Energy Ideas Matter!

I wasn’t sure I would have time or the inclination to do today’s Ideas Matter! post because of the Super Tuesday primaries yesterday.  But someone directed me to what may be one of the most important documents ever released by a major energy company.  Every three years or so The Shell Group group of companies produces what it calls "scenarios".  A scenario in this context is an alternative view of the future. A scenario identifies some significant events, main actors and their motivations, and they convey how the world functions.

 Building and using scenarios can help us explore what the future might look like and the likely changes of living in it. Shell has been using scenarios for 30 years. The  audience for these scenarios do not only consist of businesses and governments but all people who are curious by nature, and who are highly motivated to acquire a deeper understanding of the world around them.

Shell’s release of a new scenario is always news worthy on its own, but this scenario is more candid and important than most.  It has received more media coverage in mainstream U.K. and Australian news than it has in the US.  As this Google News Query shows, its been covered in the US but only on a limited niche media way.  This report contains, in clear and direct wording, the acknowledgment of the validity of one of the basic principles of Hubbert’s Peak in the business planning of a major energy company.

Shell traditionally uses its scenarios to prepare for the future without expressing a preference for one over another.  This time however, there is a clear preference.   As Shell CEO Jeroen van der Veer explains in this introduction to the new scenarios, only one of the scenarios produces a desirable future that leaves the earth in relatively better shape for both corporate investors and future generations of humans.  

The two scenarios Shell has produced are called "Scramble" and "Blueprints".  Scramble is described as: "Like an off-road rally through a mountainous desert, it promises excitement and fierce competition. However, the unintended consequence of "more haste" will often be "less speed", and many will crash along the way."  Blueprints, on the other hand, is described as resembling "a cautious ride, with some false starts, on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technological innovation provides the excitement."

Shell breaks with tradition and endorses the Blueprints scenario.  The summary says "… faced with the need to manage climate risk for our investors and our descendants, we believe the Blueprints outcomes provide the best balance between economy, energy, and environment. For a second opinion, we appealed to climate change calculations made at the Massachusetts Institute of Technology. These calculations indicate that a Blueprints world with CO2 capture and storage results in the least amount of climate change, provided emissions of other major manmade greenhouse gases are similarly reduced."

The full report as well as information about how the scenarios are created and what they really mean are available on Shell’s website in the Looking Ahead section.  If you have the time, I would suggest that you reading Jeroen van der Veer’s  full summary at Two Energy Futures before going on to today’s candidates quotes on Energy.

Energy policy and Climate change are inextricably linked.  So these quotes will touch on both issues.  Ideas about energy matter a great deal,  and these are the ideas of one of our current presidential candidates:

 Suppose that climate change is not real, and we do adopt green technologies, which our economy and technology are capable of. Then all we’ve done is given our kids a cleaner world. But suppose that climate change is real and we’ve done nothing. What kind of a planet are we going to pass on to the next generation? It’s real. We’ve got to address it with technology, with cap-and- trade, with capitalist and free enterprise motivation. We can pass on to our children and grandchildren a cleaner, better world.

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[We need to] stop the contamination of our atmosphere. Climate change is real & is taking place. We have now a confluence of two national security requirements. One is to address the issue of climate change, and nuclear power is a very big part of that. And it’s also a requirement to not allow Chavez in Venezuela, Putin in Russia and the president of Iran to dictate world events and use oil as a weapon which would probably further terrorism and endanger this nation’s national security.

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Q: Do you have a problem with Big Oil companies making these huge profits?

A: Sure, I think we all do. And they ought to be reinvesting it. And one of the areas that they ought to be involved in is nuclear power. Nuclear power is safe, nuclear power is green–& does not emit greenhouse gases. Nuclear power is used on Navy ships which have sailed around the world for 60 years without an accident. And of course we ought to be investing in alternate energy sources.

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Q: You said: "Ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality." And after you said that, you acknowledged you might pay a political price for that view. You said:  "My opposition to ethanol obviously would hurt me. But I’ve got to do what I think is right. And if it offends a certain political constituency, I regret it, but there’s really nothing I can do about it."

A: When oil is $15 a barrel, ethanol does not make sense. When oil is $60-plus a barrel, then ethanol does make sense.

Q: So you’ve changed your mind.

A: No, I haven’t. I have adjusted to the realities of the world we live in today.

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"National security depends on energy security. Al-Qaida must revel in the irony that America is effectively helping to fund both sides of the war they caused. As we sacrifice blood and treasure, some of our gas dollars flow to the fanatics who build the bombs, hatch the plots, and carry out attacks on our soldiers and citizens.  The transfer of American wealth to the Middle East helps sustain the conditions on which terrorists prey."

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Oil is often called the lifeblood of our economy-the indispensable commodity that keeps commerce humming and America on the move. But, in today’s world, our dependency on foreign oil and the way we use hydrocarbons is a major strategic vulnerability, a serious threat to our security, our economy and the well being of our planet.

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The burning of oil and other fossil fuels is contributing to the dangerous accumulation of greenhouse gases in the earth’s atmosphere, altering our climate with the potential for major social, economic and political upheaval. The world is already feeling the powerful effects of global warming, and far more dire consequences are predicted if we let the growing deluge of greenhouse gas emissions continue, and wreak havoc with God’s creation. A group of senior retired military officers recently warned about the potential upheaval caused by conflicts over water, arable land and other natural resources under strain from a warming planet. The problem isn’t a Hollywood invention nor is doing something about it a vanity of Cassandra like hysterics. It is a serious and urgent economic, environmental and national security challenge.

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Answering great challenges is nothing new to America. It’s what we do. We built the rockets that took us to the moon not because it was easy but because it was hard. We’ve sent space probes into the distant reaches of the universe. We harnessed nuclear energy, mapped the human genome, created the Internet and pioneered integrated circuits that possess the computing power of Apollo spacecraft on a single silicon chip you can barely see. In twenty years we’ve gone from using this cell phone (SHOW), a $4000 toy for the wealthy, to this cell phone (SHOW), an inexpensive and virtually universal means of communication. We can solve our oil dependence. You can’t sell me on hopelessness. You can’t convince me the problem is insurmountable. I know my country. I know what we’re capable of. We’re capable of unimaginable progress, unmatched prosperity, and vision that sees around the corner of history. We’ve always understood our times, accepted our challenges and made from our opportunities, another better world. My people are Americans. Our time is today. That is the country I ask to lead.

The twentieth century produced massive changes in how we live our lives.  Changes in transportation, manufacturing, communication, and information management and sharing have created a world that would be virtually unrecognizable to someone who died in the late 19th century.  The 21st century will see another massive shift in the way we live our lives.  One of these possible shifts would send a big portion of the world’s population back to a 19th century lifestyle while other shifts will create a future that balances the best of the past with new technology that helps us achieve a stable, sustainable way of life.