We are being prudent during the current downturn and keeping our long-term view. We are intensifying our drive to reduce costs and continuing our work on projects and technologies that the world will need to address the energy challenge. For example, we are continuing to invest steadily in the big long-life projects and in the upgrades of our mature operations that together could increase our oil and natural gas production by 2–3% over the period 2009 to 2012. In 2009, we expect to invest about as much as we did in 2008. Our 2008 investment level was higher than that of all other international oil companies, according to their annual reports. So was our more than $1.2 billion investment in research and development into new technologies that will be needed to produce more energy and cleaner fuels.
We continue to build on our strong position in liquefied natural gas, helping more markets get access to cleaner-burning natural gas (see Cleaner fuel for power). Our LNG capacity increased by a quarter in 2008 and early 2009. We are increasing the availability of advanced transport fuels and lubricants that can help customers improve their fuel efficiency and reduce emissions (see More sustainable transport), and are working to develop a substantial transport biofuels business (see Biofuels). We have also stepped up our call for government policies to address climate change (see Calling for change) and our own work to build our capabilities in carbon capture and storage (CCS) and improve the way we manage the environmental and social impacts of our operations (see Our neighbours).
WHY PROVIDING MORE ENERGY MATTERS
Economic growth and the quality of life in the developed world depend critically on reliable, affordable energy. It drives industrial production and the information economy. Access to it is also vital for lifting people out of poverty. Motorised transport brings people to where the jobs are and goods to market. Electricity is essential for cooling medicines in fridges, making study possible after nightfall, and pumping and cleaning water. Access to electricity also makes use of mobile phones, computers and the Internet possible, allowing people to tap into the world’s knowledge, markets and relationships. It enables communities to reach out, speak out and work with others on common issues of importance to them.
Today, up to 2 billion people lack access to reliable modern energy. The world’s population is expected to grow by another 3 billion by 2050, mostly in areas without access to modern energy today. So when our scenarios, or the International Energy Agency, talk about the need to provide approximately twice as much energy by 2050, what is at stake is the economic growth that is needed to maintain the quality of life in the developed world, and meet the aspirations of billions of new energy users.
WHAT OTHERS SAY
"As Administrator of the US Energy Information Administration from 2002 to 2008, it became clear to me that projected population increases, continued economic growth and rising living standards in emerging economies together present serious long-term energy and environment challenges. Shell has captured those challenges accurately and succinctly in this Report – highlighting the ‘above-ground’ challenges rather than resource constraints. Governments need to work collaboratively to promote efficient energy use and to facilitate the huge investments required to develop all forms of energy in an environmentally responsible way. International and nationally owned energy companies need to make these investments and develop and apply new technologies on an unprecedented scale.”
Guy Caruso
SENIOR ADVISOR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
