Shell Ditches Wind, Solar, and Hydro

thefickler writes "Shell has decided to end its investment in wind, solar and hydro projects because the company does not believe they are financially sound investments. Instead Shell is going to focus on carbon sequestration technologies and biofuels. Not surprisingly, and perhaps unfairly, bloggers have been quick to savage the company: 'Between Shell's decisions to stop its clean energy investments and to increase its debt load to pay for dividends, the company is solidifying an image of corporate greed over corporate responsibility.' Is Shell short sighted, or is it just a company trying to make its way in an uncertain world?"

Comments

Corporate culture

[unlametheweak]

As a company, if they can make more money on oil than on wind, then clearly the shareholders will demand oil. Oil is there bread and butter. I wouldn't expect them to innovate on something that is outside of their corporate culture. Like with the movie and music and software industries; you get innovation and creativity from smaller independent entities, and conservativism from the established entities.

Re:Corporate culture

[theheadlessrabbit]

so the big question becomes: Is Shell an oil company, or an energy company?

while oil is currently very cheep, it's supply is limited to hundreds of years. Renewable energy is expensive now, but it will not run out for a very long time. (billions of years)

to use a car analogy, Shell has gotten off the future express way and is driving down a dead end street. it may be a very long road, but it will come to an end.

Re:Corporate culture

[unlametheweak]

while oil is currently very cheep, it's supply is limited to hundreds of years.

I'm not too sure about that. Regardless however, the equation remains stable: when the supply diminishes then prices increase. It's the paradox of people hunting animals to extinction; the more rare the animal the more money hunters can demand for it until there is no more left.

Oil company's need an excuse to change into generic energy companies. By hook or by crook they'll take the path of least resistance to the highest profit margin (whether it be with oil or solar panels).

Re:Corporate culture

[szundi]

To be more precise, limited to some tens of years... The cheapest kind of oil will be depleted in 10-20 years, your lifetime! :)

Re:Corporate culture

[mike_slashing]

Problem is that in a couple of years they all get fired and governments have to bail them out.. because they have overcapacity and keep working on deprecated industries (c.f today's strike in France, very much motivated by the auto industry). This shareholding story is BS. Today's boss will want to have his money&bonus today and couldn't care less about the company; if they would, they'd be visionaries... and they're not. So following the (stock)market interests may well be the establishment, but it's not an excuse. We should know better by now and should stop tolerating the establishment's behavior.

Re:Corporate culture

[Zocalo]

to use a car analogy, Shell has gotten off the future express way and is driving down a dead end street. it may be a very long road, but it will come to an end.

That's not a very good analogy really. Right now, oil is probably more representative of a highway that comes to an abrupt end in a very dry and barren desert; you know that it's going to end at some point, but you are not 100% sure quite where that it is. Alternative energy is a maze of meandering side roads and dead ends that lie to either side of the high way that represent higher short-term running costs, research that leads to economically or environmentally nonviable solutions, or equally bad dead ends as oil. Some of those roads, however, do lead to the future express way and those are the ones we have to find, but the problem is we don't really have a good map yet.

I'd say Shell has simply decided that, right now, they need to sit out The Recession with what to them at least is a safe and financially sound proposition in the form of biofuels, by getting back onto the dead-end highway for a while. This is really just the same basic strategy being taken by all those other business that have been focusing on their core operating markets recently. At least that way they're still moving and they know that the road remains good for a while yet, and it doesn't preclude them from doing a little more exploring of the side roads later on, and there might even be some better maps by then...

Re:Corporate culture

[rtb61]

In this case, Shell simply decided that's it's marketing campaign of green energy investments was promoting threatening ideas and, generating insufficient advertising benefit. Bio-fuels (starving the third world) and burying pollution underground (at the tax payers expense) were far more profitable and in harsh economic times, knows that the public will be far to worried about keeping their home, feeding their family and panicking about possible medical emergencies, that they would largely ignore the end of the clean green PR=B$. Come on did anybody seriously believe shell was interested in alternative renewable energy beyond a cynical exercise in marketing.

The only source for funds for the development of cheap renewable energy has to be the government, there is no profit in it and the real benefits are the free benefits of a cleaner healthier environment, lower medical costs from a healthier population and of course cheap 'free' energy(beyond initial capital outlay and maintenance).

Re:Corporate culture

[LehiNephi]

You hit on the real reason in your post, even if you didn't realize it. The fact is that wind/solar power is not economically viable right now. It makes little sense for Shell to spend tons of money that it will never recover.

Every project goes through a cost benefit analysis. Shell apparently did the analysis, and the conclusions were that investment in wind and solar are unlikely to pay for themselves, even in the long run. Or, more precisely, investments in wind and solar are unlikely to pay better than investments in oil and gas, even in the long run.

Besides, there's nothing to prevent them from re-entering the market if the economics change.

Re:Corporate culture

[modmans2ndcoming]

Uhhh....

everything is a pollutant when it is present in concentrations such that the current local environment can not deal with them.

Re:Corporate culture

[Lord Kano]

Bio-fuels (starving the third world)

Yeah, it's our fault that the third world is a toilet. We're not the ones who are running the regimes of their oppressive dictators. We're not the ones diverting international aid away from starving people. Yes, production of biofuels makes the cost of some food items increase. But if they'd grow their own fucking food, it wouldn't be an issue.

LK

Re:Corporate culture

[azgard]

The problem is, the economic viability of biofuels is questionable, and carbon sequestration definitely isn't viable from physics.

The problem isn't they chose to kill off technologies which are not promising, the problem is they chose to pursue those that are less energy efficient, if at all (and thus, unless they scam someone, less promising).

They expect they will market them to government or something, rather than solve ecological problems. That's why its wrong.

Re:Corporate culture

[Qzukk]

but is it really that hard to grasp that new technologies allow us to reach deeper (and sideways) for oil that was previously out of reach?

Not at all. After all, there MUST be pirate treasure buried in my backyard. The problem is that nobody's invented good enough metal detection technology to enable me to find it.

Re:Corporate culture

[pixelpusher220]

Oxygen isn't a pollutant either, but in high enough concentrations can be fatal.

Corporate profits are unfortunately something that is shortsighted. What is the *cost* of putting all the extra CO2 into the air? at this exact moment, probably fairly minimal, but over time as we continue the cost may very well be extreme.

The gov't is the leveling factor, by pricing oil artificially higher to encourage a different direction for a better long term result.

Some will say we don't need it, and while there is general scientific consensus that we do, factual evidence is scarce since we're making predictions about the future. By the time actual evidence exists it will be far to late to 'fix' the problem.

Shell probably sees the writing on the wall, their industry is a monopoly on our transportation...switching to electric or other renewables means they will no longer be that monopoly. Its the govt's responsibility to look beyond short term profits and move us to something sustainable.

Re:Corporate culture

[Hatta]

Let me say that firstly, CO2 is not a pollutant, it's a plant fertiliser.

By that definition, cow manure isn't a pollutant either. Just because plants enjoy it doesn't mean it won't cause us problems if there's too much of it.

Re:Corporate culture

[Tanktalus]

less energy efficient != less profitable. When solar, wind, etc., become more profitable than oil, Shell will be clamouring to get back in, don't worry.

I've been saying for years that the only way to get the planet to switch to "green" technologies is to find a way to make the energy derived from them cheaper than the alternatives. Even now, the only reason we're still on coal and natural gas for generation of power is that they're cheaper politically (partially due to being the status quo) than nuclear power.

Re:Corporate culture

[ultranova]

Legally != scientifically. We're preaching to a geek group, which insists on the most factual representation of its topics (most of the time). CO2 is a fertiliser, whether the Supreme Court has seen fit to accept it as such or not. It helps plants grow, thus it definitively is a fertiliser.

As it happens, one of the biggest sources of pollution for waterways is fertilizer. It gets washed from the fields into the water, where it promotes the growth of algae, turning a lake into a stinking pit. And the same happens in coastal areas where ever the conditions don't disperse it fast enough.

Your argument seems to be that something can't be both a fertilizer and a pollutant, which is wrong.

Re:Corporate culture

[Archangel Michael]

So, what you're saying is that interference from the outside cause the problem in the first place, and interference from outside is continuing the problems. And the people of the poor countries (who have ALWAYS been that way) have nothing to do with the situation.

Yes, it is always evil white people's fault. Always!

I'm kind of sick of the people who blame everything on Western Eurpopean culture. It is a fallacy. Japan was nearly wiped out after WWII, practically nuked into the stoneage. And yet they figured out how to crawl out of it in less than one generation. AND they have almost no natural resources.

And yet, we leave places like Afgahnistan alone for twenty years, and the Taliban take over and take a relatively modern nation back to the Stone Age. Yes, that was all Colonialism's fault. Because the Taliban wouldn't have ever taken over if it wasn't for the Russian invasion ...

The problem is, that you can always blame the current problems on something else. Obama is taking the problems of the Bush (who sucked royal eggs IMHO) Admin and REALLY is making them worse. But nobody seems to care because he speaks so eloquently (teleprompter mishaps not withstanding) and has a pretty smile.

It's fusion or bust

[sakdoctor]

Controlled fusion is the next step for our species. We won't know how hard it is except for retrospectively, but we haven't got much time left.

Nobody wants to save energy. There are billions of people on this planet that would like to use half as much energy as an average American, and no amount of wind or solar is going to deliver that.

What the?

[GrpA]

FTA: Since biofuels frequently lead to greater emissions than either diesel or gas,

That's not really true... Using Biodiesel can result in 75% less CO2 emissions, at the exhaust pipe.

Some Biodiesels, eg, based on Coconut oil, are incredibly low on emissions.

People who claim biodiesel releases more CO2 are making an argument industry wide, including the converting of existing land not used for agriculture to produce biofuels.

Which is a little dishonest, because there are other technologies being developed that make use of badly salt-affected land to produce Biofuel. (Algae based production)

These technologies actually improve the situation and make use of land that otherwise cannot be used at all.

GrpA

Nuclear....

[PhantomHarlock]

Compared to anything mentioned, the cleanest form of energy is nuclear power, all factors considered. It's the only thing we should be looking at in the long run as a primary source of power for the grid. Wind and solar are great for local uses but not on a large scale. They are incredibly land intensive for a very small output. A nuclear power plant's physical footprint for the power it generates is practically nil.

People just have to stop equating nuclear power with nuclear weapons, and realizing that modern reactors are far, far safer than reactors from half a century ago. Unfortunately, the United States has lost 30 or 40 years of reactor development time compared to other countries.

As usual, radical environmentalists are their own worst enemy. They advocate alternative energy, and then jump up and down when a new solar installation is built on a fictionally endangered habitat or a wind farm causes migratory bird strikes. You can't have it all ways.

You must find a viable replacement for fossil fuels before eliminating them or taxing them to death. Solar and wind alone are not a viable replacement at that scale.

Re:Neither. They're responsible

[Captain Splendid]

GP says fuck the hippies and gets and Insightful. Parent says fuck the executives and gets a Troll.

Now, I'm down with the hippie hate, but I guess moderators really do like sucking corporate cock.

Re:Neither. They're responsible

[Anonymous Coward]

1. Lets strap all of the environmental whack jobs to bicycles and have them the pedal generators to a cleaner tomorrow.

   Stupidest idea ever. Funny. But not insightful.

2. If those alternative energy sources were even remotely feasible you can be sure they would be all over them.

   Why do you think this? Large companies are conservative and short-sighted. Even "long term" planning is at most 10-15 years. The markets are even more short-sighted and especially stupid. "Shareholders" comprise two groups: long-term investors (e.g., 401k's) that want slow, consistent growth. And then there are the short-term traders. They are either idiots or the scum of the earth. Nobody here is willing to take on a good risk on the 20-30 year horizon.

You shouldn't have such blind faith in the free market. It is darn good at solving short-term problems. But, boom-bust cycles are a counterexample to long-term efficacy of "market value."

CSR

[oldhack]

Corporate Social Responsibility is another one of those dishonest and fraudulent business fads, flaunting secondary goal that often contradict with the primary goal of making money. When push comes to shove, guess which one would prevail. Shell is an oil company, set up to make money in oil business. Criticizing it for not being "socially responsible" (however you define it) is like berating a snake for not acting like a cow.

You want renewable energy, set up monetary incentive for it, and be prepared to pay for it.

No, no, no

[kestasjk]

"[New energy source] or bust" is a very irresponsible thing to say; we need to learn to compromise. But I'll just focus on your particular suggestion of fusion:

• We don't know when it'll be ready: I went to a talk by one of the guys behind the JET reactor and he said 30-40 years before the first commercial reactor
• We don't know how much it'll cost: What use will fusion be if it costs more than current power sources?
• It isn't radiation free: The huge neutron flux it outputs makes the reactor walls highly radioactive, it produces high-level nuclear waste just like any fission plant
• It needs tritium: Yes fusion plants can produce tritium, but this is a long process and means that even once the technology is ready it'll still be a couple of decades before we have enough tritium being generated to start up large numbers of new power plants

Fusion is very promising, if only because it has no proliferation worries, but other than that all of the advantages that count are already available in fission reactors.

• The power is cheap and will scale: Many European countries get the majority of their power from it
• We have plenty of nuclear fuel: There won't ever be a nuclear fuel crisis because before we've used the enrichable uranium ore, and then reprocessed and reused all of the nuclear waste in our breeder reactors, the sun will be dead.
  Think solar is renewable? Not as renewable as nuclear.
• It's safe: If the only reason for not going for it is an accident 30 years ago when the technology was in its infancy that's great
• It's available now: We cannot wait for the perfect power supply. We need to change over now. We've got the fuel, the tech, the experience.
  All we need is for the public to get their heads out of their asses and learn to accept compromise.

Re:No, no, no

[TheTurtlesMoves]

Your comments on fusion are basically spot on --more or less ;)

But your comments on Fission are out by quite a bit. First it is *not* cheap. The new reactors are costing upwards of 5billion and can be higher than 10B. That totally ignores waste management costs that are heavily controlled and fixed by government regulation. There is plenty of nuclear fuel if we reprocess and use Thorium fuel cycles. The US does not reprocess and hence on a pure U based cycle you are looking at a few 100s of years IIRC (so a few 1000s with reprocessing). Even with reprocessing 5 billion years of U fuel is not here- but thats long term planing in the extreme.

Now the "its available now" comes with a caveat. What to do with the waste? Lets at least plan a head a little. We could develop fast reactors and/or accelerators driven reactors to reduce the waste to something quite manageable. But this kind of R&D reactor will come in the 20B+ price bracket with a 10+ year program. Quite similar to Fusion. After than you only know it can work, we still need to build the reactors.

Personally I think we should invest R&D into both. We don't know if they will be economical. But it would be nice to have the option.

Re:No, no, no

[marco.antonio.costa]

You say that 'regulations could decrease this probability (of another accident) by orders of magnitude(...)'. Regulations?! Like SEC regulators that caught Madoff before he could do any real damage with his fraudulent operation? Oh, wait...

People don't create the fail-safe reactor by following guidelines and rules written by politicians who know shit about nuclear physics. They do it because the incentive of being the safest and most marketable reactor will make them a truckload of money!

The only thing regulation does is remove a characteristic of a product from the sphere of market competition and turn it into a standard throughout the industry.

I guess the corporations must like it, its one less thing to be concerned about, but for the rest of us? I don't know. If that's well thought of, great, no harm done, if not, tough luck people, we all blow up at the same time. Did we forget the old adage of 'having all eggs in one basket'?

I don't know where comes this blind faith in 'regulation'. Does _God_ write them?

Re:Two contradictory theories...

[jabithew]

Exactly. Consider their Energy Scenarios study. Essentially, after this study, they asked governments to take the necessary decisions. If you look at what they're doing, they clearly believe that 'scramble' is the scenario we face, and are preparing the company for it.

Shell are a far-sighted company. As with all chemical engineering companies, they need to plan now to build in 5 years, and their plants need to operate at a profit for 20-odd years. The point I'm making is that over time they've become very good at predicting the future.

Re:Neither. They're responsible

[F34nor]

Oh yeah and another thing. Oil companies are not 'energy companies' they are 'resource extraction companies' there's a difference.

This relates to an argument about making furnaces better. The furnace company has very little incentive to make a more efficient furnace because they do not have to pay for the consumables and they make a profit off of parts and service. One idea to make HVAC more efficient is to make vertical monopolies within the industry that provide the server of heating or cooling. If the manufacturer has to pay capital costs and variable reoccurring costs then they will make a machine that lasts forever and uses as little resources per unit of heating or cooling as possible. This is why GM killed the EV because they want you to consume parts and service for the (short) life of the car. If GM gave you the service of having a car and had to pay for gas, parts and service you would have 100mpg cars in 10 years that would last a million miles without service. Don't think a million mile per engine car is possible? Look at the Volvo PS-1800, 2 million miles on single engine made in the 1960s.

Oil companies have generated more super wealthy people on this planet than any other human activity; don't underestimate people's ability to do evil when it comes to trillions of dollars.

Re:Neither. They're responsible

[jabithew]

See, troll. Ad hominem and emotive attacks with little or no factual content.

If the evil oil companies are the ones raping the American people, I'm sure glad no American ever bought any oil related products, or voted for some kind of anti-environment President, otherwise they might be considered partly responsible themselves...oh, wait.

The chemical/energy industries are full of scientists, chemists and engineers. There is more of a green attitude in Shell than there is in Parliament/Congress/any government I can think of.

Re:Neither. They're responsible

[jabithew]

I'm not defending that philosophy at all. I don't know where you got that from.

You're defending the head-in-the-sand philosophy, where people blame 'big oil' because it's easier than taking personal responsibility for the impact one's actions have on the environment.

Oil companies don't destroy the environment and pump oil for shits and giggles, they do it because people are paying them hand-over-fist to do it. People are also willing to forgo legislation to protect the environment to save themselves a few bucks, and then bitch about how the environment is being wrecked.

Yeah, it sucks that Big Oil is ruining the planet man, I wish I could do something about it. What car? This car? No, I need that to drive to my air-conditioned gym.