Shell Prepares For a World Less Dependent On Motor Fuel

November 28th, 2017 by Fiedler Group

Anticipating a world less dependent on vehicle fuels, Royal Dutch Shell is preparing to shift future revenue to refined oil products and petrochemicals, helping to sustain its century-old oil refining business for the coming decades.

Royal Dutch Shell is planning for the day when demand for oil starts fading as major economies move away from oil and increasingly turn to electric-powered cars, Chief Executive Ben van Beurden commented earlier this month.

Van Beurden’s comments come amid increased focus on the future of the industry following the Paris climate agreement which saw governments commit to tougher action on emissions and need for long-term corporate planning.

Britain pledged this month to ban the sale of new cars and vans using diesel and gasoline starting in 2040 and France announced a similar initiative earlier this month.

Van Beurden appeared to welcome these recent proposals noting that they are necessary in combating global warming, and that Shell is looking at “very aggressive scenarios” as it makes plans to remain competitive in a world that gets more of its energy from renewable sources and less from crude oil, or “liquids,”.

Shell sees viable market growth opportunities for other refined oil products and petrochemicals – noting that there are no economically viable substitutes for asphalt, needed to build roads, or for the polymers and chemicals used to produce plastics for cars, toys and clothes..

Although Shell will be doubling the size of its chemical operations by the mid-2020s, Shell’s Head of Manufacturing, Lori Ryererk noted that “Refining will continue to be part of our portfolio for decades to come. While the peak demand for our products will come, it won’t come for decades. There are still many products that we make for which there is no other alternate at the moment – heavy transport, industrial applications that require high heat.”

Echoing these comments, Van Beurden stressed that although nations are moving away from gasoline and diesel powered vehicles, there will continue to be a great demand for motor fuel for years to come. “As far as oil and gas are concerned, and certainly as far as oil is concerned, you have to bear in mind that if we have a peak and then go into decline, this doesn’t mean that it is game over straight away,” van Beurden said.