Wednesday, May 28, 2014

Oil Giant Says Profits Are Assured

Shell’s Puget Sound refinery and all its sites will be busy for years ahead, the conglomerate insists (Credit: Walter Siegmund via Wikimedia Commons) Click to enlarge.
Shell, the world’s largest oil company, believes that governments will not damage its business by taking rapid action on climate change, and says all its oil reserves will be needed and sold at a profit.

In a robust reply to a recent report by the Carbon Tracker Initiative, Shell explains the company reasoning for investing in tar sands and other high cost and difficult-to-extract oil reserves.  It says that an ever-expanding global economy, fuelled by population growth and great prosperity, will need more and more oil and gas at least until 2050.  This will support high prices.

The Carbon Tracker Initiative report, and subsequent research by Friends of the Earth Netherlands, say that many of Shell’s long-term, high-carbon projects in the pipeline will become highly vulnerable to losses or will simply be left in the ground when international law starts to constrain the burning of fossil fuels to limit temperature rises.

But Shell says this will not happen because they do not believe politicians will take action quickly enough to avert global warming.  In a long letter to investors, they say they can be assured that the company will continue to make substantial profits out of burning fossil fuels for the foreseeable future.

The open letter from Dr J.J. Traynor, executive vice president, investor relations, at Royal Dutch Shell, reveals that the company is placing great faith in carbon capture and storage, and is developing projects in Australia, Canada and Scotland.

Many critics believe that carbon capture, while theoretically possible, has limited potential because old oil wells or other potential storage facilities where the carbon dioxide might be pumped are distant from where the fossil fuels are burned.  It therefore makes the technology expensive and unlikely to be a major factor in reducing emissions.

Oil Giant Says Profits Are Assured

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