Shell announced record profits in the first week of February at a press conferences in London. Journalist David Strahan (producer of the seminal BBC Money Programme on ‘peak oil’ theory back in 2000) asked CEO Jeroen van der Veer whether Shell had done any detailed modelling on peak oil. Mr. van der Veer replied that his argument was that the world will not arrive at a peak oil situation. He said that peak oil is correct as applied to regional areas of production but does not apply to the world as a whole. Mr. van Der Veer’s justification for this statement was that an unquantifiable level of reserves lie in unconventional oil, and tellingly, coal. Shell is explicitly stating then that the mitigation strategy in the face of a peak of conventional oil will ultimately lie in coal liquifaction. Jeremy Leggett has argued that “amid the ruins of the old energy modus operandi many will try to turn to coal, and so the extent to which renewable energy grows explosively instead of coal expansion, rather than alongside it, will determine whether economies and ecosystems can survive the global warming threat…’Solarisation’ versus ‘coalification’”. Shell have admitted to a conventional oil peak and have announced a mitigation strategy which bodes ill for the future of climate change.

Van der Veers said “That is a great question - it is much more complex than many people think. That (peak oil) is not how we will go. Because peak oil theory itself is correct, if one takes easy oil close to the markets. If you look at West Texas the oil has gone, or even the North Sea…but if you look at oil sands you don’t know where the peak will come…if you think about coal…there are huge reserves. If you assume we can develop clean coal technologies, [then] there will not be one peak.”
“So there is no one peak. There will be many peaks [for different fields, regions and fuels] and they will be in many different time frames and how that will develop, we don’t know. We think [for prices] that it is prudent for our company to evaluate projects in a very [many] differing pricing scenarios.”

Strahan then asked if van der Veer expected oil sands to make up the difference in any decline of conventional oil.

“What I do expect,” replied van der Veer, “is at the present price level there is a huge incentive to develop additional forms of energy, hydrocarbon energy and alternative energies, people will respond but it will take some time.”

Strahan considered van der Veer’s replies.

“His basic argument was that as the peaks happen at different times,” concluded Strahan. “So you get a plateau not a peak. But one is not just adding up a bunch of peaks, you are adding up some areas that are rising in production and some that are falling.”

“[Van der Veer] did say that ‘easy oil has peaked’ but then said ‘look at what is elsewhere like the arctic, deepwater and so on.’ But if you listen to people like PFC

Energy, the Washington based consultancy, they have suggested that deepwater will peak early in the next decade. He also mentioned oil sands but the overall plan for oil sands is to make just 5 million barrels a day by 2030. I must say it was not terribly convincing,” Strahan said.

Source