Twelve years ago the oil giant Shell announced it had established a fifth core business – called Shell International Renewables or SIR- which was designed to exploit the growing renewable market.
Over a decade later, the oil company has beat a humiliating retreat out of the main renewable market. In March this year Shell came clean about pulling out of clean energy, announcing it would no longer invest in wind, solar or hydrogen.
Two months later, when Shell’s new Sustainability Report was published in May 2009, it included six “pathways” to help reduce carbon dioxide. Prominent on the list was unproven Carbon Capture and Storage (CCS). Renewables – apart from biofuels – was conspicuous in its absence.
This is not a coincidence. There has been a deliberate policy by the oil company over the last few years to go back to do what it does best. Shell is an oil and gas company. It has ditched its renewable business at the same time as moving into heavy oils.
Shell does not see the immediate future as renewable, more of trying to “clean” fossil fuels. To this end Shell has been investing in CCS technology, and is banking on the CCS to help clean up its dirty tar sands business in Canada.
So it comes as no surprise that Shell has become the first oil company to enter the UK government’s race to build a carbon capture and storage plant. Shell is set to join the consortium led by Scottish Power, which is leading one of three groups of bidders for government funding to try and build the first commercial-scale system to demonstrate that CCS can actually work.
John Gallagher, vice-president of Shell has given a very telling comment to the Financial Times, saying that: “The core business of the oil and gas industry is the handling of gas and liquids above and below the surface – that makes companies like Shell very well placed to help deliver CCS. The opportunities that exist in Scotland and the North Sea should be maximised wherever possible.”
You need to read between the lines here. Shell stands to make millions from CCS, especially if its infrastructure in places like the North Sea are used to transport and store CO2 or be “maximised” as John Gallagher says.
You can see the Shell accountants working out how profits can be maximised – and in a million years – they could of not come up with a better solution than to be paid to clean up their own pollution and store CO2 in what will soon be redudent oil reservoirs.
The problem from a climate perspective is that by ditching its renewable business and going back to oil and gas, Shell is, by default, continuing the fossil fuel era. It has, once again, put profit over principles and care for the planet.
Furthermore, there is no proof that trying to pump CO2 into used oil-aquifers in the North Sea, will actually work.