Shell says oil is on its way out.
In a Thursday statement, the fossil fuel giant said its “oil production peaked in 2019”, and that we can now expect it to decline gradually by 1 or 2% per year. Shell also said its total carbon emissions peaked at 1.7 gigatons in 2018.
The statement does not come as a total surprise. The oil market has deteriorated for years, and since the covid-19 pandemic began 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, co-energy giant BP said the world may have reached all the peak oil. Shell’s own chief financial officer family play during the announcement in May when she informed investors that the company was experiencing a huge destruction of demand that we do not even know, ‘and shortly thereafter, Shell written down $ 22 billion on its balance sheets. Yet it is the first time it has made a live announcement of this kind.
With oil deteriorating, Shell announced in September that it would reach a net carbon footprint by 2050, but that did not say much in the way of interim targets. The energy company now says it will build on the plan by launching an “accelerated strategy” to phase out emissions.
But in a typical Shell way, the real plan to get there is weak as hell. This includes promises to increase investment in solar and hydrogen power quickly, but also to invest money biofuel—What research appears to be not so polluting as gas and diesel. The company said it plans to make biofuels and hydrogen up to 10% of its portfolio by 2030. Even more insultingly, the company also plans to greatly increase its production of liquefied natural gas and add 7 million tons of new capacity to it. this decade. And while the company has said it will plow up to $ 3 billion in renewable energy in the short term, it is still spending tens of millions on oil and gas exploration.
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By increasing the production of dirty energy, it will be quite difficult to reduce the emissions, which is why Shell said last week that it will increase the use of “nature-based” forest settlements and the capture and storage of carbon. The company is already doing it to produce “Carbon neutral” natural gas. But carbon acceleration is, put simply, not real climate solutions. The compensation of greenhouse gas pollution does not actually impede emissions. In addition, clearing projects were also a source of horrific environmental justice as they often led to people being evicted from their homes to make room for planting trees.
Theoretical carbon capture technology would suck pollution in theory, but it has not been proven to work on a large scale. Even if that happened, it would do nothing to stop the other poisonous impact from at the source of withdrawal, so it is not a substitute for rapid phasing out of fossil fuels.
There’s another reason not to celebrate the company’s announcement: Shell has also made it clear that workers will suffer if oil production falls. He said earlier that the transition to low-carbon energy will include 10% redundancy of his workforce. Yet, of course, he did not announce any wage cuts for the managers to make up lost oil revenues.
Shell’s claim that it has reached a peak oil is further proof that the market for fossil fuels is changing. But it also illustrates why we can not leave the transition to market forces. We must reduce fossil fuel production much faster than Shell’s plan allows, and to put an immediate end to all new oil and gas infrastructure. We must also ensure fired fossil fuel workers has good work to move forward, and with which renewable energy is not built abusive work practices or those who break fragile ecosystems. Judging by Shell’s track record on both front, us can not rely on doing the right thing. While one of the largest oil companies in the world is acknowledging the end of oil is a good thing, it still points to the need for governments to take a much more active role in ensuring that we end the road on a achieve fair and just way.