in an already very disturbed world. On a scale, this isn’t a Super Biggie, but I consider it bleakly indicative.
The Times of London is reporting that Royal Dutch Shell oil company (Shell) is abandoning its alternative energy plans. This is not a good thing, IMHO, as they intend to focus on oil, gas and biofuels. Well – oil is at or just past peak, gas is not far behind and biofuels are not an optimal method of keeping things going. This refocusing really only means one thing as far as I can see – they have changed their vision of the likelihood of their scenarios.
Last year, a letter came out of Shell, (From: Jeroen van der Veer, Chief Executive, To: All Shell employees, 22 January 2008, Subject: Shell Energy Scenarios)
that said, and I quote:
The first, a scenario we call Scramble, resembles a race through a mountainous desert. Like an off-road rally, it promises excitement and fierce competition. However, the unintended consequence of “more haste” will often be “less speed” and many will crash along the way.
The alternative scenario, called Blueprints, has some false starts and develops like a cautious ride on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technical innovation provides for excitement.
It goes on to discuss their preference for the Blueprints Scenario. And by investing in alternative energy systems, they were investing in the Blueprints Scenario. by abandoning their efforts in alternative energy, the obvious conclusion is they no longer believe the Blueprints Scenario is the likely one, and that the Scramble Scenario is the more likely, and they are positioning themselves for the grinding disaster of such a Scramble. This is NOT good, IMHO.
A Scramble scenario means drastically asymmetric production and distribution of resources – haves and have nots – and Shell is interested in being a “Have”. However, it is clear that as resources tighten and become increasingly difficult to obtain, the trend toward nationalisation of said resources will be necessary by the governments of the nations located on top of these resources, especially if the nation is small. This will only work to the disadvantage of “oil companies” as they are already minority stakeholders in the world oil market with only (IIRC) 17% ownership of energy resources. A Scramble Scenario will pit nation against nation for what lies beneath them, (per Klare) and the ongoing humanitarian disaster in the botched war in Iraq obviously does not serve as a desirable model.
In conclusion, Shell (a company with a long history of brutality) abandoning alternative energy development is a canary in a coal mine moment. These people spend a lot of money developing scenarios and models, and when they decide to shift billions of dollars of research, they don’t do it on a whim. Simply, they are expecting a deeply suboptimal future and are positioning themselves to profit from it. Nice.