Shell says oil is coming out.
In a statement on Thursday, the fossil fuel giant said its “oil production peaked in 2019” and that we can now expect it to decline gradually at 1 or 2% per year. Shell also said that total CO2 emissions peaked at 1.7 gigatons in 2018.
The statement does not come as a total surprise. The oil market is in decline for years, and since the Covid-19 pandemic started last year, fuel prices have gone from bad to catastrophically bad. Last fall, the International Energy Agency predicted a “treacherous” path for the industry. And in September, fellow energy giant BP said the world may have already reached peak oil. Shell’s own CFO hinted at the announcement in May when she told investors the company has faced “major destruction of demand that we don’t even know will come back,” and shortly thereafter wrote down $ 22 billion on its balance sheet. Still, this is the first time it has made such an outright announcement.
Now that the oil is deteriorating, Shell announced in September that it would achieve net zero carbon pollution by 2050, but not much on the interim targets. The energy company now says it will build on that plan by launching an “accelerated strategy” to phase out emissions.
But in typical Shell fashionthe actual plan to get there is as weak as hell. It includes promises to rapidly increase investments in solar and hydrogen power, as well as to put money into it biofuels– what research shows it may be just as polluting as gas and diesel. It said it plans to make up to 10% of its portfolio from biofuels and hydrogen by 2030. Even more insultingly, the company also plans to significantly increase its production of liquefied natural gas, adding 7 million tons of new capacity by mid-week. this decade. And while the company has said it will plow up to $ 3 billion in renewables “ in the short term, ” it still spends tens of billions on oil and gas exploration annually.
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By ramping up the production of dirty energy, it becomes quite difficult to reduce emissions, which is why Shell is said last week that it will encourage the use of “nature-based” forest offsets and the capture and storage of carbon emissions. The company is already doing that to produce “Carbon neutral” natural gas. But carbon offsets are, simply put, not real climate solutions. Compensating for greenhouse gas pollution does not prevent emissions from occurring. In addition, compensation projects have also been a source of this horrific environmental justice because they have often resulted in people being driven from their homes to make room to plant trees.
Carbon capture technology would theoretically suck up pollution, but it has not been proven to work at scale. Even if it did, it wouldn’t do anything to fix the Others toxic effects from the source of extraction, so it is not a substitute for it taper off quickly of fossil fuels.
There’s another reason not to celebrate the company’s announcement: Shell has also made it clear that if oil production declines, workers will suffer. It has previously said that the transition to low-carbon would involve energy 10% firing of its workforce. Still, of course, it has not announced any pay cuts for its executives to make up for lost oil revenues.
Shell’s claim to have reached peak oil is further evidence that the market is moving away from fossil fuels. But it also illustrates why we cannot leave the transition to the market. We have to reduce fossil fuel production much faster than Shell’s plan allows, and to immediately end all new oil and gas infrastructure. We must also take care of it fired workers on fossil fuels have good jobs to move forward, and renewable energy is not used to build abuse of working conditions or those who disrupt vulnerable ecosystems. Judging by Shell’s track Listing On both fronts, we cannot rely on it to do the right thing. So while one of the world’s largest oil companies recognizes that the end of oil is a good thing, it still points to the need for governments to play a much more active role in ensuring that we end that road in a fair and righteous way. .