Subscribe to Common Dreams News Updates
Most Popular This Week
Popular content
Today's Top News
Shell Dumps Wind, Solar and Hydro Power in Favor of Biofuels
Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today. It plans to invest more in biofuels which environmental groups blame for driving up food prices and deforestation.
A Shell employee conducts a safety walk-through of a tanker truck at a gas station in Kuala Lumpur, 2005. (AFP/Tengku Bahar) Executives at its annual strategy presentation said Shell, already the world's largest buyer and blender of crop-based biofuels, would also invest an unspecified amount in developing a new generation of biofuels which do not use food-based crops and are less harmful to the environment.
The company said it would concentrate on developing other cleaner ways of using fossil fuels, such as carbon capture and sequestration (CCS) technology. It hoped to use CCS to reduce emissions from Shell's controversial and energy-intensive oil sands projects in northern Canada.
The company said that many alternative technologies did not offer attractive investment opportunities. Linda Cook, Shell's executive director of gas and power, said: "If there aren't investment opportunities which compete with other projects we won't put money into it. We are businessmen and women. If there were renewables [which made money] we would put money into it."
Shell said biofuels fitted its core business of providing fuels, logistics, trading and branding. Cook added: "It's now looking like biofuels is one which is closest to what we do in Shell. Wind and solar are interesting [but] we may continue to struggle with other investment opportunities in the portfolio even with big subsidies in many markets. We do not expect material investment [in wind and solar] going forward."
The company also confirmed that it would increase its dividend payments this year by about 5% to $10bn.
Friends of the Earth (FoE) criticised Shell for freezing investment in renewables such as wind in favour of biofuels. "Shell is backing the wrong horse when it comes to renewable energy - biofuels often lead to more emissions than the petrol and diesel they replace," the campaign group said.
Until recently, Shell's investment in wind power featured prominently in its corporate advertisements. FoE said the company's move heralded a slightly more honest approach. "Shell is at least being a bit more honest about the fact they are a fossil fuel company. It has seen the limitations of the greenwash it was putting out a few years ago."
Shell has about 550 megawatts of wind farm capacity around the world, enough to power a city the size of Sheffield when the wind blows. Last year, it pulled out of the 1,000MW London Array project, the joint venture to build what would be the world's largest offshore wind farm, in the Thames Estuary. Former project partner E.ON has yet to decide to continue with the £3bn investment needed.
Outgoing chief executive Jeroen van der Veer admitted that the company had suffered some "technology baths" in the past when it backed unprofitable technologies. "We don't do it [renewables] all."
The company has predicted that by 2025, 80% of energy will come from fossil fuels and 20% from alternative energy sources. Yet it is spending just over 1% of its budget on alternative technologies. Over the past five years, only $1.7bn of the $150bn it has invested has gone towards alternative energies.
Cook pointed out that at one stage the company only invested 1% of its budget on liquefied natural gas, which is now a big part of its business. "You have to start somewhere," she said.Van der Veer also admitted that Shell's overall R&D budget would "fall a bit" as the company focused on the most promising technologies and in the wake of the oil price slump.
The company said it would raise debt levels to maintain dividend payments and its spending programme. Van der Veer insisted that energy demand in the long term was strong and oil prices would recover. "The problem is you don't know when the long term starts."
- Posted in
70 Comments so far
Show AllThe present methods of producing biofuels are less sustainable and more harmful to the environment than the use of fossil fuels.
Attractive investment opportunities? You bastards will be trying to make a buck when you have the runs from dirty water and are choking on dirty air.
Apparently, Shell thinks wind is less reliable than the food sources it can acquire from several billion poor people.
Shell has been shafting poor people in Nigeria for years, why not shaft poor people in the rest of the world.
So true. Only I think you're letting them off easy by calling it "shafting." Plunder and murder are more like it.
Quite true. It sounds to me like the beginning of an argument in favor of making all energy a public utility. In all such cases, public monopoly is better than private oligopoly.
So long as the public pays attention to its business, that is.
Incorrecto!
Good, let them miss out on the money to be made in renewables.
Only the poor taxpayers don't know that the only economical viable wind is the one coming from the collective mouth of their politicians - viable for the politicians themselves to be precise. Get the calculator and compute the costs, based on energy density, availability of wind and sun, material cost of installations, cost of land, transportation etc. Solar and wind are not only cost ineffective - they are net energy losers. The only viable non-carbon energy today is nuclear. I'm already seeing the chickens-little flying in the politician-induced storm. See this:
http://www.brusselsjournal.com/node/3822
Anti-nuke interest groups are a shady bunch, tightly mixed with Washington. If you read the link I posted, you'll see their true agenda exposed: "to turn the clock back many centuries, by shutting down existing technologies in the name of non-existing future ones. When, in previous history, Klaus asked, has a civilization abandoned existing technologies before the successors have been developed?" ... Dr. Robinson excoriated the efforts of environmentalists to bury the nuclear industry in favour of speculative alternatives. "Free men produce more than they consume." Right now, "We're standing on the backs of free men that produced these things before us." Dr. Robinson cited the Palo Verde nuclear reactor site in Arizona. It's the largest nuclear power generation plant in the United States. It was supposed to consist of ten reactors, but only three were allowed to be completed. Those three reactors produce the electricity of ten Hoover dams. Palo Verde is producing electricity at one-tenth to one-fifteenth of what Californians are now paying. The United States would now be exporting energy if its nuclear and hydrocarbon capabilities hadn't been legislatively sabotaged.
Oh please, do you know any anti-nuke people personally? I know quite a few. Their main concern is the health (hell, death) problems, environmental contamination, and costs associated with nuclear power. Oh, not to mention the nuclear winter risks from proliferation.
Anti-nukes people are a shady bunch? Right. We are some wild Luddites who want to leave our children and grandchildren living in houses without heat and electricity. We want walking on our knees to be the main form of transportation.
You are ludicrous, and not in a good way.
Joe
Kissinger is anti-nuke, no?
OK you win - some are shady.
Joe
Oh no, the sun doesn't always shine and wind doesn't always blow! Except, solar thermal plants work at night too. Except, there has always been wind and sunshine, and will always be, unlike fossil fuels and uranium which are being depleted. Why are you looking to keep energy consumption at current levels anyway? Also, please show me the research that shows renewables have no chance of powering us completely. I am at work and don't really have time to look this stuff up myself.
I already posted a link and also some excerpts, see below. You sound like those people who "invest" in the Nigerian scam - "I'll send them the money, because nobody showed me that THERE IS NO CHANCE of getting them back 10 times over". As far as research, read what I posted and do more yourself. What do you think, I'm sitting around providing free services?
Your link is to an article about a gathering in NY of scientists and others saying CO2 isn't doing crap to the planet. There's nothing in there about renewables unable to power the country. And the entire site looks like a Swiss version of a Right of Center blog. Very credible :-P
Actually your the one that made an argument about renewable energy being cost ineffective, and posted a link that has nothing to do with that. The burden of proof to support your claims lies squarely on you.
It must be hard being a parrot for big business and business as usual...so hard to keep the lies straight.
What you said. He pulled the wrong link out of his link library.
Joe
Wow, a link to a page full of climate change denial. How surprising. And an argument for the 'saving' grace of nuclear power. How much is the nuclear lobby paying you? Perhaps you could relocate to the nearest uranium mine and begin full time employment there since your such a champion of the energy source that produces toxic waste for anywhere between 10,000 and 100,000 years.
You seem to have infinite faith in the ability of humans to deal with such waste, yet forgive me if I'm skeptical.
And labeling those opposed to nuclear power as shady and in league with Washington, that's a real compelling argument. Way to brush of the legitimate concerns about waste management, mining, and proliferation in one fell swoop. I shouldn't be surprised though, you seem proscribe to the view that humans have the right to alter the planet to suit their pleasures, no matter the costs to the rest of life.
But arguing for the rights of other living things and their inherent right to health or even existence would probably qualify as an extremist and shady position to you.
That link was about climate change denial and stuff about how the ocean can keep absorbing CO2. No mention of the acidifying effect.
If wind is so inefficient, why do you see miles of wind turbines in northern Europe? Someone who really wants to know could get some hard data from that experiment. It the technology is still inefficient, it could be improved. The coal and oil companies are blocking R & D of alternate energy technologies. They do not want to lose their stranglehold on the marketplace, so they spend a lot of time on disinformation.
One side effect of insisting on oil, gas and coal only is that the military contractors get to make even more money on our forays to dominate sources of hydocarbons that (drat) happen to be under other people's soil. And by the way, even if we could prevent Chernobyls, we still do not have a good solution for nuclear waste.
Joe
It is far too difficult to pollute Mother Earth with Wind, Solar and Hydro Power.
"Shell will no longer invest in renewable technologies such as wind, solar and hydro power because they are not economic, the Anglo-Dutch oil company said today."
Wind, solar and small scale hydro are not economic for Shell because they can't be centralized. They overlooked geothermal which can be centralized.
Home green power production is the answer. Solar panels, windchargers and solar water heaters on every rooftop and a connection to the power grid will make your electric meter run backwards and reduce the need for storage batteries. You can sell your excess power to the electric company, charge your electric car, run your appliances, weatherize and conserve energy.
No matter what we do however, unless we address population growth and extreme wealth/power concentration as basic sustainability issues, it will all be band-aids on a dying planet.
I'm no expert, but I would think we also need a national grid to move power on those occassions when local sustainable energy is in low supply. I would think a national grid of DC power is the best choice, but again I'm really only guessing.
I imagine that there is already much of a national grid in place to carry electricity produced by oil, nuclear, coal etc. The problem would be political - sharing rights etc.
I'm no expert at all either, but ezflyer has a point. It seems to me that if a locality or even a single building were to produce a portion of its own power through wind, solar or geothermal, it would relieve the drain on the national grid, having almost the same effect as being connected.
Local sources and distribution of power may have a further beneficial effect of isolating some local power when those massive regional blackout waves occur.
Our conversation here illustrates why we need collaborations and initiatives in which those who ARE experts get together and grapple with these questions of what it would take to make it work. Since it is not likely to be the EZ MUNNY guys in coal and oil who will do a credible job, we the taxpayers could put up some seed money to get it started. There are smart and far-seeing people who would work on this if given a chance. If it is done right, it would pay off big time.
Joe
The problem with DC power is that it is much harder to change the voltage level of DC power than AC power. That's why AC became the standard for power systems throughout the world. DC generators must operate at the same voltage as the power to be supplied to the end user. Power at thousands of volts is not safe for home use, but power at 100 or 200 volts cannot be transmitted more than a mile or so before the line losses cause the voltage to drop to unusable levels. AC power voltages are easily raised or lowered by the application of transformers but transformers do not work for DC power. The power grid must remain AC for this reason, and sources like solar cells which produce DC power require a converter which changes the DC energy to AC if it is to be connected to the grid.
Right. Though DC power is better, I think it is more dangerous and harder to transmit long distances, though inverters can take care of that.
This was easy to see coming- biofuels (and hydrogen) are... not sure of the word... single point commodities? Meaning there has to be a 'middleman' like with gasoline. Good for shell. Solar, wind, geothermal- they all can be (and would be, for the most part) owned and operated 'locally' and have a lot more owners - good for sharing the wealth, bad for big corporations.
scenario: you have solar panels on your roof, geothermal in your yard, maybe even a wind turbine (those 'horizontal' ones are awesome) so you can pwoer your own home and (electric) car, even sell some energy back to the grid.... OR you gan go to the pump or utility lines and get biofuels/hydrogen. Which one fits more in line with Shell's business model? You know who's it (could)? GE.
Excellent explanation!
Capitalist societies which are based on the profit motive will always continue to put business interests above people interests whether it be decent health care, good schools, protecting the environment and you can go on and on. Profits before people are what count! It is more profitable to continue doing what they are currently doing.
One thing that is not emphasized enough -- certainly not by me, so I'm guilty as well -- is that these societies based on the profit motive are not iron-clad institutions. We can change them but it's going to take a hell of a lot of work. People throughout Latin and South America are a good example -- countries that have been subjected to the worst forms of neo-liberal imperialism -- they are standing up and saying "no, we have had enough." They are taking matters into their own hands and building societies that respond to the people's needs. Of course, the US is indeed, doing everything in its power to ensure that they fail. We, in the more industrialized societies can do this as well but we need grassroots movements to push for policies that benefit the needs of all and not the capitalist elite. Waiting for Obama or any daddy-like savior is not the answer. Without popular movements, Obama remains exactly where he is: a tool for the ruling elite.
Some good observations, esp. dustinchicago, ezeflyer, Greg R and drholmquist. All that aside, however, diesel fuel (and myriad other useful products) could be made sustainably from hemp.
Wouldn't you still be burning a hydrocarbon, releasing CO2?
Joe
Planting many hectares of hemp would help absorb CO2, unlike Shell's business plan of clearing the rain forest to plant corn for ethanol.
OK - that's a little bit of mitigation. Still, I would prefer to keep burning carbon to a minimum, if possible. Also, hemp would have to take over some arable land, which is not the greatest thing for food production.
Joe
Rather than taking over "arable land" perhaps we could allow hemp to be grown only on desert coastlines inside seawater greenhouses. (http://www.seawatergreenhouse.com)
I really like the idea seawater greenhouses for growing vegetables and fruits for people in arid coastal areas. But in terms of the scale required for electric power and transportation, I have doubts. But as I said, that is why we need a Manhattan Project of honest people to test and develop ideas armed with measurements and facts.
Joe
The CO2 present in the atmosphere apart from human activity is necessary and beneficial. Burning fuels derived from crops or wild vegetation does not change this baseline amount of CO2, as the carbon moves from plant material to the atmosphere and back over a period of months or years. It is no different than the natural growth and decay of plant life. The problem occurs when fossil fuels are burned and CO2 which has been out of circulation for millions of years is added to the baseline amount already in our modern atmosphere.
You describe the natural carbon cycle, the rhythms of life and death. Even with renewable recently grown plant energy, the RATES of burning and regeneration make a difference. Human intervention changes those rates drastically. Nobody would recommend cutting down large area of forests for fuel at a rate that exceeds regeneration and then waiting for the forests to regenerate. Denuding the landscape upsets the water cycle, for one thing. Practices like that have contributed to the desertification of Africa, for instance. We are facing world wide water shortages, which is another counter-indication against massive reliance on bio-fuels. Soil depletion is another factor. All this can only become more difficult as human population continues to grow, reaching toward the limits of our closed system.
So that's why I believe we need sort of a Manhattan Project to develop green energy based on sound science. Facts and measurements make a difference. So do creativity and determination to leave a cleaner and safer environment for our future generations. If there is any excessive alarmism, the root of that is well-earned lack of trust in the information and practices of government and industry.
Joe
Diesel can also be made from cooking oil, and it's already kinda big...turns a waste into a fuel, can't beat that.
We have two basic options: Let the people organize society or let the elite organize society. Allowing the elite to organize society leads to all the catastrophic problems we face today. Organizing society means choosing many things such as energy options, consumption levels, and the retail cost of energy.
Corporate elites organize society to their own advantage, keeping the people out of the loop in both the civic and market sides of societal organization. Elites assign the people not to organize the society but to implement the plan.
Elites leave the people guessing about the viability of energy sources, sustainable limits on consumption, and the significance of retail prices. The people could easily acquire specialized expertise in such areas to contribute to a system of societal self-organization, creating huge benefits for all, leaving the elites completely out of the loop.
Corporations such as Shell will continue to exist but their market shares will be tiny and their dreams of godzillahood unfulfilled. If the people want to contribute to self-organization, they simply have to start doing it, acquiring the specialized skills and putting it together. Their vision is to put truth to work for the people, driven by universal demand for self-organization. The idea that people need elites to manage them and write paychecks is another illusion propagated by elites to maintain the elite boot on the people's necks.
"The people could easily acquire specialized expertise in such areas to contribute to a system of societal self-organization, leaving the elites completely out of the loop."
Take out the word "easily" and I agree.
We would need engineers and scientists and they have to eat. We non-elites create all the wealth in society and pay so much in taxes. Right now much of that money is used for things that do not benefit us. We would have to shift the priorities so we chip-in to support what we need, not what the elites need.
Easy? I don't think so. It would take organization and dedication. It would take not being swayed by propaganda and divisiveness.
Joe
But of course.
Shell is a contra-indicator.
Fools know more.
I don't know about Shell, but I'm planning on going 100% solar at my house and purchasing an EV (maybe a Volt to begin with) in the next decade. Shell can either choose to produce the solar panels or I can simply go to a competitor.
I made a comment below about nuclear energy. I also gave a link to the International Conference on Climate Change which discussed environmental fear-mongering and it's high cost on society. AFAIK, nobody on this thread researched or at least reasoned about the information provided. The truth is, the economy is failing because we produce too little. The solar/wind also produce too little. The whole point is to decriminalize nuclear energy because it's the only economically and environmentally viable energy. Then the market will decide between the technologies. Of course buy all the windmills and solar panels you like. Just don't throw taxpayer money at this provably uneconomical solution. Again do more research and think for yourself. Do the math yourself. The reason for the current economic crisis is too little domestic production - energy included. It all comes from prohibitive regulation and cannot be fixed with printing money and deficits. Actually, they make it worse.
Nuclear energy appears cheap because we taxpayers are subsidizing it. A recent MIT study found that nuclear power is actually 50% HIGHER in cost than power generated from natural gas.
Don't dismiss solar and wind. Shell is getting out of them because there isn't a big profit in them. Anybody (like me) who has a little extra capital can put PV on their roof (as well as solar water) or put up on of the new, quiet vertical axis wind turbines and get (at least here on Maui) a 10% return on investment.
For those who don't have the capital, communities such as Berkeley and private leasing companies are starting up homeowner programs to cut out the big corporations and allow regular people to install solar and keep their utility costs down.
Since Shell can't control solar and wind, they can't make huge profits gouging us. So they turn to biofuels where they along with their friends, the energy-intensive Big Ag Boys and continue to rip us off.
Not true! Why would government subsidise something which is cheap! On the contrary, the major cost in nuclear power production is compliance with government regulation. Not all of it is wrong, but most of it is counter-productive in terms of safety and cost.
In the words of Dr. Gregory Greenman: "It is not true that actual nuclear power station construction profits from public money : in fact the contribution of the state is mainly negative, due to red tape costs, license costs and so on. Consider the "anti-subsidiies" that Government has foisted on the nuclear industry. For example, LILCO - Long Island Lighting COmpany - which is the electric utility that services Long Island New York built a nuclear power plant on Long Island called "Shoreham." The then Governor of New York was Mario Cuomo (D) - who was very opposed to nuclear power. The Governor of New York appoints the members of the New York Public Utilities Commission; and Cuomo appointed people who shared his anti-nuclear power views. The Public Utilities Commission, which sets the rates that the utility can charge for its power; told LILCO that if LILCO operated the Shoreham plant - then they would have to sell the power for FREE!! They could not charge for electricity generated by Shoreham. However, if LILCO agreed to never operate the Shoreham reactor and to dismantle the plant - then the New York rate payers would be charged an amount that would allow LILCO to recoup its investment in Shoreham. So there's the choice confronting LILCO. LILCO borrowed over a billion dollars to build Shoreham, and if they operated it - they would receive ZERO income - and LILCO would be out the construction and operating costs of the Shoreham plant. If LILCO dismantled Shoreham; then LILCO would get its investment back from the ratepayers of New York; even though those ratepayers would not get anything in return. That is just ONE example of what nuclear utilities have had to face. Is it any wonder that the CEOs of utilities are apprehensive about investing in nuclear power given that history. That's why we may
have to entice them back into building the nuclear power plants we need to power the USA without polluting the atmosphere with CO2."
PS. I know MIT research which addressed hydrogen generation from nuclear power. This has to do with the problems of hydrogen itself, nuclear power is not the problem here. It's still the cheapest.
Arktig- "Not true! Why would government subsidise something which is cheap!"
Because it ties directly into the Military Industrial Complex dumbass. Depleted Uranium weapons. Bombs over Baghdad. Kill two birds with one lobbyist.
Ok, I'll bite.
1st. You make a comment about nuclear energy and posted a link to a page about a conference of climate change skeptics/deniers. How does this prove your claim that nuclear power is more cost effective than renewables? The burden of proof to back up such claims falls squarely on you, and can't be avoided with comments like 'do the math yourself'.
2nd. The economy is failing because of lack of production. What? How about venture capitalism run amok, more like it. This is such a simplistic explanation as to be laughable. And a proper response could span a much longer post that this.
3rd Turning the blame on environmentalists for "fear-mongering and it's high cost on society," which your precious Conference on Climate Change discusses. Smoke and mirrors cannot hide the devastation to the Earth wrought by businesses in pursuit of wealth. Way to turn the blame to the victim....classic trait of the abuser. 'Corporations aren't to blame for the economy collapsing, we just aren't producing enough and its all those damn environmentalists fault. There holding us back with their selfish cries for protecting the environment.'
4th Claiming again that nuclear is economical and renewables aren't. Your just a veritable spout of unsubstantiated claims. Here's a few points of interest that complicate the simplistic picture you paint.
-Capital costs. Where are the billions going to come from to build the plants? Private investors or the public. Most nuclear in the US is subsidized because private investors want such a high rate of return that the cost of reactors make it unfeasible to borrow from private sources.
-Siting. People don't want nuclear plants near them, no matter what you say otherwise.
-Safety. All it takes is one Chernobyl to spread radioactive dust around the world.
-Timeframe. Nuclear reactors take a long time to build, and last time I checked they haven't started many in the US recently, and they wont be anytime soon.
-Cost comparison. Wind is coming in at around $3600 kWe (for the Challicum Hills wind farm in Australia operating at 30% capacity), recent estimates of nuclear are in the $6000-7000/ kWe range for the US.
http://www.neimagazine.com/story.asp?sectioncode=147&storyCode=2050690
-Decommissioning. Don't forget to include this in the cost of nuclear power.
-Waste disposal. Or this.
-Nuclear proliferation. Reprocessing fuel creates plutonium. Plutonium is a key ingredient to nuclear weapons. Yeah, lets start the cold war all over!!
-Health. Mining uranium is horrible for those that mine it and those downstream of mines. Japan may be able to get it from sea water, but they aren't. And neither is anyone else to date.
You clearly feel nuclear is the answer. The reality is that efficiency measures have the best chance of dealing with future demand, and can be implemented right now. No red tape, no capital problems, no toxic everlasting waste. Currently wind and solar are competitive or close and the technology is getting better all the time. Given another few years, it will probably be cheaper than nuclear and without all those lingering problems.
Beyond all that, these are technical solutions to a problem that requires adaptive ones. Global warming is happening. You can debate its cause or how severe the impacts will be, but the bottom line is humans will have to adapt a warmer planet. Even small shifts in temperature will have impacts we cannot fully predict.
Electricity generation, whatever its source will not matter if we as a species cannot adapt and change our destructive ways. Or is that environmentalist fear mongering too?
Wow , what a surprise. Shell cant make sunlight or wind nor can they controll it.
There is plenty of wind and sun light, dont have to drill for it or invent a fancy formula.
Save the earth: we need clean coal and safe nuclear power NOW!