Harold Hamm, the wealthiest energy…
Oil inched up slightly on…
Royal Dutch Shell CEO Ben van Beurden says that whereas the Anglo-Dutch company is aware of the dangers that fossil fuels pose to the environment, it is also realistic and therefore determined to press ahead with plans to drill for energy in the Arctic.
Addressing shareholders at Shell’s annual shareholder meeting in The Hague, Netherlands, on May 20, van Beurden scorned environmentalists’ outcry for individuals and institutions to divest their portfolios of companies that deal in fossil fuels. That won’t be possible until reliable alternatives are readily available, he said.
Related: M&A To Take Front Seat In Oil Industry
“That particular theory also ignores the reality of the industry,” van Beurden said. “As a matter of fact, it risks distracting from the real issues around the energy transition needs.” He said an end to further investment in his industry would lead to a 70 million barrel-a-day fuel shortfall in 25 years.
“We will need sustained and substantial investment to just meet the demand to fuel economic growth, especially, of course, in the developing world,” he added.
Van Beurden also defended Shell’s environmental record, saying it was the first in the energy industry to acknowledge the correlation between climate change and carbon emissions. “We have thought through a fairly pragmatic strategy to position Shell with the long-term energy transition that is currently under way,” he told the shareholders.
As for its plans in the Arctic, van Beurden said, Shell was managing, even micromanaging, its planned drilling procedures “down to the levels that we think are acceptable – and indeed negligible.”
The theme of van Beurden’s speech may have been unexpected, given that he was addressing Shell’s first shareholder meeting since it announced that it planned to buy BG Group, the British energy company, in a $70 billion deal announced six weeks ago that, if completed, would make Shell the world’s largest liquid natural gas (LNG) company.
Related: Latest Pipeline Spill Here Could Galvanize Environmentalist Opposition
But it also followed a protest by self-styled “kayactivists” in Seattle who protested Shell’s intention to begin drilling for oil and gas this summer in the Chukchi Sea off the northwestern coast of Alaska. And it comes ahead of the United Nations’ international Climate Change Conference to be held in Paris from Nov. 30 through Dec. 11.
The Seattle protesters and other environmentalists have argued that high seas and volatile weather are the norm in the Chukchi Sea, and that any rig accidents cause by such buffeting could damage crucial habitat for wildlife and upset the region’s layers of sea ice that help maintain the balance of the world’s temperature.
These activists point to 2012, when Shell conducted similar work in the Arctic but had to abandon the project because of several procedural and safety problems that required two of its drilling rigs to be towed to safety.
Related: Goldman Sachs Predicting $45 Oil By October
Responding to these concerns, van Beurden told the shareholders that any decision by the company to invest heavily in Alaska and the Arctic “is many years, if not a decade, away.”
“We will only proceed with the real development of anything offshore Alaska if again we can find that we can do it responsibly, economically sensibly and commercially sensibly,” he said.
By Andy Tully Of Oilprice.com
More Top Reads From Oilprice.com:
Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com