Shell Unveils Proposal To Tackle Climate Change

Plans To Meet Goals Of Paris Climate Agreement

By Christopher Mooney and Steven Mufson, Washington Post

Royal Dutch Shell just outlined a scenario in which, by 2070, we would be using far less of the company’s own product — oil — as cars become electric, a massive carbon storage industry develops, and transportation begins a shift toward a reliance on hydrogen as an energy carrier.

The company’s Sky scenario was designed to imagine a world that complies with the goals of the Paris climate agreement, managing to hold the planet’s warming to “well below” a rise of 2 degrees Celsius, or 3.6 degrees Fahrenheit, above pre-industrial levels. Shell has said that it supports the Paris agreement.

The scenario, which finds the world in a net-zero emissions state by 2070, is based on the idea that “a simple extension of current efforts, whether efficiency mandates, modest carbon taxes, or renewable energy supports, is insufficient for the scale of change required,” the oil company document reads.

“The relevant transformations in the energy and natural systems require concurrent climate policy action and the deployment of disruptive new technologies at mass scale within government policy environments that strongly incentivize investment and innovation.”

The company also cautioned that Sky is only a scenario — a possible future dependent on many assumptions — not a reality that will definitely be realized.

reforestation and carbon capture

Shell is one of the globe’s largest publicly traded oil companies and produced 3.7 million barrels of oil equivalent per day last year. But the company’s own recent investments reflect a slight change in focus or, at least, a hedging of its bets. In October, it purchased NewMotion, an electric-vehicle charging company. Shell now operates a small number of stations providing hydrogen fuel to vehicles in the United States and Europe, and is involved in pursuing carbon capture and storage technologies through its Quest project in the Canadian oil sands and the enormous Gorgon project in Australia.

The company has also acquired BG Group, a major natural gas company, as part of placing greater emphasis on producing natural gas, which releases fewer greenhouse gases during combustion than oil or coal. The company is being pressured by some shareholders to do more on climate change, though some investors support the current state of the company.

“Anytime we see a forecast looking out many decades, it can be an interesting talking point but does not seriously influence investor decisions,” said Pavel Molchanov, energy analyst at the investment firm Raymond James, said in an email. “Even for long-term-oriented investors, that is simply too distant a time frame.”

Royal Dutch Shell chief executive Ben van Beurden in past interviews with The Washington Post has acknowledged that “climate change is real” and that “action is needed” but has asserted that the world will need to keep burning fossil fuels even if renewable energy catapults forward.

“It doesn’t mean we have to kiss hydrocarbons goodbye. In fact, we can’t,” he said.

In November, the company said it would cut the carbon footprint of making (not burning) its own petroleum products by 20 percent by 2035 and by about half by 2050. Shareholder groups, however, have noted that if Shell increases its overall fossil fuel production, then it will undercut some of those gains. Last year, shareholders overwhelmingly rejected a proposal by an environmental group calling for Shell to set and publish annual targets to reduce carbon emissions.

In the Sky scenario, the world’s consumption of oil would rise through 2025 before starting to decline. Global oil consumption would begin to drop in 2030 and fall below current levels in 2040.

“Liquid hydrocarbon fuel consumption almost halves between 2020 and 2050 and falls by 90 percent by 2070 in the sector,” the document says.

“It is striking that a company built on energy flow commodities sees them declining permanently after 2040,” said Peter Fox-Penner, director of the Institute for Sustainable Energy at Boston University, in an emailed comment on the scenario.

Other changes are just as massive. Nuclear power would triple, the total use of electricity would expand fivefold, and the world would be equipped with 10,000 carbon capture and storage (CCS) installations.

deforestation and global warming

“The reliance on CCS stands out in Sky, and what surprised me was the rapid decline in natural gas after 2040,” said Morgan Bazilian, a professor at the Colorado School of Mines who studies energy and fossil fuels. “Those are interesting contours, given Shell’s move toward natural gas in the recent past.”

Bazilian praised Shell’s future energy scenarios in general, noting, “In my mind,  Shell has always been a leader in this space, and that is again the case with Sky.”

Molchanov said in an email: “Most of the trends that Shell is describing — with the notable exception of carbon capture — are already commercially viable. Some are in widespread use, while others (e.g., hydrogen in transportation) are in early stages of adoption. But still, extrapolating from current trends a half-century into the future is a textbook example of ‘more art than science.’”

Boston University’s Fox-Penner agreed Shell’s scenario contains the core elements necessary to decarbonize world energy, and that many of the required pieces already exist in some form. But some changes, he said, are a lot harder to accomplish than others, such as cutting emissions in the agricultural sector and from key industrial processes.

“The greatest constraint is certainly not technology, it is political and economic disruption to governments and economies who depend on the current system and who must find the funds to retire a huge capital stock early and rebuild it in place,” he said.

Read the full article about Shell and Sky.

climate change and deforestation

Sacred Seedlings is a global initiative to support forest conservation, reforestation, urban forestry, sustainable agriculture, carbon capture and wildlife conservation. Sustainable land management and land use are critical to the survival of entire ecosystems. Sacred Seedlings is a U.S.-based program that supports the vision of local stakeholders. We have projects ready across Africa. We seek additional projects elsewhere around the world. We also seek volunteers, sponsors and donors of cash and in-kind support. Write to Gary Chandler for more information gary@crossbow1.com Together, we can stop deforestation and preserve biodiversity.

U.S. Carbon Offset Price Hits Record High

Price Of Carbon Pollution Going Up

Carbon permits for the Northeast’s carbon market traded as high as $5.10 a ton on Monday, an all time high, following the release of federal rules that will allow states to use markets to meet new emissions targets.

The market’s benchmark December 2014 contract traded for $5.10 a ton on the IntercontinentalExchange on Monday before retreating to $5 a ton later in the day, brokers said. The market’s spot contract for June delivery also traded for $5 a ton.

climate change and deforestation

On Monday, the Obama administration released regulations calling for the power sector to cut carbon emissions 30 percent by 2030 from 2005 levels. Under the rules, states can use cap-and-trade programs such as the nine-state Regional Greenhouse Gas Initiative (RGGI) to achieve the goals.

“The market had a knee-jerk reaction to the rules this morning,” one broker said about Monday’s trading.

The release of the rules had less of an impact on California‘s carbon market where the market’s benchmark contract traded for $11.90 a metric tonne, a broker said, the same price that it settled at on Friday.

The rules, issued by Environmental Protection Agency, are expected to create an additional incentive for states to join existing cap and trade programs such as RGGI and California markets.

Despite having implemented a variety of carbon cutting measures, California could have trouble complying with the rule since it is based on the “emissions intensity” of the power it produces, not just its overall carbon emissions.

reforestation and carbon capture

In 2012, California‘s emissions intensity was 8 percent higher than it was in 2005 due to the shutdown of a large, carbon-free nuclear power plant in Southern California. The state has had to rely on natural gas-fired plants to fill the gap, which pushed California‘s emissions intensity up in recent years, counter to the national trend, said Ashley Lawson, a Point Carbon analyst at Thomson Reuters.

Washington state must make the biggest relative reductions to meet the 2030 target, according to the regulations, followed by ArizonaSouth Carolina and Oregon.

States that rely heavily on coal for electricity, including MontanaWest Virginia and North Dakota, actually have some of the least stringent targets because they are deemed to have less of an ability to transition away from coal toward lower emitting natural gas or carbon-free renewables.

The governors of Washington and Oregon earlier this year said they would move toward pricing carbon emissions, possibly by linking to California‘s carbon market.

On Monday, Mary Nichols, chair of the California Air Resources Board, which oversees the California market, said she believes the state will exceed its federal targets

“We look forward to working with other states, including Oregon and Washington, in a regional approach to take action to cut carbon pollution and promote the cleanest sources of energy,” said Nichols.

Source: http://www.marinelink.com/news/northeast-alltime-carbon370310.aspx

climate change and deforestation

Sacred Seedlings is a global initiative to support forest conservation, reforestation, urban forestry, carbon capture, sustainable agriculture and wildlife conservation. Sustainable land management and land use are critical to the survival of entire ecosystems.

Sacred Seedlings is a U.S.-based program that supports the vision of local stakeholders. We have projects ready across Africa. We seek additional projects elsewhere around the world. We also seek volunteers, sponsors and donors of cash and in-kind support. Write to Gary Chandler for more information gary@crossbow1.com