5 December 2012 – The shale gas revolution is redrawing the geopolitical map of the world, and Shell has a four-pronged approach toward capitalising on that new supply, the president of Shell Oil Company told the 2012 Platts Global Energy Outlook Forum Fuel Fight: Environment Meets Economics in New York City.
Marvin Odum says his company has four pillars of its gas strategy. "The gas revolution is a creator of new jobs, a catalyst for a renaissance in American manufacturing, a bridge to future renewables and with carbon capture and storage, a destination fuel for an increasingly carbon-constrained economy.”
A recurring theme was the tension and conflicts between the energy industry, government and society, which Odum calls a divide that did not have to exist. Speaking to recent issues within Shell Oil Company, which is the US arm of Royal Dutch Shell, Odum says the company’s drilling program in federal waters offshore Alaska is a sign of a real example where business and government work together to secure both the opportunity and the protection. (Shell received limited permission to drill in the Beaufort and Chukchi seas this summer, but the limitations on the permit required the company to halt operations for this year before it reached the hydrocarbon-bearing zone.).“To balance the rewards and the risks inherent in drilling in such an environmentally sensitive area, government, society and business (must) work with one another to define expectations, agree on operations standards, and collaborate on solutions," Odum says. Both the Bush and Obama administrations "did their due diligence" and Shell was issued drilling permits.
"I believe that this administration sees these resources as critical and strategic to the nation and part of their all of the above energy strategy," Odum says. He also says that even as the US is dealing with a glut of natural gas that is creating the opportunities for the four pillars, there are still major supply/demand balance issues for the world going forward. "It’s true that the world’s total supply of energy has never failed to meet demand…not yet, anyway. And it’s true that technology breakthroughs have resulted in such a short-term glut of natural gas in this country that fears about supply seem irrelevant."
But long-term global demand continues to rise, Odum notes. "Even if energy efficiencies reduce growth by 20%, and even if ordinary rates of supply growth boost supply by 50%, we could still face a gap between supply and demand equivalent to the size of the entire industry in the year 2000."
At the same forum Robert Bryce, senior fellow at the Manhattan Institute and Forum panellist, said renewable energy “may be a darling of politicos and the green/left, but it simply cannot provide the enormous scale of energy that the world demands at prices consumers can afford.Furthermore, the growth in the coal market is swamping any gains that might be had from renewables,” Bryce says. “In 2011 alone, global coal consumption increased by about by 3.9 million barrels of oil equivalent per day. That’s about the same amount of energy as is provided by all global non-hydro renewable sources, such as wind, solar, and biomass.”
To the contrary, says Jigar Shah, founder of SunEdison and former CEO of Carbon War Room. “We can solve climate change. The deployment of cost-effective technologies we have invented since the 1970s represent the largest wealth creation opportunity on the planet.”