Hidden Joule

Oil giant Shell has announced that the company will stop investing in solar, wind and hydroelectric technology in favour of biofuels. In a press conference earlier this week, the head of Shell’s Gas and Power Unit told reporters that: “We do not expect material amounts of investment in those areas going forward.”

Despite their recent ad campains, Shell’s investment in solar, wind and hydroelectric power generation only made up 1% of their total investments. That 1% will now be drastically reduced while investment in biofuels will increase.

Shell is also very interested in developing carbon capture and sequestering (CCS) systems and the controvercial oil (specifically Bitumen) extraction from oil sands in Canada.

As regards the oil sands in Canada, they continue to be good projects. We will need those supplies in the longer term and we believe Shell is well positioned to develop these important resources.

The environmental impacts of oil sands are not off the scale. Their total greenhouse gas footprint – at 24 Megatonnes in 2007 – equals about 1.5% of emissions from the EU’s power sector.

The mineable area is only 0.1% of the Canadian boreal forest. And the mined areas can be rehabilitated more quickly than areas destroyed by a forest fire. (Reclamation of mined areas can start 15 years after first disturbance, taking about 40 years to be certified as a full self-sustaining ecosystem. The return period from a forest fire is about 80 years.)

It’s not that we’re saying the environmental challenges associated to oil sands are too small to worry about. They have to be mitigated. But they should be seen in the right context.

– Jeroen van der Veer, CEO, Royal Dutch Shell