Has Crisis Changed the Energy Future?
What does the future of energy look like?
Today, Shell released the latest in the series of outlooks it has been writing for the past 40 years known as its “Energy Scenarios.” (See coverage here, here and here.) Shell, sponsor of National Geographic’s Great Energy Challenge initiative, pioneered scenario-writing as a business planning tool. It seeks through storytelling to come up with a decision-making framework that takes into account widely differing paths the world might take. Fast Company looked at the history here. Among other things, the scenarios are credited with helping Shell anticipate the rise of OPEC and the global oil crisis of the 1970s.
The latest installment, called Signals and Signposts, looks at the impact of developments that have shaken the energy world since Shell’s previous scenarios in 2008. It includes Shell’s take on the impact of the global financial crisis, the lack of progress toward a climate treaty, the BP oil spill, the unlocking of shale and other huge unconventional natural gas reserves in North America, and the opening of Iraq to development by international oil companies.
Shell sees global energy demand potentially tripling from 2000 levels to 2050, a trajectory that the company estimates could be curbed either by policy or by economic shock—but only by about 20 percent. Meanwhile, supply is on track to increase just 50 percent, the analysis concludes. It painted the huge projected supply-demand gap as a “zone of uncertainty,” leading either to opportunity or misery. (Shell’s former president, John Hofmeister, clearly was envisioning the latter outcome when made headlines a few weeks back with his prediction that U.S. gas prices would reach $5 a gallon by next year.) The publication also seeks to answer a 2008 analysis of the scenarios by Massachusetts Institute of Technology (pdf) that concluded Shell’s most optimistic scenario for control of greenhouse gases was “not good enough.”
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