The oil giant, which is facing calls by shareholders to take stronger action on global warming, has mapped out how the world could hit the 2015 Paris climate agreement target of keeping temperature rises below 2°C.
While development of hydrogen cars has fallen behind the rapid growth in battery-electric vehicles, Shell believes the gas could account for 10 per cent of global energy consumption by the end of the century.
Shell’s Sky scenario envisages that as fossil-fuel use declines, old oil and gas operations will be repurposed for hydrogen storage and transport.
With many carbon-capture projects injecting fluid into the ground, it is an obvious business opportunity for drilling and geological specialists. Shell already has operations in at least three countries.
The Anglo-Dutch oil major has no large-scale hydrogen production but has massive natural gas reserves, from which hydrogen can be made. The company launched its first hydrogen refuelling station in the UK in 2017 and is due to open a second at a service station in Buckinghamshire near London today [Tuesday].
Shell envisages the first intercontinental flight in 2040 and by 2070 a majority of trucks being powered by hydrogen or batteries, as Tesla is planning.
Many power grids would be legally bound to become entirely run off solar, wind and hydropower by 2040, the fossil-fuel dependent firm predicted. But the biggest governmental impact would come from carbon taxes or prices put in place by 2030 across the major economies, it said.
Cutting emissions would not stop global warming and instead carbon dioxide must be sucked out of the atmosphere, Shell argued.
Its document sees oil demand stagnating during the 2020s, followed by gas demand falling rapidly after 2040, as competition from renewables has an impact.
A report by Shell says that by 2060 carbon capture and storage must exceed global emissions to achieve pre-industrial pollution levels.
However, there are currently 50 active carbon capture and storage technology projects with 10,000 needed, Shell said.
Shell may hope the aggressive scenario modelling demonstrates the urgent need for a carbon price.
The oil giant has proposed charging for carbon emissions to foster the type of progress modelled in its report. Financial penalties for pollution would also improve the economics of carbon capture and storage projects, the report said.
Artic drilling “kayaktivists” oppose the Shell Polar Pioneer in 2015. Picture credit: Flickr