Good afternoon... and thanks for joining us.

I’d like to keep this informal today.

I’ll offer a few thoughts on mobility generally – what it means, why it’s critical to the way we live, and why it depends on technologies in energy.

Then I’ll suggest a few ideas about how – and how fast – mobility might evolve.

Finally I’ll share some views on what needs to be done, starting today – on everything from smarter products, to smarter energy use, to smarter infrastructure – to keep the world safe for mobility well into this century.

I’ll keep all that short, because I’m pretty sure you may be interested in asking questions – especially since I’m joined by our new Chief Scientist for Mobility, Dr. Wolfgang Warnecke.

Let me first say that Shell is pleased to sponsor the Michelin Challenge Bibendum for the third time in a row.

Let’s be honest, a big reason why many of us come to Challenge Bibendum is to see the latest and coolest automotive hardware.

Shell, of course, makes fuels, lubricants, bitumen and chemicals – so it’s hard for us to compete on glitz and glamour. But we have brought along a couple of vehicles you really ought to see.

One is a prototype Shell Eco-marathon car built by students.

In less than a week, over 200 cars like this one will compete in the 2011 Shell Eco-marathon Europe event at the Lausitzring race track – about one hour’s drive from here.

Roughly 3,000 students from schools around Europe will compete to see who can design, build and drive the car that can go the furthest on the least amount of fuel. Last year’s winner achieved the equivalent of 4,896 kilometres on one litre of fuel. If you want to be inspired by what the next generation is doing, I invite you to join us there.

We’ve also brought a concept car designed by Gordon Murray. We’d love to take credit for the design, but that belongs to Gordon. What we have done, however, is collaborate with Professor Murray on a new concept lubricant that can deliver as much as a 6.5% fuel economy improvement compared to a standard 10W-30 engine oil.

You can see both of these vehicles, in the flesh, on our stand.


But let’s be clear: mobility is not just about hardware. It’s not even just about transportation. Mobility is about access: the access of human beings to education, to work, to medical care, to resources, to family networks – even to social and political freedom. And it’s about the flow of goods and products to and from factories, markets and customers.

A study first published in 1976 suggests that virtually everyone in the world in every socio-economic strata spends on average roughly the same amount of time each day moving from one place to another – whether village women in a developing country walking by foot to the nearest well for water, suburban parents in a developed country driving their children to sports events, or business people travelling to close international deals.

It is the means of transport – and the distance – that differ.

In most developed countries, mobility accounts for between 6% and 12% of GDP.

In many developing countries, mobility is the key that will unlock economic growth and opportunity.

So mobility should not be confused with the discretionary choices we make about transportation – the second car in our garage, the long weekend trip to Spain in February.

Mobility is actually necessary to our livelihoods as well as our lifestyles.

And mobility depends on energy.

According to the International Energy Agency, road transport alone accounts for approximately 17% of the world’s energy use every year. Adding ships, airplanes and rail transport raises that to 22%.

Most of our customers at Shell use our products to enable some form of mobility – from petrol, diesel, biofuels, bunker oil, avgas, and many other forms of transport fuel, to lubricants that help engines run smoothly and drive trains; from bitumen used to pave roadways and support train tracks to petrochemicals-based plastics that make up 11% of the average new car and are light, helping to improve fuel efficiency.

Shell alone supplies millions of litres of fuel around the world every day. For road transport, this is done through our 43,000 forecourts in 78 countries. Our Aviation business refuels a plane every 12 seconds. And our marine division serves more than 15,000 vessels in over 600 ports.

So as an energy company our business clearly includes helping to deliver mobility to our customers.

The Michelin Challenge Bibendum is at least in part about peering into the future of that business.

Predictions are risky but I will make three with confidence.

First, the demand for mobility will grow. There will be more cars and trucks on the world’s road, perhaps even doubling in number by 2030. Air travel will grow, too. So will shipping.

That growth will be driven in part by an expanding population, in part by economic growth, and in part by a sharp trend toward urbanisation.

Which leads to another safe prediction: that the future of mobility will demand not just more, but more diverse and lower-carbon sources of energy.

Standard petrol and diesel will remain the backbone of the world’s transport fuel portfolio for decades to come. But increasingly they’ll be supplemented by a range of other solutions.

These will include advanced petrol and diesel, biofuels, natural gas, electricity and hydrogen. Carbon capture and storage offers a means of reducing the carbon content of fossil fuels.

This mix of approaches will develop in different ways, in different countries, and along different timelines. Each approach has pros and cons that governments and customers will have to weigh up carefully – climate change or energy security? Cost or performance? Sustainability or convenience?

Which in turn leads to a third prediction: changes to mobility systems some of us have today – ships, trains, planes and automobiles fuelled every day by millions of barrels of fossil fuels transported through hundreds of thousands of miles of pipeline – will depend on managing many chicken and egg dilemmas.

For example, vehicles that run on new fuels can only emerge in conjunction with new fuelling infrastructure; new consumer habits, choices and preferences; new policies that send appropriate price signals into the market; and technical breakthroughs on, for example, sustainable biofuels and clean sources of electricity.

These things demand that car companies, energy companies, city planners, policy makers, consumer groups, advertisers, and research labs must, therefore, work together.

Wolfgang and I will be pleased to address your questions and comments on all these areas in a few moments.

But first I’d like to offer some examples of how Shell is doing its part.

We’re working with a wide variety of partners to tackle the challenge of growing demand for cleaner transport in a three-part approach that we call Smarter Mobility.

Smarter products

The first part is smarter products.

It’s easy to see how vehicles have changed and improved over the last 100 years. It’s not as easy to see how fuels, lubricants and chemicals have evolved.

But they have. At Shell, we started developing better fuel economy formulas as early as the 1920s.

And for energy companies as well as carmakers, the opportunity to improve further – to reduce the amount of energy required to propel a vehicle and to cut its emissions at the same time – still exists.

Our range of smarter products start with biofuels from our sugarcane ethanol joint venture with Cosan in Brazil to our work on next generation biofuels with companies like Virent, Iogen and Codexis. We see biofuels as the most commercially viable way to reduce the CO2 emissions of transport fuels for at least the next decade.

But there are other solutions we think are important to the market today.

For example:

  • Shell FuelSave – the most advanced fuel economy grade formula ever, helping drivers to save one litre of fuel per tank at no extra cost. In two years and across 10 countries, we estimate Shell FuelSave unleaded has saved motorists 480 million litres of fuel;
  • Shell Helix Fuel Economy formula – a fully synthetic lubricant that can improve fuel economy by as much as 2.2%;
  • A packaging solution for Walmart called Ecobox, a cardboard carton with flexible plastic liner which reduces disposal of plastic and residual oil into the waste stream – we earned Walmart’s Sustainability Supplier of the Year award for that one;
  • A range of clean fuels, lubricants and chemicals based on our massive gas-to-liquid project in Qatar. This is a great example of how we can leverage our upstream and downstream capabilities to deliver smarter products to our mobility customers.

Smarter use

The second part of our smarter mobility approach is smarter use.

More efficient and sustainable mobility is at least as much about the choices customers make in the way they use products as it is about the products themselves.

For businesses these tend to be very rational decisions based on objective considerations of cost versus value.

But for individuals these questions involve habits, lifestyles, national culture, convenience, and tolerance for cost.

Sometimes they also boil down simply to having the right knowledge and tools.

At Shell we actively enable ways for customers, partners, governments and our own facilities to “use less and emit less” for mobility. For example, FuelSave Partner is a fuel management solution that can help commercial transport fleet operators save up to 10% on fuel and reduce their fuel-related carbon emissions.

Through our FuelSave Driver Education Programme we’ve trained over 200,000 people in fuel efficient driving practices through face-to-face training, driving simulator online tutorials and challenges to see how far people can go on a single litre of Shell FuelSave.

Smarter infrastructure

Finally, mobility depends not just on the products and use of transport, but also on smarter infrastructure: roads, airports, ports, bridges, tunnels, traffic systems, mass transit, fuel production, supply and distribution, and perhaps above all the design and layout of cities.

By 2050, three-quarters of the world’s 9 billion people will live in cities. All these new city-dwellers will require development equivalent to a new city of one million people every week for the next 30 years.

Already almost 80% of man-made CO2 is emitted from cities.

Recent research puts the cost of development and operation of urban infrastructure at $350 trillion to 2040 – seven times current annual global GDP. Choices made now about how those dollars will be spent will determine how clean, efficient and affordable mobility will be for much of the rest of this century.

Shell is active in a wide range of infrastructure innovation and development for more energy efficient, lower emissions mobility. For example:

  • New bitumen technologies that provide lower cost and lower energy ways to pave the expanding network of roads;
  • Low CO2 electric power generation for use on tomorrow’s smart grids through cleaner and abundant natural gas and carbon capture and storage;
  • Partnerships and coalitions for creating  sustainable biofuels policies and markets;
  • Partnering to understand the possibilities of future electric charging and hydrogen networks;
  • Working with municipalities on better ways to fuel and manage public transit systems.

I think it’s clear – even just from a random walk around Templehof this week, that meeting the smarter mobility challenge will require a coordinated, co-operative approach.

Governments, businesses and consumers will have to work together. Governments can accelerate change through policy that encourages the introduction of new, cleaner, better performing and more available fuels – especially biofuels.

Fuel suppliers can improve the efficiency of fuels and reduce their emissions.

Car makers can develop more fuel efficient vehicles.

Transport consumers can make better choices.

These are the starting points for smarter mobility. I’m proud that Shell is playing a leading role in getting there. And I’m delighted to be part of the collaboration here at Michelin’s Challenge Bibendum.

Thank you... and now Wolfgang and I are

eager to hear what’s on your minds.