Chief Executive Officer Ben Van Beurden is switching from a diesel car to a plug-in hybrid Mercedes-Benz S500e in September, a Shell spokesman said.
Now, it’s not like he’s buying a Nissan Leaf. The S500e gets 24 mpg city, 30 highway – a 2.5-ton, 436-combined-horsepower Benz that can do 0-to-60 in 5.2 seconds. However, a Shell spokesman says Chief Financial Officer Jessica Uhl already drives a BMW i3.
Nor is it like Van Beurden is promising to quit drilling for oil, and he didn’t mention what else is in his garage, but it’s a sign of the dramatic shift ahead of us. Oil companies have made no secret that they think manmade global warming is real and that a move away from fossil fuel and toward clean energy is a given. Industry executives even advised President Trump not to leave the Paris climate accord, to no avail. As the inevitability of this shift – along with slumping oil prices – became evident, Shell two years ago bought BG Group, betting $53 billion that demand for natural gas will rise as the world shifts to cleaner-burning fuels. That deal made it the planet’s second-largest energy company.
“The whole move to electrify the economy, electrify mobility in places like northwest Europe, in the U.S., even in China, is a good thing,” Van Beurden said on Bloomberg TV Tuesday. “We need to be at a much higher degree of electric vehicle penetration — or hydrogen vehicles or gas vehicles — if we want to stay within the 2-degrees Celsius outcome.”
Economists used to think we’d reach peak supply – the world would deplete its oil resources. Now they think we’ll hit peak demand – the point at which oil consumption starts a steep downhill slide and companies like Shell don’t both er to drill for the remaining reserves. Van Beurden offered a guess when that would happen.
“If policies and innovation really work well, I can see liquids peaking in demand in the early 2030s and maybe oil will peak a little bit earlier if there’s a lot of biofuels coming into the mix as well,” Van Beurden said.
Bloomberg New Energy Finance predicts that a third of the world’s cars will be plug-in by 2040 (coincidentally, the date when it looks like new internal-combustion cars will be banned in parts of Europe). That many EVs will cut global oil consumption by about eight million barrels a day, Bloomberg says – or around the total daily oil output of the United States.