Accelerating to net-zero emissions (6:27)

Title: Strategy Day 2021 ‘Accelerating to Net-Zero’

Duration: 6:27 minutes

Description:

How can the world’s energy system change faster to address climate change?

Accessibility script

[Text displayed]

ACCELERATING TO NET-ZERO EMISSIONS WITH BEN VAN BEURDEN SHELL STRATEGY DAY 2021

[Video footage]

Aerial shot of the dutch parliament building with in the background the skyline of The Hague.

The shot Tilts down and is followed by an indoor shot of Ben van Beurden looking out of a window.

An extreme close up of Ben’s eye showing a reflection of a wind turbine.

[Voice of Ben]

The way the world produces and uses energy is visibly changing…

[Text displayed]

Ben van Beurden
CEO, Shell

[Video footage]

Ben takes a step away from the camera and talks to the camera.

[Voice of Ben]

But to meet the most ambitious goal of the Paris Agreement, change needs to happen faster.

[Video footage]

Car is charging in front of a Shell Recharge filling point Man and woman walk around their electrical vehicle to start charging. A cloud sky with a bright sunlight coming through. Followed by a field of solar panels and wind turbines in sea. A mechanic working on a wind turbine, and a young man screwing in a light bulb that goes on.

[Voice of Ben]

Shell is becoming an energy business for the future and it’s playing its part to help drive that change.

[Video footage]

Ben talking to the camera from the office in The Hague.

[Voice of Ben]

Our scenarios help inform our thinking and show how the energy system could transform quicker. 

[Video footage]

A metro station on the inside with tracks on both sides with metros. Followed by an aerial shot of some highways crossing each other with speed up footage of cars driving on the highways. Followed by Geraldine Wessing talking to the camera.

[Voice of Geraldine]

The transition of the world’s energy system is happening while global population is growing

[Text displayed]

Geraldine Wessing
Senior Political Analyst, Shell

[Video footage]

Fast forwarded footage of big groups of people walking in a city and on the Shibuya crossings. Followed by a close up of a smiling young woman looking up to skyscrapers with projected faces on them. On a digital billboard on top of a building 2 children are seen playing with a tablet. Next to them a text says ‘Powering lives’. Another wind turbine is turning around followed by happy people smiling and clapping their hands.

[Voice of Geraldine]

- potentially to 11 billion by the end of the century.

That’s more people requiring more energy for a better quality of life.

[Video footage]

Fast forwarded footage of a busy road with cars.

Ben talking to the camera from the office in The Hague.

[Voice of Ben]

So, the question is… What could this energy system look like?

[Video footage]

A blue sky with in front a large facade of a building. On one side is a wind turbine reflected and ont the other side a smiling woman. A warm sun set behind fast moving clouds. A city view with a big billboard showing a grid of 9 speakers, in the middle frame Mallika start to talk and is zoomed in to a full screen view

[Voice of Mallika]

For the global economy to achieve net-zero carbon dioxide – or CO2 – emissions, electricity - primarily from renewables, as well as hydrogen and biofuels are expected to be important in the future energy system.

[Text displayed]

Mallika Ishwaran

Senior Economist, Shell

[Video footage]

Night scene of city street blurred in the background. In the front is a small billboard with a wind turbine. Next to is a drawing of a globe with H2 underneath it. On the billboard a green field appears. A large landscape with multiple wind turbines. Geraldine talking to the camera.

[Voice of Geraldine]

Shell scenarios explore a range of possible futures, to help make better decisions today, for tomorrow

[Video footage]

Man and woman with hard hats and yellow vests standing in a field of energy towers pointing at one of them. Followed by a wall of screens with graphics and a man passing by. Four Shell co-workers in a red overall walking on a power plant. Geraldine talking to camera.

[Voice of Geraldine]

Our newest scenarios – Waves, Islands and Sky 1.5 - are all on a path towards net-zero CO2 emissions, with energy systems eventually dominated by renewables 

[Video footage]

Geraldine shown from the side, in front of her a graph appears with CO2 emissions. The graph is zoomed in to be full screen and shows how the lines of CO2 emissions drop under the net-zero emissions line for SKY 1.5 followed by the Waves line. Geraldine talking to the camera again.

[Voice of Geraldine]

But the choices society makes will determine how quickly the world moves towards net-zero emissions.

[Video footage]

A forest with a text on it saying ‘Achieving Net-Zero Emissions. Mallika talking to the camera.

[Voice of Mallika]

In the most ambitious scenario, Sky 1.5, the average global temperature rises above, and is then limited to, 1.5˚Celsius above pre-industrial levels before the end of this century.

[Video footage]

A path with on both sides palm trees and over-arching bows. The sun is hitting in from the right side. A fly over on a busy street in a large city with on both side skyscrapers. In the middle cars and metros are driving. A zoom into a forest.

[Voice of Mallika]

This requires the entire world to reach net-zero CO2 emissions by sometime before 2060

[Video footage]

Ben talking to the camera.

[Voice of Ben]

Our scenarios show that leading economies, sectors and companies must act faster for the world to achieve this timeline.

[Video footage]

Shell hydrogen filling point on a Shell retail station. Closeup of Shell pecten against a backdrop of a blue sky. A rooftop with solar panels, camera rising up revealing city scape.

[Voice of Ben]

And we want to be one of those leading companies. Which is why Shell’s target is to become a net-zero emissions energy business by 2050 or sooner.

[Video footage]

Adam Eales talking to camera. Followed by an airport by night with fast forwarded planes driving on the runway. Containership in a harbour being unloaded. Fast train appearing from a tunnel, seen from above. Tilt-shift perspective of a city with train tracks where trains are passing. A facade of an office with people behind the windows working on their desks. Zooming out on a big city seen from above.

[Text displayed]

Adam Eales

Energy Analyst, Shell

[Voice of Adam]

The Sky 1.5 scenario requires energy efficiency improvements of around 50% across the global economy, but more energy will still be needed to meet demand. So, the emerging system needs to address the economic sectors that consume the most energy.

[Video footage]

A car assembly line with a body of a car coming down. On this car the following graph is displayed. It says ‘Industry, energy consumption’, a globe with the word ‘Today’ on it and in a circle around the portion from small to bigger, ‘Bio Energy’. ‘Electricity Renewable’, ‘Coal Fuels’, ‘Electricity Non-Renewable’ and ‘Oil & Gas’. The graph changes the divisions of portions to the following from smallest to bigger ‘’Electricity Non-renewable’, ‘Hydrogen’, Bio-energy’, ‘Coal fuels’, ‘Oil & Gas’ and ‘Electricity Renewable’.

[Voice of Adam]

To get from today’s energy consumption… to a net-zero emissions energy system, Industry will need to shift towards more electricity, primarily from renewables, as well as hydrogen and bioenergy.

[Video footage]

A large billboard above a road shows the following: Transport Energy Consumption. A globe with the word ‘Today’ on it and in a circle around the portion from small to bigger, ‘Coal Fuels’. ‘Electricity Renewable’, ‘Electricity non-renewable, ’Bioenergy fuels’, ‘Oil & Gas’ The latter one is by far the biggest.

Halfway the graph shifts around to the following more equal division from small to bigger ‘Coal Fuels’, Electricity Non-renewable’, Hydrogen’, ‘Bioenergy’, Electricity Renewable', Oil & Gas’.

[Voice of Adam]

Currently in Transport, energy consumption is mostly from oil-based fuels… but the use of hydrogen and biofuels will need to grow, as will electricity - mainly from renewables.

[Video footage]

An office building with a graph displayed on the facade saying: Buildings Energy Consumption. A globe with the word ‘Today’ on it and in a circle around the portion from small to bigger, ‘Coal Fuels’. ‘Electricity Renewable’, ’Bioenergy fuels’, ‘Electricity non-renewable’, ‘Oil & Gas’ The latter one is the biggest.

Halfway the graph shifts around to the following division from small to bigger ‘Oil & Gas’, ‘Bioenergy’, Electricity Non-renewable’, Electricity Renewable’. The latter one is by far the biggest.

[Voice of Adam]

Today, Buildings mostly consume energy from non-renewable sources … in the future they will require electricity mostly from renewables, with some bioenergy.

[Video footage]

A fast forwarded train drives through a cityscape. Geraldine talking to the camera with a drawing of a globe next to her. Circling around the globe is a wind turbine, solar panel, energy post, and factories.

[Voice of Geraldine]

Deep electrification of the global economy is needed to achieve net-zero emissions, which means more than tripling electricity consumption.

[Video footage]

Power grid lines from different angles followed by Mallika talking to the camera. A large solar panel field with a graph displayed on top saying: Power Generation. A globe with the word ‘Today’ on it and in a circle around the portion from small to bigger, ‘Other renewables’. ‘Biomass’, ’Solar’, ‘Oil’ ‘Wind’, ‘Nuclear’, ‘Hydro Electricity’, Natural Gas’ and ‘Coal’.

The graph shifts to an new division from small to bigger ‘Coal’, ‘Other renewables’, ‘Natural Gas’. ‘Hydro Electricity’, ‘Biomass’, ‘Nuclear’, ‘Wind’ and ‘Solar’. The latter two are by far the biggest portions.

[Voice of Mallika]

In power generation, electricity will increasingly come from renewables – primarily wind and solar – as well as some nuclear. Natural gas will continue to play an important role, supporting the transition from coal and compensating for the intermittency of renewables.

[Video footage]

A sea with multiple wind turbines. Followed by Adam talking to the camera. Next to him is a drawing of globe and circling around is a flask and the H2 symbol. The side of a car with the Shell Pecten and the text saying ‘Powered by Shell Hydrogen’. A cargo train driving on the Shell premises.

[Voice of Adam]

Commercial production of biofuels from biomass must ramp up, alongside the production and distribution of hydrogen at scale. 

[Video footage]

Mallika talking to the camera. Next to her is a drawing of globe and circling around is a Forest and the CO2 symbol. Large pipes on a plant, close up of a CO2 pipeline, pumps on site. Zooming out on a forest from above (hearing birds chirping), a road appears with a car driving through the forest.

[Voice of Mallika]

To achieve Sky 1.5, unavoidable emissions are removed from industrial processes, or from the atmosphere, using both technology and nature.

[Video footage]

Geraldine talking to the camera. A billboard along the road shows people walking on city road at night. An extremely busy train platform. A city scape with a billboard in the front show powerlines.

[Voice of Geraldine]

While the energy transition is inevitable, it will proceed at different paces in different places and sectors and with different degrees of turbulence.

[Video footage]

Ben seen from the side talking to a second camera. Zooming in on his face and changing to the view of the camera he is talking to. A view from above on a busy street with yellow cabs. Text showing ‘Generating Shareholder Value’.

[Voice of Ben]

Faster progress needs pioneering leaders in government and businesses to act.

Government policy and greater alignment will also be crucial - country by country, sector by sector with each needing a different approach - to unlock well-directed investment.

[Video footage]

Geraldine talking to the camera. Next to her is a drawing of globe and circling around is a Solar panel, Wind turbine and bag with a leaf and recycling symbol next to it. A wind turbine on sea. Close up of a hand plugging in a charger to an electric vehicle. Close up of Shell recharging symbol. Zooming in on Shell Hydrogen filling station.

[Voice of Geraldine]

We know that the energy transition can only happen if governments and businesses incentivise low and zero-carbon choices and if customers embrace these changes.

[Video footage]

Ben talking to the camera.

[Voice of Ben]

There is no doubt, the transformation of the energy system must move faster to limit global warming.

[Video footage]

A forest with the text ‘Respecting nature’. A solar panel next to a forest cabin. Lights popping on in the cabin. Followed by an indoor shot of 3 kids lying on the floor reading and drawing. A large wind turbine rises above a forest. A fly over on a large solar panel field.

[Voice of Ben]

This is a huge challenge that affects everyone because the world needs energy to improve lives.

And for a healthy planet, this must be cleaner energy.

[Video footage]

Ben talking to the camera.

[Voice of Ben]

Put simply, it is going to take ambitious orchestration of government policy, investment and sector co-operation.

[Video footage]

Close up of Ben’s face. followed by him talking to the camera. Two people looking and pointing at a screen with graphs. people sitting in an audience, A field with powerlines being transformed into a large solar panel field.

[Voice of Ben]

And we believe the world can achieve net-zero CO2 emissions to meet the goal of Paris, if industry, governments and society work together to make the right choices now.

[Video footage]

Close up of Ben’s face. followed by him talking to the camera. A grid of 12 images appearing with people from over the world and different city and nature scenes.

[Voice of Ben]

The energy system must change faster, and change is opportunity. Shell is acting today to be part of this future.

Scenarios overview presented by Jeremy Bentham (20:26)

Title: The Energy Transformation Scenarios presented by Jeremy Bentham

Duration: 20:26 Minutes

The Energy Transformation Scenarios presented by Jeremy Bentham Transcript_20210210

Description:

A short pre recorded film of Jeremy Bentham presenting The Energy Transformation Scenarios as part of The Energy Transformation Scenarios Webinar 09.02.2021

[Background music plays quietly throughout the film]

The sound of Shell mnemonic

[Image]

The Energy Transformation Scenarios Holding Slide with Shell Pecten center top

Three hexagons portraying hands holding a phone in front of a computer screen, a woman in lab glasses (largest surrounded by yellow keyline) and six women warming up in the street before a run. Line drawings and timeline gradient in background.

[Text displays]

The Energy Transformation Scenarios

Presented by Jeremy Bentham, Head of Shell Scenarios

[Text displays]

Text Disclaimer: Uncertainties Ahead text giving context to the Shell Scenarios strategy and highlighting that these are not intended to be projections or forecasts of the future.

[Full screen showing presenter]

[Jeremy Bentham]

Hello, I’m Jeremy and I’m privileged to lead the Shell Scenarios team. I’m also privileged to share a few perspectives with you, so thank you for that.

[Text displays]

Jeremy Bentham’s name and title text overlay

[Full screen showing presenter]

[Jeremy Bentham]

Our job is to help people make wiser decisions about the future in the face of inevitable uncertainties. We try to help decisions become more resilient and more effective by stretching thinking and also focussing it, and we’ve been doing this for about 50 years in the company.

[Image Slide]

Illustrative image showing The Present, The Path and The Future depicted with icons of heads and globes with yellow line thread and hexagon outline.

[Text]

Why scenarios?

Stretch mindsets for better-informed decisions

Help to improve judgment in the face of radical uncertainties

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Now we all know the future isn’t predictable in detail, but neither is it completely random. You can think systematically and apply rigorous analysis to the consequences of different developments, and that sort of insight is really valuable, partially in times like these which are turbulent and complex.

[Full screen showing presenter]

[Jeremy Bentham]

Let’s face it, the pandemic is a global crisis, the recession is a global crisis, and yet we still have to make choices, we still have decisions to make and in fact the English word ‘Crisis’ derives from the Greek word ‘Krisis’ meaning decisions.

[Text displays]

CRISIS AS AN OPPORTUNITY GREEK ‘KRISIS’ MEANS DECISION text overlay with yellow line highlighting text box

[Full screen showing presenter]

[Jeremy Bentham]

Decisions that open up doors to new futures, new ways of thinking, choices that may ultimately transform the global economy and the global energy system. So, I’m hoping to introduce three different ways the future might unfold, and these are born out of three different approaches to recovery from the current circumstances.

[Image Slide]

Illustrative image showing The Energy Transformation Scenarios with various images displayed in hexagons to reflect the scenarios referenced.

[Text displays]

Waves - Wealth First

Islands - Security First

Sky 1.5 - Health First

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Different priorities in the mix, though we have found there are three main priorities that are top of mind for most people. There’s economic recovery, there's the recovery of a sense of security, and there’s also recovery wellbeing in public health. And everybody, all people in all societies would be seeking all three objectives

[Full screen showing presenter]

[Jeremy Bentham]

And yet different circumstances and different values, may lead to different balances in the mix of the way things go forward in the different places.

Let me briefly outline how each of the three scenarios plays out.

[Image Slide]

Full screen image of a wave rolling towards the shore with an outline of hexagons and yellow line outlining parts of the illustration. Images within hexagons are of hands holding a phone in front of a computer screen and skyscrapers with a backdrop of clouds and sky. Text is set within a larger white hexagon superimposed onto the image of the wave.

[Text displays]

Waves: Late but fast decarbonisation

  • Wealth first - repair the economy
  • Surge in energy use and emissions
  • Growing inequality and more frequent and extreme weather events
  • Social pressures; issues intensify
  • Backlash forces rapid policy-driven reductions in fossil fuels
  • 2.3C above pre-industrial levels by the end of the century

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

In our Waves scenario, the dominant priority is to repair the economy. Wealth first. Self-interest is perceived in terms of material prosperity, resilience in terms of economic strength. Because of this focus, economic recovery is relatively rapid but comes with a cost of multiple spikes in infections. We can think of these as waves, on the surface there is an up swelling in economic growth, leading to a surge in the need for energy and fossil fuels and of course then, greenhouse gas emissions. But there are underlying currents that eventually lead to these waves crashing down.

[Full screen showing presenter]

[Jeremy Bentham]

Apparent economic success disguises more deeper issues, inequality grows in the world and within individual economies. People who are hailed as key workers, as heroes in the crisis, still find themselves in precarious and low-income positions. Social discontent grows as a result of this and labour unrest. And also, the public begins to react to more frequent and extreme weather events.

[Image Slide]

Previous slide showing waves crashing towards the shore with the text and images in hexagons is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

The blame for these societal and environmental pressures is placed on the lack of previous action to structural issues like social welfare, like public health, like climate change. So, there is a political and social backlash.

From an energy perspective, this backlash comes in the form of knee jerk rapid policy reductions in the use of fossil fuels.

[Full screen showing presenter]

[Jeremy Bentham]

So, having grown coal and oil demand, peaks in the 2030s and natural gas soon afterwards. Then there is rapid policy driven decline. This means that while in this scenario it's been late to give serious attention to decarbonisation of the economy, once it’s given it moves extremely quickly, where in late but fast decarbonisation, but because it’s late it means that the growth in greenhouse gas emissions in the atmosphere, outstrips what is required to meet the stretched goals of the Paris agreement.

[Image Slide]

Previous slide showing waves crashing towards the shore with the text and images in hexagons is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

So, by the end of the century, global temperature rise is about 2.3 degrees above pre industrial average in contrast to the 1.5 degrees centigrade of the Paris stretched ambition.

[Full screen showing presenter]

[Jeremy Bentham]

The world has to learn to live with those consequences.

Alright, let me take you into a different place now. Let me describe an alternative scenario, our Islands outlook.

[Image Slide]

Full screen image of an island in the middle of an ocean with clouds in the sky. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of a hand against a protective screen of a viewing area and a man helping a boy with the watering can water plants. Text is set within a larger white hexagon superimposed onto the image of the island.

[Text displays]

Islands: Late and slow decarbonisation

  • Security first - growing nationalism
  • Frictions in collaboration and trade
  • Economies stagnate; growth in energy demand stalls
  • Global climate action slows
  • Cleaner technology makes slow progress
  • 2.5C above pre-industrial levels by 2100, and still rising

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Now in Islands, the dominant priority is near term recovery at home. It’s security first. Resilience is understood in terms of autonomy and self-sufficiency. You can think of this as an Islands mentality, a focus that the close to home, the near at hand.

[Full screen showing presenter]

[Jeremy Bentham]

So, these internally focussed efforts have mixed results, some countries do quite well but others fall behind. Poor policy decisions are made, political legitimacy is questioned,

[Image Slide]

Previous slide showing the image of an island in the middle of an ocean with clouds in the sky is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

As nationalism takes hold there are frictions in international collaboration and international trade. So, the economy globally begins to stagnate. In particular, the Paris process for addressing climate change unravels. Nations that are focussed on short term economic outcomes remain dependent on the type of cheap fossil fuels that can fuel their local economy. So global emissions decline only slowly.

[Full screen showing presenter]

[Jeremy Bentham]

So of course more frequent weather events eventually cause disruptions, they cause damage, but blame is placed on others, not absorbed into the domestic politics. Still if technology improvements still ratchet forwards, partly driven, by those countries that see an advantage within that, and this makes cleaner technologies cheaper, so adoption continues more broadly.

[Image Slide]

Previous slide showing the image of an island in the middle of an ocean with clouds in the sky is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

But this trend is too slow to meet the Paris ambitions. We’re in a slow and late decarbonisation scenario. By the end of the century the global temperature rise is 2.5 degrees and still rising slowly.

[Full screen showing presenter]

[Jeremy Bentham]

Let me take you now into a third world, let’s look at what happens if that third priority of Health & Wellbeing emerges strongly.

[Image Slide]

Full screen image of clouds in the sky. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of six women warming up in the street before a run and a woman wearing a mask and apron holding the door of a cafe. Text is set within a larger white hexagon superimposed onto the image of the sky.

[Text displays]

Sky 1.5: Accelerated decarbonisation now

  • Health first - well-being is the priority
  • People proceed cautiously, economies reopen slowly but steadily
  • Recognition of value in alignments
  • Green investment reshapes energy system
  • Deep structural changes lower emissions
  • 1.5C above pre-industrial levels this century, in line with Paris goal

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

In Sky 1.5, these become the dominant priorities. Think of navigating through the sky, through storm clouds, assisted by a confluence of favourable winds. So, after a slow start in opening the economy, people begin to recognise the value of alignments, whether those alignments are intentional or unintentional.

[Full screen showing presenter]

[Jeremy Bentham]

People recognise the value of the collaborative efforts and the healthy competition that has been between international, scientific and medical communities in developing vaccines and approaches to treating people. And those lessons get absorbed more broadly. So, from public health alone, there’s an evolution towards attention to wellbeing more broadly, wellbeing of people, the economy and the whole planet. Resilience is understood in terms of reforming and strengthening those systems and institutions and approaches that have been exposed as being weak by the crisis.

[Image Slide]

Previous slide showing the image of clouds in the sky is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

From an energy perspective, people learn from the success of green policies and green developments. Not only in terms of reducing emissions and protecting the environment but in terms of creating jobs, and so that there is steady recovery in the economy as well.

[Full screen showing presenter]

[Jeremy Bentham]

And most significantly there’s a push for national, domestic and industrial competitiveness around the world. Nations like the United States and China, and technology focussed economies elsewhere in Europe and in Asia, focus on the clean technology arena as an area to build economic success and dominance. A competitive race breaks out amongst those cleaner technology developments. What you see is rapid and deep electrification of the whole economy dominated by growth in the use of renewables like solar and wind. So, coal and oil demand for those peaks in the 2020s with natural gas in the 2030s to early 2040s, and then they go into rapid declining consumption as cleaner technologies are being able to be applied by end users. Liquid and gaseous fuels, however, still remain essential in those parts of the economy that are harder to electrify.

[Image Slide]

Previous slide showing the image of clouds in the sky is brought back on screen.

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Overall, this enables the leading economies to meet goals of net zero emissions by 2050 and overall, the temperature rise is slightly above, but then limited to 1.5 degrees above pre-industrial levels in line with the stretched Paris agreement.

[Full screen showing presenter]

[Jeremy Bentham]

So, these have just been a few highlights from our Waves, Islands and Sky 1.5 scenarios, and you can find out much more details if you look in the publications. But what can we conclude? What are the lessons?

Well, from an energy point of view there are common threads, although the pace of development of these things is different across the scenarios.

[Image slide]

Line graph shows the impact of efficiency improvements compared to gaseous and liquid fuels and animates to illustrate the point Jeremy is making. There is an outline of hexagons and yellow line outlining parts of an illustration overlay.

[Text]

Energy needs will grow, and the system decarbonises

Total final consumption of energy - Sky 1.5 scenario

Impact of efficiency improvements

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Let me point to five different things.

First, there’s significant development in the efficiency of energy use, and there is growth in the consumption of energy as population grows globally and more material prosperity continues to spread. From an efficiency point of view, there’s almost a doubling of the energy service efficiency over the century, meeting in some cases technological limits. And from a consumption point of view, this helps limit overall growth to between 30% and 80% over the century.

Second, there is significant and deep electrification of the economy, driven by the availability of solar, wind and other renewable resources. So, from today’s position of about 20% of end use energy being supplied by electricity, you move to as much as 60% over the course of the century.

Third, in those sectors that are hard to electrify, there is still a need for energy dense, portable, thermal liquid and gaseous fuels, but these progressively decarbonise through the use of biofuels and hydrogen based carriers.

Fourth, demand for crude oil and natural gas is likely to peak, in the next couple of decades and then decline, but that pace of decline, will not be as fast as the underlying rate of depletion from producing reservoirs, so you’ll still need investment into those areas to meet the changing demand for liquid and gaseous fuels.

[Full screen showing presenter]

[Jeremy Bentham]

And then finally, number five, all three scenarios see some mix of the need for emissions removal from the atmosphere, whether technologically, through carbon capture and storage or naturally through reforestation, so other nature solutions”.

[Image overlay]

Line illustration of globe with icons demonstrating CO2 reduction is shown as an overlay on the bottom right hand corner.

[Full screen showing presenter]

[Jeremy Bentham]

So, ultimately, what societies choose during this crisis is going to push towards one type of the scenario or another.

[Image slide]

Graph shows the ipace of decarbonisation between Waves, Island and Sky 1.5.and animates to illustrate the point Jeremy is making. There is an outline of hexagons and yellow line outlining parts of an illustration overlay.

[Text]

Energy needs will grow, and the system decarbonises

The issue is speed

Pace of decarbonisation

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

And those outlooks will be attractive for some people and challenging for others. However, because almost everyone will benefit from avoiding the type of impacts and risks of climate change, then over the long term it’s in the interest of most people, to have a more accelerated decarbonisation, similar to what is described in Sky 1.5.

[Full screen showing presenter]

[Jeremy Bentham]

So, just perhaps it is possible for us to step forward and grasp another lesson. We know that achieving Sky 1.5 will be extremely challenging, but it is still technologically and map economically possible and history has shown that particular actions can accelerate progress.

[Image Slide]

Full screen image of a solar farm with wind turbines in the distance is shown. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of an EV charging connection, a solar farm and electricity pylon. There are three white hexagons which do not have text.

[Text displays]

Lessons from past cities

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

Think of it, 30 years ago it seemed unrealistic to be thinking of a decarbonised power system or decarbonised passenger transport. But now we see that solar and wind can provide large-scale power at net-zero emissions and passenger vehicles can be electrified using that decarbonised power.

[Full screen showing presenter]

[Jeremy Bentham]

So how did this come about from being unrealistic 30 years ago to being seemingly straightforward now. Well progress has its roots in crisis, the oil price spikes in the 1970s and in the early 2000s, in the Fukushima nuclear disaster, in the financial crisis in Asia in the mid 90s and globally in the mid to late 2000s. All these brought considerable change and got the ball rolling. And we have to hope that this can be the case again, today. 

[Image Slide]

Previous slide showing fullscreen image of a solar farm with wind turbines in the distance is brought back on screen There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of an EV charging connection, a solar farm and electricity pylon. There are three white hexagons in which text is animated as Jeremy is speaking at key points.

 [Text displays]

Acton accelerators

Lessons from past crises

Alignment - Policies, sectors, customers

Smart policy rules and incentives

Pioneer leaders

[Video box in bottom right hand corner of screen overlaying image]

[Jeremy Bentham]

What then happens from these crises, you had critical alignments of key players. For example, in California, you had the bringing together of smart policies and incentives from governments supported by businesses and critically, also consumers to bring forward the development and deployment of electric vehicles at scale. It required pioneer governments and pioneer companies to anchor those initial alignments which then grew. And just as with electric vehicles, the same was true in the growing deployment of solar and wind and other renewable power that we have seen around the world. Crisis leading to alignments, underpinned by smart policy and then driven by pioneer companies and governments initially.

[Full screen showing presenter]

[Jeremy Bentham]

So, as we take a big perspective Waves, Islands and Sky 1.5 show different ways the world can unfold, some with paths that miss the Paris agreement objectives but also a way to succeed. Whether we succeed or not depends on the choices that we’re making today, how everyone responds to the crisis. You see, there’s a special thing about humanity, people have the capacity to learn, to learn from each other but also to learn the lessons of the past. Constructive reactions can help build alignments, encourage smart policies and inspire pioneering leaders. So even though the pace of change is undoubtedly challenging, it’s still possible if society accelerates decisively.

History has shown that shocks can galvanise people into action, I hope this will be the case right now.

[Text displays]

HISTORY HAS SHOWN THAT SHOCKS CAN GALVANISE PEOPLE INTO ACTION. I HOPE THIS WILL BE THE CASE RIGHT NOW text overlay with yellow line highlighting text box

Thank you very much

[Image]

Find out more holding slide

Three hexagons portraying hands holding a phone in front of a computer screen, a woman in lab glasses (largest surrounded by yellow keyline) and six women warming up in the street before a run. Line drawings of hexagons and a yellow line highlight part of the illustration. Fifty years of Shell lock up is shown.

[Text displays]

Find out more

www.shell.com/transformationscenarios

#ShellScenarios

Launch webinar with Q&A (58:22)

Title: The Energy Transformation Scenarios presented by Jeremy Bentham and Nick Ravenscroft

Duration: 58:22 Minutes

Description:

The Energy Transformation Scenarios Webinar 09.02.2021 presented by Jeremy Bentham and Nick Ravenscroft, comprises an introduction by Nick Ravenscroft followed by a short-pre-recorded film of Jeremy Bentham presenting The Energy Transformation Scenarios. This is followed by a question-and-answer session with both Jeremy & Nick.

[Image Slide]

Full screen image of a wave rolling towards the shore with text overlay and countdown clock informing attendees how long it will be until the session starts, with the Shell Pecten bottom left.

[Text displays]

Welcome

The Energy Transformation Scenarios

#ShellScenarios

SESSION BEGINS IN: 00MINS 00SECS text overlay with highlighting text box

[Throughout the webinar, the background of the slide holding the picture in picture view with the presenters is of an image of waves rolling towards the shore. Line drawings of hexagons are overlaid in the top third of the background.]

[Full screen showing presenter]

[Nick Ravenscroft]

Well good morning, good afternoon, good evening wherever you are in the world. Thank you very much for joining us here at Shell today for the launch of our latest Scenarios.

[Text displays]

Nick Ravenscroft’s name and title text ‘Shell Spokesperson & Today’s Moderator’ overlay

[Full screen showing presenter]

[Nick Ravenscroft]

My name is Nick Ravenscroft, I’m a former journalist but I now work at Shell and today my job is to put your questions to our Head of Scenarios and that’s Jeremy Bentham, who joins us here. 

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Text displays]

Jeremy Bentham’s name and title text on the left, Nick Ravenscroft’s name and title text overlay on the right

[Nick Ravenscroft]

Jeremy’s Scenarios team is a group of energy experts, political analysts, economists and all round big thinkers, and at Shell, we like to think of them as future gazers, so they’re not predicting the future, but what they are doing is exploring the different possible versions of what that future might be. And in the current context of climate change, they’ve been in the last few months looking around the corners to a route to a low carbon future and trying to anticipate all the possible bumps in all the possible roads which could lead us to those goals in the Paris agreement. Now we’ve been producing scenarios at Shell for half a century. But I think it’s fair to say that these ones are particularly significant. Jeremy has prepared a short presentation, it’s 15 or 20 minutes, just to give you the overall shape of what these Scenarios are that we’re launching today.

But after that, it’s your questions and if you’d like to submit a question, it’s very easy to do that, if you look at the bottom right-hand corner of your screen you should see a yellow question bar. Now we’d encourage you very much to start submitting those questions during Jeremy’s video and you can continue doing so throughout the question-and-answer session, but we’re about to play that video now. Please when it's finished just sit tight because it may be a few moments before Jeremy and I come back on screen.

[The two-camera feed showing both presenters transitions to the start of the film and commences with a full frame slide]

[Background music plays quietly throughout the film]

The sound of Shell mnemonic

[Image]

The Energy Transformation Scenarios holding slide with Shell Pecten centre top

Three hexagons portraying hands holding a phone in front of a computer screen, a woman in lab glasses (largest surrounded by yellow keyline) and six women warming up in the street before a run. Line drawings and timeline gradient in background.

[Text displays]

The Energy Transformation Scenarios

Presented by Jeremy Bentham, Head of Shell Scenarios

[Text displays]

Text Disclaimer: Uncertainties Ahead text giving context to the Shell Scenarios strategy and highlighting that these are not intended to be projections or forecasts of the future.

[Full screen showing presenter]

[Jeremy Bentham]

Hello, I’m Jeremy and I’m privileged to lead the Shell Scenarios team. I’m also privileged to share a few perspectives with you, so thank you for that.

[Text displays]

Jeremy Bentham’s name and title text overlay

[Full screen showing presenter]

[Jeremy Bentham]

Our job is to help people make wiser decisions about the future in the face of inevitable uncertainties. We try to help decisions become more resilient and more effective by stretching thinking and also focussing it, and we’ve been doing this for about 50 years in the company.

[Image Slide]

Illustrative image showing The Present, The Path and The Future depicted with icons of heads and globes with yellow line thread and hexagon outline.

[Text]

Why scenarios?

Stretch mindsets for better-informed decisions

Help to improve judgment in the face of radical uncertainties

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Now we all know the future isn’t predictable in detail, but neither is it completely random. You can think systematically and apply rigorous analysis to the consequences of different developments, and that sort of insight is really valuable, partially in times like these which are turbulent and complex.

[Full screen showing presenter]

[Jeremy Bentham]

Let’s face it, the pandemic is a global crisis, the recession is a global crisis, and yet we still have to make choices, we still have decisions to make and in fact the English word ‘Crisis’ derives from the Greek word ‘Krisis’ meaning decisions.

[Text displays]

CRISIS AS AN OPPORTUNITY GREEK ‘KRISIS’ MEANS DECISION text overlay with yellow line highlighting text box

[Full screen showing presenter]

[Jeremy Bentham]

Decisions that open up doors to new futures, new ways of thinking, choices that may ultimately transform the global economy and the global energy system. So, I’m hoping to introduce three different ways the future might unfold, and these are born out of three different approaches to recovery from the current circumstances.

[Image Slide]

Illustrative image showing The Energy Transformation Scenarios with various images displayed in hexagons to reflect the scenarios referenced.

[Text displays]

Waves - Wealth First

Islands - Security First

Sky 1.5 - Health First

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Different priorities in the mix, though we have found there are three main priorities that are top of mind for most people. There’s economic recovery, there's the recovery of a sense of security, and there’s also recovery wellbeing in public health. And everybody, all people in all societies would be seeking all three objectives

[Full screen showing presenter]

[Jeremy Bentham]

And yet different circumstances and different values, may lead to different balances in the mix of the way things go forward in the different places.

Let me briefly outline how each of the three scenarios plays out.

[Image Slide]

Full screen image of a wave rolling towards the shore with an outline of hexagons and yellow line outlining parts of the illustration. Images within hexagons are of hands holding a phone in front of a computer screen and skyscrapers with a backdrop of clouds and sky. Text is set within a larger white hexagon superimposed onto the image of the wave.

[Text displays]

Waves: Late but fast decarbonisation

  • Wealth first - repair the economy
  • Surge in energy use and emissions
  • Growing inequality and more frequent and extreme weather events
  • Social pressures; issues intensify
  • Backlash forces rapid policy-driven reductions in fossil fuels
  • 2.3C above pre-industrial levels by the end of the century

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

In our Waves scenario, the dominant priority is to repair the economy. Wealth first. Self-interest is perceived in terms of material prosperity, resilience in terms of economic strength. Because of this focus, economic recovery is relatively rapid but comes with a cost of multiple spikes in infections. We can think of these as waves, on the surface there is an up swelling in economic growth, leading to a surge in the need for energy and fossil fuels and of course then, greenhouse gas emissions. But there are underlying currents that eventually lead to these waves crashing down.

[Full screen showing presenter]

[Jeremy Bentham]

Apparent economic success disguises more deeper issues, inequality grows in the world and within individual economies. People who are hailed as key workers, as heroes in the crisis, still find themselves in precarious and low-income positions. Social discontent grows as a result of this and labour unrest. And also, the public begins to react to more frequent and extreme weather events.

[Image Slide]

Previous slide showing waves crashing towards the shore with the text and images in hexagons is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

The blame for these societal and environmental pressures is placed on the lack of previous action to structural issues like social welfare, like public health, like climate change. So, there is a political and social backlash.

From an energy perspective, this backlash comes in the form of knee jerk rapid policy reductions in the use of fossil fuels.

[Full screen showing presenter]

[Jeremy Bentham]

So, having grown coal and oil demand, peaks in the 2030s and natural gas soon afterwards. Then there is rapid policy driven decline. This means that while in this scenario it's been late to give serious attention to decarbonisation of the economy, once it’s given it moves extremely quickly, where in late but fast decarbonisation, but because it’s late it means that the growth in greenhouse gas emissions in the atmosphere, outstrips what is required to meet the stretched goals of the Paris agreement.

[Image Slide]

Previous slide showing waves crashing towards the shore with the text and images in hexagons is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

So, by the end of the century, global temperature rise is about 2.3 degrees above pre industrial average in contrast to the 1.5 degrees centigrade of the Paris stretched ambition.

[Full screen showing presenter]

[Jeremy Bentham]

The world has to learn to live with those consequences.

Alright, let me take you into a different place now. Let me describe an alternative scenario, our Islands outlook.

[Image Slide]

Full screen image of an island in the middle of an ocean with clouds in the sky. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of a hand against a protective screen of a viewing area and a man helping a boy with the watering can water plants. Text is set within a larger white hexagon superimposed onto the image of the island.

[Text displays]

Islands: Late and slow decarbonisation

  • Security first - growing nationalism
  • Frictions in collaboration and trade
  • Economies stagnate; growth in energy demand stalls
  • Global climate action slows
  • Cleaner technology makes slow progress
  • 2.5C above pre-industrial levels by 2100, and still rising

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Now in Islands, the dominant priority is near term recovery at home. It’s security first. Resilience is understood in terms of autonomy and self-sufficiency. You can think of this as an Islands mentality, a focus that the close to home, the near at hand.

[Full screen showing presenter]

[Jeremy Bentham]

So, these internally focussed efforts have mixed results, some countries do quite well but others fall behind. Poor policy decisions are made, political legitimacy is questioned,

[Image Slide]

Previous slide showing the image of an island in the middle of an ocean with clouds in the sky is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

As nationalism takes hold there are frictions in international collaboration and international trade. So, the economy globally begins to stagnate. In particular, the Paris process for addressing climate change unravels. Nations that are focussed on short term economic outcomes remain dependent on the type of cheap fossil fuels that can fuel their local economy. So global emissions decline only slowly.

[Full screen showing presenter]

[Jeremy Bentham]

So of course, more frequent weather events eventually cause disruptions, they cause damage, but blame is placed on others, not absorbed into the domestic politics. Still if technology improvements still ratchet forwards, partly driven, by those countries that see an advantage within that, and this makes cleaner technologies cheaper, so adoption continues more broadly.

[Image Slide]

Previous slide showing the image of an island in the middle of an ocean with clouds in the sky is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

But this trend is too slow to meet the Paris ambitions. We’re in a slow and late decarbonisation scenario. By the end of the century the global temperature rise is 2.5 degrees and still rising slowly.

[Full screen showing presenter]

[Jeremy Bentham]

Let me take you now into a third world, let’s look at what happens if that third priority of Health & Wellbeing emerges strongly.

[Image Slide]

Full screen image of clouds in the sky. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of six women warming up in the street before a run and a woman wearing a mask and apron holding the door of a cafe. Text is set within a larger white hexagon superimposed onto the image of the sky.

[Text displays]

Sky 1.5: Accelerated decarbonisation now

  • Health first - well-being is the priority
  • People proceed cautiously, economies reopen slowly but steadily
  • Recognition of value in alignments
  • Green investment reshapes energy system
  • Deep structural changes lower emissions
  • 1.5C above pre-industrial levels this century, in line with Paris goal

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

In Sky 1.5, these become the dominant priorities. Think of navigating through the sky, through storm clouds, assisted by a confluence of favourable winds. So, after a slow start in opening the economy, people begin to recognise the value of alignments, whether those alignments are intentional or unintentional.

[Full screen showing presenter]

[Jeremy Bentham]

People recognise the value of the collaborative efforts and the healthy competition that has been between international, scientific and medical communities in developing vaccines and approaches to treating people. And those lessons get absorbed more broadly. So, from public health alone, there’s an evolution towards attention to wellbeing more broadly, wellbeing of people, the economy and the whole planet. Resilience is understood in terms of reforming and strengthening those systems and institutions and approaches that have been exposed as being weak by the crisis.

[Image Slide]

Previous slide showing the image of clouds in the sky is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

From an energy perspective, people learn from the success of green policies and green developments. Not only in terms of reducing emissions and protecting the environment but in terms of creating jobs, and so that there is steady recovery in the economy as well.

[Full screen showing presenter]

[Jeremy Bentham]

And most significantly there’s a push for national, domestic and industrial competitiveness around the world. Nations like the United States and China, and technology focussed economies elsewhere in Europe and in Asia, focus on the clean technology arena as an area to build economic success and dominance. A competitive race breaks out amongst those cleaner technology developments. What you see is rapid and deep electrification of the whole economy dominated by growth in the use of renewables like solar and wind. So, coal and oil demand for those peaks in the 2020s with natural gas in the 2030s to early 2040s, and then they go into rapid declining consumption as cleaner technologies are being able to be applied by end users. Liquid and gaseous fuels, however, still remain essential in those parts of the economy that are harder to electrify.

[Image Slide]

Previous slide showing the image of clouds in the sky is brought back on screen.

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Overall, this enables the leading economies to meet goals of net zero emissions by 2050 and overall, the temperature rise is slightly above, but then limited to 1.5 degrees above pre-industrial levels in line with the stretched Paris agreement.

[Full screen showing presenter]

[Jeremy Bentham]

So, these have just been a few highlights from our Waves, Islands and Sky 1.5 scenarios, and you can find out much more details if you look in the publications. But what can we conclude? What are the lessons?

Well, from an energy point of view there are common threads, although the pace of development of these things is different across the scenarios.

[Image slide]

Line graph shows the impact of efficiency improvements compared to gaseous and liquid fuels and animates to illustrate the point Jeremy is making. There is an outline of hexagons and yellow line outlining parts of an illustration overlay.

[Text]

Energy needs will grow, and the system decarbonises

Total final consumption of energy - Sky 1.5 scenario

Impact of efficiency improvements

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Let me point to five different things.

First, there’s significant development in the efficiency of energy use, and there is growth in the consumption of energy as population grows globally and more material prosperity continues to spread. From an efficiency point of view, there’s almost a doubling of the energy service efficiency over the century, meeting in some cases technological limits. And from a consumption point of view, this helps limit overall growth to between 30% and 80% over the century.

Second, there is significant and deep electrification of the economy, driven by the availability of solar, wind and other renewable resources. So, from today’s position of about 20% of end use energy being supplied by electricity, you move to as much as 60% over the course of the century.

Third, in those sectors that are hard to electrify, there is still a need for energy dense, portable, thermal liquid and gaseous fuels, but these progressively decarbonise through the use of biofuels and hydrogen-based carriers.

Fourth, demand for crude oil and natural gas is likely to peak, in the next couple of decades and then decline, but that pace of decline, will not be as fast as the underlying rate of depletion from producing reservoirs, so you’ll still need investment into those areas to meet the changing demand for liquid and gaseous fuels.

[Full screen showing presenter]

[Jeremy Bentham]

And then finally, number five, all three scenarios see some mix of the need for emissions removal from the atmosphere, whether technologically, through carbon capture and storage or naturally through reforestation, so other nature solutions”.

[Image overlay]

Line illustration of globe with icons demonstrating CO2 reduction is shown as an overlay on the bottom right-hand corner.

[Full screen showing presenter]

[Jeremy Bentham]

So, ultimately, what societies choose during this crisis is going to push towards one type of the scenario or another.

[Image slide]

Graph shows the pace of decarbonisation between Waves, Island and Sky 1.5.and animates to illustrate the point Jeremy is making. There is an outline of hexagons and yellow line outlining parts of an illustration overlay.

[Text]

Energy needs will grow, and the system decarbonises

The issue is speed

Pace of decarbonisation

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

And those outlooks will be attractive for some people and challenging for others. However, because almost everyone will benefit from avoiding the type of impacts and risks of climate change, then over the long term it’s in the interest of most people, to have a more accelerated decarbonisation, similar to what is described in Sky 1.5.

[Full screen showing presenter]

[Jeremy Bentham]

So, just perhaps it is possible for us to step forward and grasp another lesson. We know that achieving Sky 1.5 will be extremely challenging, but it is still technologically and map economically possible and history has shown that particular actions can accelerate progress.

[Image Slide]

Full screen image of a solar farm with wind turbines in the distance is shown. There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of an EV charging connection, a solar farm and electricity pylon. There are three white hexagons which do not have text.

[Text displays]

Lessons from past cities

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

Think of it, 30 years ago it seemed unrealistic to be thinking of a decarbonised power system or decarbonised passenger transport. But now we see that solar and wind can provide large-scale power at net-zero emissions and passenger vehicles can be electrified using that decarbonised power.

[Full screen showing presenter]

[Jeremy Bentham]

So how did this come about from being unrealistic 30 years ago to being seemingly straightforward now. Well progress has its roots in crisis, the oil price spikes in the 1970s and in the early 2000s, in the Fukushima nuclear disaster, in the financial crisis in Asia in the mid 90s and globally in the mid to late 2000s. All these brought considerable change and got the ball rolling. And we have to hope that this can be the case again, today. 

[Image Slide]

Previous slide showing full screen image of a solar farm with wind turbines in the distance is brought back on screen There is an outline of hexagons and yellow line outlining parts of an illustration overlay. Images within hexagons are of an EV charging connection, a solar farm and electricity pylon. There are three white hexagons in which text is animated as Jeremy is speaking at key points.

 [Text displays]

Acton accelerators

Lessons from past crises

Alignment - Policies, sectors, customers

Smart policy rules and incentives

Pioneer leaders

[Video box in bottom right-hand corner of screen overlaying image]

[Jeremy Bentham]

What then happens from these crises, you had critical alignments of key players. For example, in California, you had the bringing together of smart policies and incentives from governments supported by businesses and critically, also consumers to bring forward the development and deployment of electric vehicles at scale. It required pioneer governments and pioneer companies to anchor those initial alignments which then grew. And just as with electric vehicles, the same was true in the growing deployment of solar and wind and other renewable power that we have seen around the world. Crisis leading to alignments, underpinned by smart policy and then driven by pioneer companies and governments initially.

[Full screen showing presenter]

[Jeremy Bentham]

So, as we take a big perspective Waves, Islands and Sky 1.5 show different ways the world can unfold, some with paths that miss the Paris agreement objectives but also a way to succeed. Whether we succeed or not depends on the choices that we’re making today, how everyone responds to the crisis. You see, there’s a special thing about humanity, people have the capacity to learn, to learn from each other but also to learn the lessons of the past. Constructive reactions can help build alignments, encourage smart policies and inspire pioneering leaders. So even though the pace of change is undoubtedly challenging, it’s still possible if society accelerates decisively.

History has shown that shocks can galvanise people into action, I hope this will be the case right now.

[Text displays]

HISTORY HAS SHOWN THAT SHOCKS CAN GALVANISE PEOPLE INTO ACTION. I HOPE THIS WILL BE THE CASE RIGHT NOW text overlay with yellow line highlighting text box

Thank you very much

[Image]

Find out more holding slide

Three hexagons portraying hands holding a phone in front of a computer screen, a woman in lab glasses (largest surrounded by yellow keyline) and six women warming up in the street before a run. Line drawings of hexagons and a yellow line highlight part of the illustration. Fifty years of Shell lock up is shown.

[Text displays]

Find out more

www.shell.com/transormationscenarios

#ShellScenarios

[Image]

The Energy Transformation Scenarios holding slide with Shell Pecten bottom left

Three hexagons portraying hands holding a phone in front of a computer screen, a woman in lab glasses and six women warming up in the street before a run animates. Line drawings and timeline gradient in background. Line drawings of hexagons and a yellow line highlight part of the illustration. Fifty years of Shell lock up is shown.

[Text displays]

Q&A

THE ENERGY TRANSFORMATION SCENARIOS

#ShellScenarios

[Full screen showing presenter]

[Nick Ravenscroft]

Ok, well now we’ve come to the part of the webinar where it’s your questions being put to Jeremy and we’ve already got some pretty interesting ones, but please do carry on submitting your questions.

[Text displays]

Nick Ravenscroft’s name and title text ‘Shell Spokesperson & Today’s Moderator’ overlay

[Full screen showing presenter]

[Nick Ravenscroft]

Just a reminder of the way to do that, if you look at the bottom right-hand corner of your screen you’ll see a yellow question bar, so get your questions in now, we want to have as many as possible and pick the best ones and have an opportunity to discuss them.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Text displays]

Jeremy Bentham’s name and title text on the left, Nick Ravenscroft’s name and title text overlay on the right

[Nick Ravenscroft]

So Jeremy congratulations, it’s a really rich and textured piece of work. During the research and the analysis was there anything that really surprised you, or confounded your expectations?

[Full screen showing presenter]

[Jeremy Bentham]

Well thank you for the question. Yes, I think so because the work initially was confirming the kind of technological outlooks that we published back in 2016 with a better life, with a healthy planet and also the necessary pace of change in Sky Scenario from 2018. But indeed, in looking at how you could get the system to work, to get going more quickly along a Sky type route, that lesson of crises as being a route that galvanises people into action and can bring those alignments smart policies about recovery and also the stepping up of particular pioneer leaders was wonderful to understand better in history and to recognise that could happen again.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

All of the outlooks anticipate that in the next decade the worlds is going to use more energy than now, but some people insist that there are going to be energy efficiency improvements that are going to reduce the need for energy, so how does that work out, what about energy efficiency putting a dent in energy demand.

[Full screen showing presenter]

[Jeremy Bentham]

I think you saw from some of the charts that energy efficiency is incredibly significant and has a huge impact on moderating demand. Indeed, there is plenty of scope for energy efficiency, if we look for instance at a mature industrialised economy such as in North America, you’re using there about 300 gigajoules per person per year of energy, whereas in similarly mature economies such as Europe and Japan, you’re using about 150. So, it's actually the structure of the economy and the structure of the urban environment that has a big impact as well as end use efficiencies. So, we study carefully each sector, think about how end use efficiency could continue to progress, such as with the transfer from old fashioned lighting into LED lighting, but also things like urban policy and how that can make more compact integrated urban developments. But there are lots of different factors to take into account in assessing overall efficiency. At the same time, you’ve got a century which from now will probably see a 40% increase in global population and the need of spreading prosperity more widely in the world, so the pressures on the need for energy services are very, very strong as well.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

So look we’ve got one comment which has come in from a viewer which I’d like to get your thoughts on Jeremy, and this viewer says Waves and Islands sound plausible, just reading the text here, Sky 1.5 seems more aspirational. It goes on, I can imagine that we will see all three scenarios unfolding simultaneously in the world but countries will choose to go one route or another and they might change that route in line with the political cycles so it could be a lot more messy and therefore could lead to an even poorer outcome. What are your thoughts on that?

[Full screen showing presenter]

[Jeremy Bentham]

I think it will be turbulent, because indeed you are seeing the evidence of choices that you can match against each scenario currently and that’s one of the reasons why we develop Scenarios, to help understand what the boundaries of possibilities are, what the choices that we as a Company need to make, need to be in those circumstances. But indeed, each of the scenarios is plausible with Sky 1.5 also having the aspiration, a target of reaching the goals of the stretched Paris agreement. What I would say is that when we published Sky in 2018, my big question is what could get that accelerated decarbonisation going and what we’ve seen is between 2018 and 2020, the world wasn’t moving at the pace necessary for Sky. However, we have been through a very troubling crises and that lesson that crises can create the circumstances for accelerating change have actually for me, made Sky 1.5 more plausible now then it would have been if we’d published it in 2018.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

So, a terrible twelve months but a silver lining. Ok, that’s interesting, we’ve got more comments coming in, anybody watching, please continue to submit questions, bottom right-hand corner of your screen is the yellow question bar. The next one for you Jeremy, one of our viewers asks both 2.3 and 2.5 degrees seem low given the stories in Waves and in Islands, could Waves lead to new innovations in energy production and green tech, therefore to a rapid decarbonisation. 

[Full screen showing presenter]

[Jeremy Bentham]

Well, I think you will see in Waves that it is a very, very fast decarbonisation once it gets going. Partly that's because it takes another decade, decade and a half to get going there's more time than for the kinds of innovative developments to progress further as well. So that’s significant that innovation continues in all Scenarios, but of course innovation isn’t just about pure science, it's about the innovative policies required to deploy those more broadly. So, there's a lot of facets within that and something else that is useful I think for people to recognise is simply the scale of the energy system. So, we’ve done previous research that was published in nature that shows that typically even when something takes off rapidly because it’s commercially and technically possible and maybe growing at 25% globally per year, which is a huge pace of growth, even at that growth rate, it takes 30 years for something to meet 1% of global energy needs because of the simple size of the system. So, there are time scales in big infrastructures and big systems like the energy system, that mean fast is 2-3 decades is very very fast. 

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Excellent, so look we’re getting questions more about the political context, this is a recurring theme unsurprisingly. Next question Jeremy, what is the role of, and how effective is government in catalysing these different scenarios. Do you envisage technology evolving faster than government can respond, and thus democratising progress?

[Full screen showing presenter]

[Jeremy Bentham]

It’s a complicated two-part question, I’ll start at the beginning and maybe you’ll need to come back for the second part there. Just a reminder for folks, some folks will go into a breakout room after this presentation and be able to talk to some of our political and economic specialists as well there. What we’ve found is governments play a very, very important role, not in isolation of course because they’re also responding to the inputs from the rest of society from civilians, from citizens, from businesses, but you see the pattern that frames for policy are created by government that businesses and citizens respond to and so there is an iterative process that goes on there but it's very important to have those frames. So, for example, in the initial development of cleaner technologies, it's important to be investing, to support R&D, research and development and that’s one particular type of policy.

When something has become developed enough that it can be deployed, but it’s still expensive to deploy, then at that stage you need the types of policies for instance with solar and wind, feed in tariffs helped grow that deployment, that drove down costs due to mass manufacture and further technological developments and then later when things had reached certain cost thresholds, they can be diffused further through the economy through policies like carbon pricing and so, smart policies and policy sequencing is very important and the only legitimate way to have that is via the government legislative process.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

To get to the second part of that question but the system has removed it, but what I think it was asking is, is technology going to evolve more quickly then government can respond and as a result will progress be democratised? I think that was the broad thrust of it. Just a few quick thoughts on that.

[Full screen showing presenter]

[Jeremy Bentham]

Few quick thoughts, I mean it’s a question less of government I think but of society, because government is in one sense, the collective brain of society. And so, we have seen that possibility and it is where those alignments we have spoken about become important. Now some of those alignments are intentional, they are deliberate but often they occur as a result of different agents in society responding to similar pressures and then finding themselves aligned. So the timing and encouraging those alignments is very important. For a company, for example, like Shell, encouraging sectoral alignments between, an example would be the Global Maritime Council where you can have not only ship operators, ship builders but ports, fuel suppliers like Shell actually finding common ground and covisioning what could be a lower carbon future for marine. So those alignments become very, very important in society to try and accelerate, to take advantage of those technical developments which otherwise would remain limited in their application.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

We’ve got plenty of questions coming in. Comment from one viewer here who says if I look on the most ambitious Scenario it looks to be far behind the green deal of the European Union, how does this fit, is the question.

[Full screen showing presenter]

[Jeremy Bentham]

Actually, we published in March last year a Europe climate neutral by 2050, which has been helpful within the European commission and in our discussions with them about this and so those kinds of developments are actually factored into how the European green deal is progressing as well, and what you find of course is that leading societies on decarbonisation will decarbonise as quickly as they can, and we see an increasing number of ambitions expressed towards decarbonising by 2050 and indeed a company like our own is speaking of being a net-zero emissions company by 2050. But there will be some lagging there, so the world overall will take a little longer, but still if you are able to follow that accelerated pathway in Sky 1.5, you are able to limit global climate change to 1.5 degrees by the end of the century.  

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Ok, another good question here, this viewer points out that your team Jeremy sits within an oil and gas company and therefore, doesn’t this inevitably limit discussion and exploration of scenarios that could be quite unfavourable to a firm like Shell? It’s a fair question.

[Full screen showing presenter]

[Jeremy Bentham]

It is a fair question and indeed, first of all I laugh because I don’t actually think of Shell as an oil and gas company, I think of it as an energy service provider to 30 million retail customers every day and many, many businesses and indeed, much of that service currently is because the end use needs are for oil and gas, so oil and gas is still a major part of that, although we are one of the biggest renewable energy traders in North America for example, electricity trading and things like that. But it is a fair point and I’d like to point out that my role is to speak truth to power, to our executive committee and board so they’re able to be stretched in their thinking to be able to not just consider the extension of what is done today, but to consider what is good for society, and hence good for business over the longer term as well. Some years ago, the head of our human relations in the company told me that I’m a senior executive in the company but in the senior executive grouping, I was tolerated but not embraced, and I feel that was the right position for somebody like myself. I have to be part of leading a team within the core strategy area of the company to stretch that thinking and to challenge that thinking.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Good to think of you Jeremy as an irritant for the top brass of the Company. But look, you mentioned the executive committee, we have a number of questions coming in about Shell strategy which the executive committee are setting, investment in oil and gas and all those kinds of things. You’ll be aware that later this week, on Thursday we’ve got our annual strategy day so we can share more information about the company's decisions for the future. In the light of that, can you talk about how the Scenarios are used in Shell, I know you said you speak about truth to power and that’s one of your roles, but for example is Shell going to favour one of these Scenarios, for example the Sky 1.5 Scenario in its future investment policies, is that how it’s going to work?

 

[Full screen showing presenter]

[Jeremy Bentham]

Well, I think that, and hope people really do pay attention to the strategy announcements that are coming on Thursday and this type of work that I’ve been discussing has been the thinking that has helped set the context for making the choices the Company is making. As I mentioned, I’m privileged to be part of the strategy leadership team of the Company and we have to take choices in the light of the all the different possibilities I’ve mentioned, but our CEO has been quite clear that for global society in general terms the accelerated decarbonisation route is preferred, and so we can really only serve what our customers are demanding and needing, so we can only do that, but we can also help encourage customers along their pathway to cleaner technology use and decarbonisation as well. So, it’s a mixed thing, for quite some time people are going to need liquid and gaseous fuels, they need those kinds of portable, thermal, molecular fuels and at this time the bulk of those are oil and gas and so there will need to be continued investment in those areas, but there is also the pathway towards deeper electrification of the economy that are featured in the Scenario outlook. There’s also the pathway towards the decarbonisation of fuels, liquid fuels through bio-fuels for example, gaseous fuels through hydrogen or hydrogen-based carriers and so there’s a lot of significance in really, really being able to be close to end use, close to customers and collectively developing that kind of decarbonised future that benefits everybody.

 

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Look I can see from the clock that we have got just under quarter of an hour left. Still got plenty of time for your questions but keep submitting them please, bottom right hand corner of the screen is the yellow question bar.

Having looked at the bigger context, let’s get back into the detail of some of the Scenarios Jeremy because one of the questions that’s come in asks do both Waves and Islands assume that national success is measured in GDP growth rather than in evolving to a new metric?

[Full screen showing presenter]

[Jeremy Bentham]

It’s a very interesting point and I hope that people are able to take a look at the publication that we have put on the web, the booklet itself because it has actually a box on GDP growth, and a number of quotes there such as the quote from Bobby Kennedy about GDP measuring everything apart from what’s really important to us. And so, there is of course a movement in the world to try and broaden the metrics. And you have seen that over time with the human development index from the United Nations, and you can see also the focus that the United Nations has placed on the sustainable development goals and having individual goals on each of these areas. So, it’s not true that it’s the only metric in the world, and neither should it be. Equally, it’s the most accepted metric for productive activity in the world and so there is still value in having that as an indicator I think and hence I tended to express development in GDP type terms. But note, for example in the Waves outlook, surface GDP might be looking very good but we’ve emphasised that that is on the surface of a layered economy and there are currents underneath which are troubling as inequalities grow, as structural institutional development isn’t being given the attention that it should do. So it is a good question and it’s a good area for people to keep thinking about and making progress in better ways we assess the wellbeing of society.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Ok, so another comment here, they write, ‘my sixteen-year-old daughter is watching this webinar with the viewer, with the commentator and is apparently somewhat disturbed by the observation that people and policy only react to a crisis. So, Jeremy, have you been surprised as we’ve come through this global health crisis with COVID that green has actually been put at the heart of the policy agenda, at least very near to the heart of the policy agenda.

[Full screen showing presenter]

[Jeremy Bentham]

Hello there, so it is nice that somebody, a teenager is watching the webinar. I myself, my eldest grandson is a little bit younger, fifteen years old and is interested in these issues as well. If it came across that I was saying people only react to crisis, then that was unfair. What happens is that people can learn, they can learn from each other, they can learn from the past. But, the behavioural economists have told us that one way of thinking of behaviour sometimes is what you see is all there is, so people get locked in a status quo type of thinking, so the thing that crisis can do is actually unfreeze ways of thinking and enable developments to happen at a pace and at a time that wouldn’t happen in that stable course of things, so crisis have a role to play in accelerating and galvanising things as well. But indeed, from that learning, just to give an example, the September 15th 2008, Lehman Brothers collapsed, and we had our recession and recovery scenarios, but people look back at that global financial crisis and have learnt lessons from for example, the American recovery and reinvestment act which has shown that smart investment in cleaner technology, in greener areas was actually very, very important and significant in generating jobs, i.e. restimulating the economy so people have learned from that and I think that’s one of the reasons that you seeing indeed, in various places, stimulus, including stimulus toward cleaner, greener investments.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Ok, so look we’ve got nine and a half minutes left until the end of this part of the presentation, I’ve already reminded you how to submit a question but just a reminder that there are some breakout sessions at the end for those of you who have registered. At the end of this question-and-answer session we will give you the details how to join those.

Next question for you Jeremy, and they ask with these three Scenarios in mind, what signposts do you recommend to keep an eye on towards 2025, so looking maybe at the US and North America or in Europe or maybe in China or Asia more widely. 

[Full screen showing presenter]

[Jeremy Bentham]

So indeed, that’s a good point, so one can look at I think three things, one is the current state of policy and intention now as it's expressed and the current state of deployment of cleaner technologies, that kind of gives you a snapshot starting point. Then you can look at what is happening with policy ambitions, are you seeing indeed stronger decarbonisation ambitions, but also are you seeing evidence of policy nationalism in trade and things like that, which would be a signal to a more Islands type world and thirdly you can follow the surveys of social sentiment as well and we’ve been following, indeed, generating with a surveying firm extra questions to get insight into that area. Just to give you a very brief snapshot of the kinds of things we’re learning from that social area is that the attention to issues related to both if you like, or all of wealth, health and security has increased during the course of COVID. So that kind of validates our sense that those are three useful things to think about when thinking about recovery, it has all increased.

In the period from the beginning of the pandemic through to the mid of it when the last survey was done, there was actually more evidence of Islands type of mentality taking hold, which is something for us to be both aware of and hopefully to resist because over the longer term the Islands type mentality leads to outcomes that most people would find troubling, but we’re still in the mist of the pandemic and the crises can play out in different ways. But I think if you look at those and you look at the policy ambitions in particular areas and social surveys and developments are things to look at, but also the kind of leadership, you think of the recent US election and you had a relatively minor shift in social sentiment, there's still relatively even balance of voters in the US but you’ve got a different leadership now which has placed much more attention on re-joining the Paris climate process, on the types of cleaner technology investments, so leadership plays a role but only in that broader context in society.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

So we’ve been discussing the US just now, Europe and Asia before that. Could you talk a little bit more about the relationships between those big geopolitical entities so you know the USA, Europe, China in each of these scenarios and whether the rest of the world is going to be able to catch up with these big playmakers in the energy transition.

[Full screen showing presenter]

[Jeremy Bentham]

Well, it’s good that you mention there are big playmakers and there’s a handful of actors although ultimately this encompasses all of society. But just in geopolitical terms and there is some deeper analysis of this in the publication that I mentioned, you know the two great economies, the two biggest economies in the world are of course the United States and China and they have been having a troubled relationship over the past few years. But we shouldn’t necessarily just think of these as one-dimensional relationships, it’s a multiplex of relationships in which you can have a confrontation in some areas, you can have cooperation in others, you can have different relationships there and those are seen in the different Scenarios. So in the Island's Scenario, it’s a lot of confrontation around trade and globalisation and global trade is being reduced. Whereas if you look at the Sky 1.5 Scenario you see a recognition actually as both the great economies are looking to take domestic, industrial and technological competitive advantage by advancing clean technologies so they’re getting aligned in those areas, and see the value of supporting processes like the Paris process to give a global context for that and so you’re seeing different elements of that multiplex relationship in the different Scenarios and all of those elements are plausible.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Ok look we are gradually running out of time, we have got one more question, might have time for two but let’s press on. In all of these Scenarios climate change gets far worse, well beyond what the climate emergency position proposes to be unsustainable, is this a conclusion that what Greta Thunberg wants, will not or cannot take place.

[Full screen showing presenter]

[Jeremy Bentham]

Well I think that the boundary that the real scientific experts have noted is that the stretched Paris ambition of one and a half degrees and Sky 1.5 meets that boundary by the end of the century and so that’s kind of a positive optimistic message that can be done but it takes a huge amount to do that. Let me just put that into context, we’re currently at just about 1.2 degrees above the pre-industrial average. So 1.2, that leaves us with about 0.3 left towards that 1.5 and at current rate of emissions we’re actually increasing that temperature by 0.2 degrees every decade. So that would say there’s a decade and a half, there is 15 years left to hit that limit and if you think of any for instance new car coming on the road today somewhere in the world, somebody in the world is going to be driving that car still probably in 15 year’s time, you know we’re at that level of being close to those limits and it’s why the work of the IPCC, the Intergovernmental Panel on Climate Change, which looks at mathematically plausible and other plausible routes towards decarbonising in future has a number of routes like Sky 1.5 which are overshoot routes, which say you actually go above 1.5 degrees a little and then through being able to draw down greenhouse gas emissions from the atmosphere can bring that back down to the 1.5 degrees as well. The important thing is that for limiting the impact of greenhouse gas emissions, it requires really, really deep acceleration now and taking those choices now.

[The view shifts to a two-camera feed showing Jeremy Bentham on the left with Nick Ravenscroft on the right]

[Nick Ravenscroft]

Ok, Jeremy thank you very much, that was a fascinating discussion.

[Full screen showing presenter]

[Nick Ravenscroft]

So, as I was saying earlier, this part of the presentation is now finished but some of you have registered to join the breakout sessions. If so, please stay online, you’ll be automatically redirected to the breakout room in Microsoft Teams and those sessions will start in about five minutes. If you want more information on the scenarios, go to the website. I’ll give you the address now www.shell.com/transformationscenarios, that’s /transformationscenarios. Other then that, thank you very much for watching, I hope you found it interesting and illuminating and enjoyable, but from Jeremy and from me, thank you very much and goodbye.

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