Around the time of the financially disastrous OPEC oil embargo of the 1970s, Shell decided to see how far they could look into the future. What other shocks might be in store and what might they mean for oil? They fleshed out a series of plausible futures, exploring potential consequences for the oil industry. Their first scenario planning documents were excellent – taking into account a wide range of potential economic and societal changes. They had a large impact on Shell’s decision-making process.
Released this February, the latest scenarios entitled “mountains” and “oceans” are instructive mainly as windows into the distorted thought process of an industry that is growing increasingly myopic in the face of global change.
“Mountains” envisions a world in which “those occupying commanding advantage (at the top) generally work to create stability in ways that promote the persistence of the status quo.” In some ways the analysis is very sharp. Its description of growing geo-political tension between the U.S. and China before the two states recognize their mutual interdependence as world leaders is astute and laced with subtlety. The description of climatic and energy-related outcomes is not.
The scenario touts natural gas as the energy of the future, even as present-day atmospheric CO2 concentrations push toward 400ppm. Brushing aside more sustainable solutions with a dismissive jab, the authors suggest that “gas can also act as a backbone fuel as the renewable industry develops and intermittent supply becomes an increasing challenge.”
“Oceans,” meanwhile, “is a world in which competing interests and the diffusion of influence are met with a rising tide of accommodation” and yet, this global spirit of cooperation is not used on climate change mitigation or adaptation. Instead, a combination of coal and “significant investments” in carbon capture and storage (CCS) dominate the landscape, with public apathy apparently running rampant. The scenario imagines the citizenry will instead rise up and present united opposition to those “renewable resources that need large-scale or popular consent – such as wind farms and geothermal energy.” Presumably massive coal usage would somehow slip below the public radar.
Both scenarios are more interesting for what they omit than what they include. With such genuinely nuanced analysis, one can very precisely trace the outline of the missing elements – climate change and the rise of renewables – against the impossibly flat and calm political background Shell predicts.
We are presented with a world in which rising temperatures and growing climate change are stripped of everything that makes them problematic. Extreme weather events, rising sea levels and resource shortages either don’t exist or are expected to be met with a shrug of the shoulders: Uh oh my city is underwater; I suppose I’ll advocate for a gradual phasing out of coal.
Shell sees the world like a swimming pool where climate change is bringing the temperature up a notch or two. Meanwhile, climate scientists are looking at the same pool and predicting tsunamis.
The original Shell scenarios were meant to anticipate potential shocks, but while energy demand went up and down over the proceeding decades, it was not until recently that scenario planners might have imagined that a shock might precipitate the end of global relevancy for fossil fuels. Times have changed, but Shell has not. Can we blame the company for failing to imagine its own fall from power? One suspects the Shell scenario planners are more or less aware of what they’ve left out, but there are powerful forces behind these reports. The kind of powerful forces that are used to controlling the message.
In the best case, the scenarios amount to detailed exercises in wishful thinking for a set of fuel sources on their way out the door. In the worst case, they come true and runaway climate change devastates the planet. Either way, Shell is living in a different world.
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