Doing the energy maths

In a recent Guardian article, columnist George Monbiot takes on the Governments who have signed and are in the process of bringing the Paris Agreement into force, arguing that their actions are not aligned with limiting warming of the climate system to the extent the agreement requires. The argument presented revolves around the ongoing development of fossil fuel resources.

Like many commentators in this space, the climate maths used is completely aligned with our current knowledge of the science, as presented by the IPCC in their 5th Assessment Report. This maths is a simple subtraction of current cumulative emissions (about 600 billion tonnes of carbon since the start of the Industrial Revolution) from the level which corresponds to 1.5°C (about 750 billion tonnes) or 2°C (about 1 trillion tonnes). That difference, when compared with currently producing coal mines and oil / gas wells argues against developing further such resources as this will take us past the Paris goals, assuming the current mines and wells are produced to depletion.

But this discussion, along with many similar presentations, presents only half the story. As well as recognising the important climate maths, we also have to do the energy maths. This then becomes a more complex narrative, in that it requires both an analysis of current and future energy demand and a view on the expected rate of deployment of a new energy system to replace it. It means meeting demand so as to cater for an increasing population, raising current global living standards and driving economic growth as underpinning realities; i.e. delivering not just the 500 EJ we currently use each year, but the likely 1000 EJ we will collectively use each year later in the century.

George Monbiot places no expectation on the deployment of carbon capture and storage (CCS), which implies that the energy system he proposes must actually be zero emitting so as to limit the accumulation of carbon dioxide in the atmosphere and meet the Paris objectives. But the industrial world we live in is built on processes such as iron ore smelting and cement manufacture, both of which are inherently carbon dioxide emitting. There is also no line of sight to technologies that could replace hydrocarbons in services such as aviation; so we need to be able manage carbon dioxide directly. Deploying carbon capture and storage in the energy system therefore becomes a critical part of the solution set. It can be attached to industrial processes directly or used indirectly to offset the emissions that might come from a source such as aviation.

CCS is a reality today, even though deployment remains limited. The technology isn’t vapour ware as claimed by George Monbiot; in fact it has been proven at scale. One example is the Shell Quest facility in Canada, which was built within budget in just three years after the final investment decision was taken. It has now celebrated a year of operation at design capacity and stored 1 million tonnes of carbon dioxide some 2-3 kilometres down in the Basal Cambrian Sandstone formations found under large parts of Alberta. The issue with CCS is not the technology or the ability to construct a single facility at scale, but the development of a suitable set of economic support mechanisms to support further large scale demonstration and infrastructure development so that CCS can be ready to be deployed as required. That requires real policy work.

Climate science, future energy demand, likely energy system technologies, the reality of CCS and overall energy infrastructure deployment rates are just some of the factors that must be brought together to attempt a full analysis of the climate issue that confronts us. In recent months I have worked with colleagues in the Shell Scenario Team to do just that and we have published a new report which I have posted blogs about a number of times over the summer period.

A better life with a healthy planet: Pathways to net-zero emissions” attempts to answer the tough questions which George Monbiot has rather glossed over. It pictures an energy system that does reach net-zero emissions, even as some fossil fuel production continues, but to meet the demand from sectors such as aviation, shipping, petrochemicals manufacture and heavy industry where renewable energy alternatives either don’t exist or are unlikely to be effective. The solution is more complex than “replacement with renewable energy and low-carbon infrastructure” as suggested by George Monbiot, simply because of the broad range of goods and services that come from oil, gas and coal. An end picture of the emissions outcome is presented in the publication and shown below – sitting alongside this will be an electricity system several time larger than today, largely powered by wind, solar, nuclear, hydro and various other technologies. It is likely to take much of this century to get there.


“The New Lens Scenarios” and “A Better Life with a Healthy Planet” are part of an ongoing process – scenario-building – used in Shell for more than 40 years to challenge executives’ perspectives on the future business environment. We base them on plausible assumptions and quantification, and they are designed to stretch management thinking and even to consider events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes, and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.
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