Royal Dutch Shell was recently in the news for their decision to pull back on oil exploration in the Arctic, after suffering costly damage to two of their ships. The decision showed a degree of foresight that some of their competitors would do well to emulate. But then Shell has been known for exercising foresight through their extensive and carefully considered scenario planning efforts for forty years. Their latest report, which was just released last week, contained a combination of good news and bad news.
Of course, any computer modeling exercise is only as good as the assumptions it starts with and given today’s wildly divergent opinions and attitudes and the (politically and otherwise) volatile climate we live in, it is bordering on impossible to predict what the human race is going to do in the next few months, never mind the next 87 years.
Still, the two New Lens Scenarios Shell selected to follow into the future are worth a look.
The first scenario is called Mountains and it is characterized by “status quo power locked in and held tightly by the currently influential. Stability is the highest prize: those at the top align their interests to unlock resources steadily and cautiously, not solely dictated by immediate market forces. The resulting rigidity within the system dampens economic dynamism and stifles social mobility.”
The second scenario is Oceans, in which “Influence stretches far and … power is devolved, competing interests are accommodated and compromise is king. Economic productivity surges on a huge wave of reforms, yet social cohesion is sometimes eroded and politics destabilized. This causes much secondary policy development to stagnate, giving immediate market forces greater prominence.”
Both new lenses recognize the “Better defined and significantly challenged ecological boundaries, including pressures arising from the water-energy-food Stress Nexus, as each component experiences supply/demand tightness.” Demand for all of these is projected to increase by 40-50 percent by the year 2030.
Clearly the authors have their biases, praising China, India and Brazil for their robust growth and for “following a Room to Maneuver pathway,” while chiding Europe for their stagnation, as if this could all be reduced to a single dimension of growth.
The Mountains scenario is about top-down command and control, the locking in of incumbent power which “enables established sectors aligned with market forces to unlock resources that require significant capital and new technology.”
Opposition is minimized and social mobility continues to decline. But moderation of growth does reduce energy demand.
“Shale gas and coal bed methane (CBM) enjoy widespread success and grow to form a new ‘gas backbone’ to the global energy system with natural gas tripling and coal doubling by 2060.” The scenario celebrates a “shale revolution,” never mind the fact that studies are now showing the productive life of these gas wells is far shorter than originally claimed. This possibly is, in fact, realized in the Oceans scenario, where, “the great expectations so many held for the development of tight/shale gas and CBM globally are not fully met as developments prove too difficult or economically recoverable volumes too low.”
Replacement of coal with gas and deployment of carbon capture and storage (CCS) have led to moderation of GHG emissions under this scenario. Renewables play a negligible role till beyond 2050. Electric cars gain a 20 percent share by 2040, growing to 40 percent by 2050. CCS “blossoms” to capture 30 percent of carbon by 2050 and 70 percent by 2075. Second generation biofuels begin to contribute negative emissions. Electricity becomes net-zero by 2060.
Yet despite all this, and the quasi-fascist state that this scenario engenders, we still overshoot the current 2 degree Celsius target at mid-century. Overall, carbon emissions in 2070 are about one-third the 2010 level. CO2 eventually comes under control by 2090 at near-zero levels. We might expect things to begin to get back to “normal” at that point, if it weren’t for the fact the CO2 lingers in the air for a long time, on the order of a century or more, though scientists are still debating over exactly how long. The wait could be as long as the next millennium. Some fraction of the carbon is expected to remain indefinitely.
The Oceans scenario is a bit more democratic with more free market activity and more prosperity, punctuated by economic and social reforms. Interestingly, the Eurozone flourishes, while the U.S. economy “is stable but relatively constrained by fierce political polarization around the role of government.” There is a waning of American influence, and a belief in real alternatives to economic globalization begins to spread.
Renewables play a larger role such that by 2060, solar is the largest energy source, eventually reaching 37.7 percent by 2100. But renewables under this scenario are never expected to supply more than 60-70 percent of our energy total, with the rest being provided by a combination of fossil fuels and CCS. By 2100, biofuels account for two-thirds of all liquid transport fuels and 25 percent of all chemical feedstocks are also plant-based.
Oil and coal remain key players, growing by about 50 percent until 2020 and then leveling off. This level of demand for coal and oil, sparked by economic growth, and without support for CCS, leads to GHG emissions that are 25 percent higher than the Mountains scenario. Carbon emissions in 2040 are a full third higher than 2010. As weather impacts take their toll, eventually there is a strong response in the form of additional carbon capture and storage projects. “Carbon capture via bioplastics and the integration of biofuels production with CCS eventually offset all remaining fossil energy CO2 emissions” by the end of the century. The chart shows about 2 GT per year, which compares favorably to 32 GT emitted in 2010.
In the end, both scenarios provide CO2 emissions that remain well above the 2 degree Celsius baseline until they finally cross it at the end of this century. Along the way, Oceans produces as much as twice as much as Mountains during the period from 2060-65.
Clearly a great deal of thought went into these simulations, although there are distinct pro-fossil fuel biases to be found in here and what some might consider an inordinate fondness for CCS. There is also what I would judge to be an under-estimate of the impact of socially driven behavior change, especially as better-informed young people assume positions of responsibility. All that being said though, there is certainly plenty of food for thought here.
RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
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RP Siegel (1952-2021), was an author and inventor who shined a powerful light on numerous environmental and technological topics. His work appeared in TriplePundit, GreenBiz, Justmeans, CSRWire, Sustainable Brands, Grist, Strategy+Business, Mechanical Engineering, Design News, PolicyInnovations, Social Earth, Environmental Science, 3BL Media, ThomasNet, Huffington Post, Eniday, and engineering.com among others . He was the co-author, with Roger Saillant, of Vapor Trails, an adventure novel that shows climate change from a human perspective. RP was a professional engineer - a prolific inventor with 53 patents and President of Rain Mountain LLC a an independent product development group. RP was the winner of the 2015 Abu Dhabi Sustainability Week blogging competition. RP passed away on September 30, 2021. We here at TriplePundit will always be grateful for his insight, wit and hard work.