Shell oil boss misleading on climate change

This video says about itself:

Confidential Shell Oil Report Prompts Lawsuit: They Knew About Climate Change Decades Ago

5 April 2018

What Royal Dutch Shell knew about fossil fuel driving climate change and when they knew it is confirmed in a confidential report published by a Dutch source, prompting legal case against oil giant by environmental group Friends of the Earth.

In May 2018, Dutch Internet site De Correspondent published an article by Jelmer Mommers.

It was about lies by Shell corporation. This time not Shell lies to children; but Shell lies to adults.

Translated from Mommers’s article:

Nine incorrect statements in 33 minutes: this is how Shell CEO Ben van Beurden influences the public debate

In a recent podcast about Shell’s climate policy, CEO Ben van Beurden makes dozens of claims that are debatable, incomplete or incorrect.

Apparently, Mr van Beurden is on his way to equal another rich man with financial interests in the oil industry; United States President Donald Trump. Trump, according to the Washington Post, has lied 3,001 times in his first year as president.

A literal analysis of the interview shows how one of the most powerful industrialists runs away from his responsibility.

According to Ben van Beurden, the boss of the seventh oil company in the world and the largest company in the Netherlands: ‘We can ultimately not do without fossil fuels in large segments of the economy’. In the meantime, he knows ‘not one company, except ours’ that invests USD 1 to 2 billion per year in renewable energy.’

Both statements are incorrect. Nevertheless, the Shell boss stated them in mid-April in an interview for the podcast Studio Energie by energy expert Remco de Boer.

It is a good interview, with sharp questions by the interviewer, but Van Beurden’s answers are often debatable, incomplete or incorrect. That is why we publish the complete transcript with context and analysis of its statements.

I base my comment on journalistic research that I have done since February 2016 about Shell. For example, I had many conversations with Shell employees and wrote about the history of the company.

When I read the transcript, I also have constant criticism – it scared me a bit afraid how often.

1. At 2:29 into the interview Van Beurden thought that Friends of the Earth in the Netherlands had sued Shell ‘from a feeling of social powerlessness, maybe’.

Comment by Mommers:

You can also consider the lawsuits as a consequence of increasing social self-assurance towards corporations like Shell, rather than as an expression of powerlessness. In 1998 Shell already foresaw that the oil and gas industry could be indicted about climate change in the future.

Van Beurden is ‘disappointed’ about being sued about climate change.

Comment by Mommers:

Calculations by American researchers show that about 1.8 percent of all the greenhouse gases that went up in the air since the [18th century] industrial revolution comes from Shell [founded in 1907] products. There are only six companies worldwide that have caused more emissions.

Friends of the Earth in the Netherlands – and a city like New York – have therefore not just randomly opted to sue Shell, they believe that the corporation takes insufficient responsibility as part of the oil industry.

2. Mommers says Van Beurden uses straw man arguments.

At 5:15 into the interview, Van Beurden claims:

But the idea that we can now solve the problem very quickly without oil and gas – “take away the supply and then the demand automatically disappears” – I think is an extremely simplistic representation of things.

Mommers comments:

This is misleading. Shell’s lobbyists also interfere with making regulations and how markets are organized, and Shell advertises for fossil fuels. The company knows that the construction of new fossil infrastructure, such as pipelines and gas-fired power stations, can increase demand.

3. Shell supposedly agrees with the Paris climate agreement.

Interviewer: ‘But you, Shell, endorse the climate agreement of Paris’ (05:43)

Van Beurden: “Yes, absolutely.” (05:45)

Interviewer: ‘You published the Sky scenario. In the recent Sky scenario Shell claims: net zero in 2070 can be reconciled with ‘Paris’, you also published a report on the transition, how you will do it as Shell. You say that in 2070 we can reach ‘just zero emissions’. Paris asks for [‘just zero’ in] 2050 and I understand that the IPCC is working on a report in which they will probably say this year: “2040 maybe”.

Then you do not meet the criteria of the climate agreement of Paris? “(06:10)

Van Beurden replies, saying that his 2070 does agree with ‘Paris’. That 2070 is according to him realistic, and 2050 not, is, according to Van Beurden, caused by governments, not by Shell.

Mommers comments:

Shell has always exercised a great deal of influence on government policy.

For example, in the 1990s the corporation argued against all climate measures, except for energy saving.

From October 2011 on for three years Shell was one of the most important voices in the Brussels lobby against mandatory targets for sustainable energy and energy saving.

4. Shell and renewable energy.

At 9:22, Van Beurden says:

Firstly, I think, there are not many companies that invest 1 to 2 billion in renewable energy, I do not know one, except ours, that is my point 1.

Mommers comments:

This sentence contains three incorrect statements. Not all investments in the [Shell] New Energies division are investments in ‘renewable energy’ [part of it is natural gas].

The New Energies division started in 2016 with an annual budget of 200 million dollars. In November 2017 it was announced that this budget would go up to 1 to 2 billion dollars annually until 2020, but in 2017 New Energies is estimated to have spent no more than about 450 million dollars.

The French oil company Total spent $ 1.38 billion in 2011 to buy into the SunPower Corporation. In 2016 Total spent another 1.1 billion dollar to the acquisition of battery maker Saft.

5. Shell and green energy in history.

Van Beurden says about earlier Shell investments in green energy: ‘solar … turned out to be a business where one cannot make much money’.

My comment: I would call that statement relatively honest about how Shell rates profit far above the survival of life on planet Earth.

Mommers comments:

Shell was in the nineties in the perfect position to become a leader in solar energy, writes former employee Damian Miller in this paper.

But the company was too risk-averse to continue.

It had raised high expectations with rousing PR campaigns.

Van Beurden blames the shareholders of Shell for the slow progress in clean energy.

Mommers comments:

This is a one-sided view of the shareholders. There are more and more large asset managers who ask Shell to do more. Eg, big insurance company Aegon – one of the largest asset managers in the Netherlands – supports the climate resolution of ‘green’ investor collective Follow This.

Even the big Dutch pension fund ABP, which so far has never supported the climate resolution of Follow This, has repeatedly criticized Shell when the company went to the Arctic to look for oil.

6. At 12:45 in the interview is the issue ‘profits above everything’.

Van Beurden claims that without profits, there is no environmental or social sustainability. And clean energy supposedly is ‘not economically sustainable’.

Mommers comments:

Several developers of solar energy – and even a company with which Shell cooperates – claim that they are already making a profit.

Installers of solar panels in the US are also starting to make a profit.

And Shell has been investing in solar parks in the United Kingdom since this year, in The Netherlands and the USA.

So the question is not whether profit can be made with sustainable energy, but how much.

Shell seeks high returns to pay off debts and to maintain high profit distributions to shareholders.

But according to some analysts, central bankers and investors, Shell risks losing value by sticking to fossil energy for too long.

Coal, oil and gas companies are no longer a safe investment, says this analyst.

Over the past year and a half, companies that have been at the forefront of sustainability … have performed better at the stock market than companies in the fossil fuel sector (such as Shell).

7. Shell’s climate history.

Interviewer: ‘I want to talk to you about the film that Shell released in 1991: Climate of Concern.

Have you ever seen it again recently? “(13:54)

Van Beurden: “I have seen the first half of it and I can not remember seeing it at the time, but I know what you are talking about.” (14:01)

Interviewer: ‘It’s nice that you say the first half, because exactly that first half could have been made by Greenpeace or Friends of the Earth today. Last night I watched the extraordinary first quarter of that film: 1.5 to 4 degrees temperature rise in 2050, and these are all predictions, and the voice over says nicely: “Scientists think and expect”. There are climate refugees, you call them greenhouse refugees, tropical islands disappear, wetlands are destroyed, floods, impact on agriculture. – I became very depressed. Again, that film was released by Shell in 1991. …

Then the accusation against Shell now is: “Yes, you have made a beautiful film, you have warned.” #ShellKnew
#ShellKnew on Twitter, is the hashtag on social media, Shell knew, even more, you published it, but you did not do much about it. Or actually nothing.”(14:59)

Van Beurden: ‘Remco, then you come back to the first question, who has responsibility over what? I think indeed, we knew this and we never hid it.’

Mommers comments:

The latter is not entirely true. Although Shell has acknowledged since 1998 that climate change exists and that this is due to greenhouse gases, the company has long been a member of lobby groups that have spread doubt and disinformation.

Internally, Shell drew far-reaching conclusions in 1988 about the seriousness of climate change.

Today Shell is still a member of the National Association of Manufacturers (NAM) and of the Western States Petroleum Association (WSPA), two industry associations that disseminate disinformation about climate change.

Van Beurden denies that Shell basically did not do anything about the climate change wich they knew about.

Mommers comments:

This is misleading. Thirty years before the climate was firmly on the global public agenda, oil companies began to think about its implications.

Shell advocates only policies that leave the business model unchanged.

Van Beurden is criticized here by former [British government] climate envoy John Ashton: increasing the CO2 price (the price of its emission rights) only causes marginal change.

Other policy measures that politicians have wanted to take in recent decades, such as mandatory energy savings in industry, were thwarted by Shell itself or by industry associations that Shell was or is part of. This while research shows that even with a high CO2 price additional policy is needed to make the energy supply more sustainable.

8. Shell should have been louder about climate change.

Van Beurden: ‘And here you can say: maybe we should have talked harder? Should we have made it a bigger issue? Frankly, if we look back on it, we might have been more assertive, because ultimately the problem is that the problem is blamed on us, while ultimately it is of course a much broader social problem.”(16:33)

Mommers: That ‘the problem is laid at Shell’s door’ is incorrect. In the Netherlands, the cost of climate measures is in any case mainly imposed on the taxpayer – and especially on the lowest incomes.

In other countries, too, the fossil fuel industry is usually spared by policymakers.

Van Beurden: ‘No, but I also think that, for that matter, we can be much more assertive in our advocacy, that we have to be louder and clearer. Without us now setting ourselves up as a protest group against the government, I think we should be allowed to press harder.’

Mommers: This is misleading. Shell is intimately entwined with many governments, like Nigeria and the Netherlands.

While Shell publicly calls for sensible climate policy, it uses this proximity for the protection of its existing interests, for the construction of new gas infrastructure.

Shell also lobbies in Europe for new gas infrastructure, while there is already more than enough capacity to meet the demand;
and for government policy that stimulates the use of (liquid) natural gas.

9. How influential is Shell?

Van Beurden: ‘I think we should show and clarify more. And if you do that, then we are also ready to invest in it. But do not expect us to invest in investments that do not contribute, that are not profitable, that ultimately deprive value from the company. I do not think that is realistic to expect that from any company and certainly not from a company that ultimately does not have the strength and size to do something about it at the social level.”(19:08)

Mommers: You can also look at it differently. If, from the end of the eighties, when the internal alarm about the risks of climate change sounded, then had consistently acted upon that alarm, then it would now have been a more sustainable business. The Dutch energy economy might also have looked different, just like that of other countries where Shell is active. …

Interviewer: ‘You have received Borssele III / IV wind farm. Shell won the tender for the construction of the wind farm together with Eneco and other partners at the end of 2016, because there is a good government subsidy on it, it is a good business case for you.”(20:49)

Van Beurden: ‘Yes, and we have priced that very competitively . But in the end we can not do otherwise. “(20:55)

Context, by Mommers: In January 2018 Shell reduced its interest in this wind farm from 40 to 20 percent to reduce its ‘financial exposure to the project’. The proceeds from the sale of the interest are said to be invested ‘in projects that yield a higher return’.

10. Can we do without fossil energy?

Van Beurden: ‘And eventually we will not be able to do so in many large segments of the economy, we will not be able to do without fossil fuels. We can not fly on electricity, we can not sail on electricity, we can not make materials from electricity. So eventually somehow carbon will be needed. Let it be the best form of carbon.”(25:00)

Here Van Beurden makes four incorrect statements. Shell has participated in research that shows that many industries can do without fossil fuels. Shell contributed to this exploration of a clean energy-intensive industry in the Netherlands.

There are already small electric aircraft. See for example the ‘Sunflyer’.

In the USA, a small electric hearing instrument was certified last week For example, the development of lithium-air batteries could make electric aircraft suitable for long-haul passenger flights in the future.

Electric cargo ships are on the rise for inland navigation: the Netherlands, China and Norway are working on it. Combinations of batteries, sailing and hydrogen should in theory allow clean ocean shipping.

The ‘materials’ meant by Van Beurden are plastics and all kinds of consumer goods, from rubber bands to sunscreen, which are made on the basis of petroleum products. Sustainable alternatives are also emerging there, in the ‘biobased economy’. In combination with smarter design, this could lead to a ‘circular economy’.

These developments are only at the beginning and we can not do without oil for now, but in a few decades we can – and must – be radically different.

11. Shell and society

Interviewer: ‘[Shell is perceived as] not a force for good, but as a force for evil.’ (29:24)

Van Beurden: ‘Yes, it is more and more Shell against society and of course I am very annoyed about it, because that is not how I identify myself. I also do not think anyone at Shell identifies that way and that is a problem. Because in the end we are made up of people, we have ten thousand people who work for us in the Netherlands. I think that nobody of them recognizes the way we are characterized from time to time.”

Mommers: This is debatable. A series of conversations which I published at De Correspondent showed that Shell employees sometimes are moved by criticism from society and sometimes agree with it. For example, an employee left Shell because he had lost trust in the company.

Shell is an increasingly less attractive employer for students from Delft technical university. ‘Many technicians from Delft do not want to identify themselves with this type of companies anymore’, says a headhunter in the Financieele Dagblad.

No, thank you, says technical talent to a career at Shell, the Financieele Dagblad wrote in early May. “You do not contribute to a better, more sustainable world.”

See also here.

Shell manager Kleiburg resigned because of anti-environment policies: here.

POPE FRANCIS warned global oil executives at the weekend that human-caused climate change “is a challenge of epochal proportions,” pointing out that satisfying the world’s energy needs “must not destroy civilisation.” The Pope held a two-day conference with oil chiefs as a follow-up to his encyclical three years ago that called on people to save the planet from climate change, which the world’s oil companies have played a major role in causing: here.

Shell Took 16 Years to Warn Shareholders of Climate Risks, Despite Knowing in Private All Along: here.

A collective-risk dilemma experiment with members of the public in Barcelona has shown that people are more or less likely to contribute money to fighting climate change depending on their how wealthy they are. And the results indicate that participants with fewer resources were prepared to contribute significantly more to the public good than wealthier people, sometimes up to twice as much: here.

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