Shell’s green energy plans are some of the most ambitious in the oil industry, despite assigning just a 10th of its spending pot to “new energies”.
Shell told investors in 2017 it would spend between $1bn to $2bn a year developing a clean energy business up to the end of 2020, up from a previous plan to spend up to $1bn a year in the same period. Under the plans, Shell would spend up to $6bn on green investment, but instead it is on track to meet a third of this, with only a year left for the company to meet its guidance. Up to the end of 2019, Shell’s guidance suggests it should have spent at least $3bn.
In the same four years, the company spent more than $120bn developing fossil fuel projects and set out plans to increase its total spending to $30bn a year in the early 2020s. A spokesman for Shell declined to comment.
Shell is considered a climate leader within the oil industry despite spending a fraction of its total budget on new energies, which include biofuels, hydrogen and electricity investments.
Data from Rystad Energy, a Norwegian consultancy, shows that Europe’s five largest oil companies – Shell, BP, Total, Eni and Equinor – together spent a total of $5.5bn on renewable energy projects to date, compared with a combined total budget of almost $90bn last year alone.
Oil Change International’s executive director Stephen Kretzmann said executives “trumpet their relatively tiny investments in renewables” but continue to “pour more fuel on the fire of global warming every day”.
He said: “It used to be the case that some people believed that an oil company that invested even only a small portion of their resources in renewable energy was worthy of praise… because it makes us feel better to believe that the people who run these powerful companies get it.”
Oil bosses have voiced support for global climate targets in public but the industry continues to invest an estimated 1% of its annual spending budget on clean energy while producing more fossil fuel products than the Paris Climate Agreement allows.
“The executives that run the carbon companies definitely do not get the part about the need for them to make less of the thing that is driving climate disaster,” Kretzmann added. “The big problem isn’t too little investment in renewables – it’s too much investment in, and government support for, fossil fuels.”
Shell’s green spending plans were dealt a blow earlier this year when the company missed out on a multibillion dollar race to buy Dutch utility Eneco, which has a large renewable energy portfolio. Shell and its pension fund partner lost out to a consortium of investors led by Japan’s Mitsubishi, which paid $4.5bn for the company.
The deal might have pushed Shell’s green investment towards its planned spending range. Shell said it was disappointed it lost the bid, and said that it would continue to invest growing gas and electricity generation from renewable sources.
Shell’s previous acquisitions have included UK energy supplier First Utility, a 49% stake in Australian solar company ESCO Pacific, and Eolfi, a French renewable energy developer that specialises in floating wind projects.
Shell plans to spend $2bn to $3bn through its “new energies division” every year between 2021 to 2025. The company said it plans to become the world’s biggest electricity company by the 2030s, and hopes to bring a reliable electricity supply to 100 million people in developing countries by 2030.
Jillian Ambrose and Jasper Jolly
This article first appeared on the Guardian
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The problem is that in order to build solar panels or wind turbines you need oil based products. To maintain wind turbines takes oil and oil based chemicals, particularly offshore wind turbines where maintenance staff have to travel by boat or helicopter to service them.
Even insulating electric cables takes oil based chemicals so does building the casing of electric batteries and a lot of the interior of an electric vehicle. And Greta’s transatlantic yacht used a huge amount of oil based materials in its hull, sails, rigging, fridge, life saving equipment.
Damned if you do and damned if you don’t for the oil companies. While we can’t continue to burn it as a fuel we still need it for everything we want and need in our everyday life.