a reasonable time.
Posted by: sjc | 26 January 2008 at 09:33 AM
ET AL:
The company NanoSolar is in production with thin film solar panels and intend to ram up production as they sell more product. Their first year's production of 2 MWs is already sold to a power plant in Germany. Their immediate target is $1/watt. Evidently they can sell all they produce. I would like to see them license the technology to larger companies and let's get serious about solar panel production.
See: http://www.nanosolar.com/
Posted by: Lad | 26 January 2008 at 10:59 AM
ET AL:
Also watch the video at: http://www.kqed.org/quest/television/view/399
Posted by: Lad | 26 January 2008 at 11:11 AM
Good video clip. They imply that the cost of the frame is less, because you can just "roll it out" onto your roof...we will see. However, the Balance of System cost for installation, wiring, inverters and the rest will not come down by a factor of two. If the panels now cost $5 per watt and come down to $2.50 per watt and balance of system remains at $5 per watt, you would have an installed cost of $7.50 per watt instead of $10 per watt. A $10k system would now cost $7500. I am not sure how many home owners are going to come off the sidelines at this new price point. Businesses will, if they were inclined to do so initially anyway and the rebates from governments make it even more attractive.
As for patents, they are like anything else. You might think of a patent as a monopoly license. As such, they may do more to restrict the availability of an innovation to the market more than facilitate it. It does protect the innovator, but can hamper adoption on a wide scale initially. Since Nanosolar looks like a small venture funded operation, their investors may be willing to license at a reasonable fee, rather than put so much more into manufacturing plants.
Posted by: sjc | 26 January 2008 at 01:59 PM
I see that solar energy as the originator of all energy sources except geo thermal becomes available two ways, vis fossil or renewable. The renewables are about a closed loop either through energy transfer to wind, Bio,and other photsynthetic thermal or voltaic.Or tidal(some may call this lunar power)The distintion while clear enough begins to blur when it comes to picking or favouring one form over another., It's like all ice cream different flavours.
Idealy in the interests of the conservation of energy and efficiency and sustainability all forms of renewable should be our collective objective as this is all we can rely on in the long term.
The long term is critical to moving forward and also the hardest for most of us to deal with.
Very few seem to place much faith in this concept and that is a bit of a worry. Certainly short term is a better fit given that economic models favour this and environmental concerns unmet indicate short term and stop gap measures become increasingly necessary.
Another truism: The lack of planning does not constitute an emergency.
Posted by: arnold | 26 January 2008 at 03:08 PM
arnold:
As you so well said, energy comes from the sun. Why not use it as directly as possible with the best current and future converters.
Lower cost mass produced Solar panels are one (very clean) way to do it. Much lower cost energy storage units (ESSUs) have to be developed to make it viable. It will come within the next decade.
Of course, other conversion methods will also be used. Converting sun energy to hydrogen is interesting because hydrogen can be stored and used latter to produce electricity when the sun is not around or to satisfy peak demands.
Using agriculture to convert sun energy to feedstock for biofuel factories produces too much GHG, competes with essential and vital food production and should be restricted and even phased out. We should never have to choose between our Gas guzzler and our stomach, even if it would currently be beneficial for many, i.e. the 30% of us who would benefit with a lot less food.
There will never be a real energy shortage except for short term due to lack of imagination and initiative to harvest it. Our sun will be around for a few more billion years and it can supply us with all the free energy we need.
Posted by: Harvey D | 26 January 2008 at 06:01 PM
With cellulose ethanol, there is no food or fuel decision. There is corn for food and corn stalks for fuel. Since the plant absorbs CO2 during growth, there is no added CO2 either.
Posted by: sjc | 26 January 2008 at 09:25 PM
Cellulosic ethanol is better than corn ethanol, but if you pay farmers enough to grow cellulosic crops, it may still displace a certain amount of food production. Probably a lot less than corn though, because crops like switchgrass can be grown on land not suitable for economical food production.
Posted by: George | 26 January 2008 at 11:02 PM
I heard that we have almost 1 billion farming acres and about 90 million of them are in corn production. Probably not all of those almost 1000 million acres are good enough to grow corn and we would not want to anyway. But maybe 10s of millions of acres are capable of growing fuel crops. Since the price of crops usually drops when a lot of farmers come to market at the same time, this might offset some of that.
Posted by: sjc | 27 January 2008 at 08:07 AM
sjc:
You are both correct and wrong with USA farm land.
In million acres:
1) total land = 2,264
2) farming = 938
3) cropland = 434
4) harvested cl = 302
5) woodland = 76
6) pasture = 395
7) urbanized = 33
8) conservation = 33
As you can see most of the USA land (2,264 million acres) is already used or committed.
Of course, you may cut the remaining (76 million acres) of wood land to produce biofuel.
Or, you may use the conservation areas (33 million acres).
Preferably, you may use part of the underused existing poor farmland areas. (about 132 million acres) to produce cellulosic feedstocks.
The problem is that farmers will used (are actually using) part of the good harvested areas (302 million acres) to produce biofuel feedstocks instead of food. This reduces food availability and puts pressure on food price. Demands vs availability drives the price upward.
Posted by: Harvey D | 27 January 2008 at 08:50 AM
The DOE estimated that there are 1 billion tons of biomass available each year for making fuel and that excludes what is needed to be put back into the land. We may not need biomass crops at all, if we can make 100 billion gallons of liquid fuel from what we have each year.
I would like to see the farmers get some revenue from what they have now. Same fields, same water, same fertilizer but now the stalks that used to be waste are converted to fuel. This might reduce some of the farm subsidies that are now given to farmers to support crop prices.
Posted by: sjc | 27 January 2008 at 10:07 AM
==The DOE estimated that there are 1 billion tons of biomass available each year for making fuel and that excludes what is needed to be put back into the land.==
You might want to take a little bit closer look at the details of that blindly optimistic DOE estimate.
greyfalcon.net/perlack
greyfalcon.net/biolimits.png
It's the same type of optimism they has when we went into Iraq.
Just in general, anything about biofuels that comes from the DOE or USDA, assume it wrong, and then see if you can prove yourself otherwise.
i-r-squared.blogspot.com/2006/03/how-reliable-are-those-usda-ethanol.html
Posted by: GreyFlcn | 27 January 2008 at 01:17 PM