Shell says oil is coming out.
In a statement 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% per year. 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 been in decline during years, and since the covid-19 pandemic started last year, fuel prices went from bad to catastrophically bad. Last fall the International Energy Agency predicted a “treacherous” path for the industry. And in September, the energy giant BP saying the world may already have reached peak oil. Shell’s own CFO implied in the May announcement when it told investors that the company has seen “a lot of destruction in demand that we don’t even know will return,” and soon after, Shell I note $ 22 billion on their balance sheets. But still, this is the first time such a resounding announcement has been made.
With oil in decline, Shell Announced in September that it would achieve net zero carbon pollution by 2050, but didn’t say much about intermediate targets. The power company now says it will build on that plan by launching an “accelerated strategy” to phase out emissions.
But in typical Shell style, the actual plan to get there is flimsy as hell. It includes promises to rapidly increase investment in solar and hydrogen energy, but also to invest money in biofuels—That research shows that they can just as polluting like gas and diesel. It said it plans to produce biofuels and hydrogen up to 10% of its portfolio by 2030. Even more insulting, the company also plans to vastly increase its production of liquefied natural gas, adding 7 million tons of new capacity by the middle of this decade. And while the company has said it will invest up to $ 3 billion in renewables “in the short term,” it still spends tens of billions on oil and gas exploration each year.
Increasing the production of dirty energy will make it quite difficult to reduce emissions, which is why Shell said last week which will drive the use of “nature-based” forest offsets and carbon capture and storage. The company already does that to produce “Carbon neutral” natural gas. But carbon offsets, simply put, are not real climate solutions. In reality, offsetting greenhouse gas pollution does not prevent emissions from occurring. In addition, offset projects have also been a source of horrible environmental justice as they have often resulted in the displacement of people from their homes to make room for planting trees.
In theory, carbon capture technology would absorb pollution, but it has not been shown to work on a large scale. Even if I did, I would do nothing to combat the other toxic impacts in the extraction source, so it does not replace fading fast of fossil fuels.
There’s another reason not to celebrate the company’s announcement: Shell also made clear that as its oil production declines, workers will suffer. You have previously said that your transition to low carbon energy would include dismissal 10% of your template. However, of course, it has not announced pay cuts for its executives to make up for the loss of oil revenue.
Shell’s claim that it has reached peak oil is further proof that the market is turning away from fossil fuels. But it also illustrates why we cannot leave the transition to market forces. We need to reduce fossil fuel production much faster than Shell’s plan allows, and an immediate end to all new oil and gas infrastructure. We also need to make sure fossil fuel workers laid off have good future jobs, and that renewable energy is not built with abusive labor practices or those who disrupt fragile ecosystems. Judging by Shell clue record in both of them fronts, We I can’t trust him to do the right thing. So while one of the world’s largest oil companies acknowledges that the end of oil is a good thing, it still points to the need for governments to take a much more active role in making sure they get to the end of that road in a way. fair.