The future energy landscape

Oil and gas have been the best investments to be made in the energy sector fort he past twenty years. Since 2015 and 2016 a decline in the prices of oil and gas has been set in motion. There’s a shift to investments in  other sources of energy than the traditional sources of coal, oil and gas. The costs of solar energy have declined by 60% in the last six years, as well as the production costs of batteries and windparks.

Fossil fuels remain the most important sources for energy even though other sources are developing rapidly. It is expected that gas will win relative to oil and coal because gas is cleaner and there are better methods available to reduce C02 emissions from gas.

In the next twenty years there will ben eed for twelve million extra barrels of oil per day to meet increasing energy demand. This demand is primarly driven by the chemical industry. Oil usage as a source for car fuel will decline as a result of the develpment of electrical cars and efficiency in the transportation industry. However, the climate targets as agreed upon in the Paris Agreement of 2015 will not be met. There is still growth in the need for oil.

Energy transition. Opportunities fort he Netherlands.

Mrs. Van Loon is president of Shell Netherlands. The theme of her presentation was how Shell will meet the growing worldwide demand for energy whilst reducing the C02 emissions.

According tot he Paris Agreement CO₂ must be reduced by 80-95% in 2050 in relation to CO₂  in 1990. Shell supports this and is making investments in the energy transition such as the development of cleaner fuels (liquefied natural gas is an example).

In the Netherlands the energy transition is about producing cleaner energy and efficient use thereof. From the year 2030 the Netherlands must reduce its energy emissions by 60% to meet the Paris Agreement goals. This means an acceleration by factor 3 to 4 compared tot he current situation, with the main obstacles yet to overcome.

Mitigating climate risks

ExxonMobil produces an energy outlook each year, on the basis of which the company plans its activities. There is an increasing demand for energy. Growth of world population and middle class incomes require more energy while the emissions must be reduced.

The worldwide middle class is about two billion people, half of which live in development countries. It is expected that this middle class wil grow to up to five billion people, primarily in China, India and development countries. This growth means increasing demand for energy. Therefore, petrochemicals, oil and gas will increase. Transitioning from coal to gas will reduce C02 emissions by 60%.

The worldwide energy system is vast and complex. To change this immense system to the Paris goals requires enourmous cpital investments while keeping affordable and reliable energy in the mean time.