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In Good Company: Coal miner’s son Jeremy Bentham of Shell comes clean

Ravi Velloor:Associate Editor: 6 Aug 2017

Top Shell executive talks about the challenges ahead in pursuit of climate-friendly power solutions

There’s a boyishness that springs to life when Jeremy Bentham talks of his die-hard support for Everton Football Club.

It’s a throwback to his early days as the son, grandson and great-grandson of coal miners from Blackpool in north-west England and the time, in 1966, when Everton came back from two goals down to win 3-2 against Sheffield Wednesday in the last 20 minutes of the FA Cup final.

The 100,000-strong stadium crowd included Paul McCartney and John Lennon of The Beatles. England would go on to win the World Cup that year, helped by heroic performances by Alan Ball, the youngest in that squad. Later that year, Ball would transfer from Blackpool to Everton and the Liverpudlian club would gain the lifelong loyalty of the future chief executive of Shell Hydrogen and the current head of Royal Dutch Shell’s Global Business Scenarios team.

The other way to get Mr Bentham animated is to talk about his work.

Meeting him in Singapore recently – he’s been coming here twice a year since 1985 – I jested about that famous line in The Graduate, the Dustin Hoffman-starring hit released a year after Mr Bentham transferred his loyalty to Everton.

Young Ben Craddock, played by Hoffman, is given some solemn career advice from his father’s business partner: “The future, Ben, is in plastics.”

What’s the equivalent of plastic for Shell?

It is not something to be explained in a few sentences and Mr Bentham takes his time as he talks about responding to aspirations expressed globally, such as zero poverty and a sustainable environment. The challenge is to build an energy system that is twice the size it is today to support a decent quality of life for everyone, while ensuring there are net zero emissions and no additional build-up of greenhouse gases.

“The work we’ve done has demonstrated the technical feasibility of that happening,” he says. “But it is more than about energy producers alone. It is about how energy is used in the whole economy, for example how cities are designed… How fast that is done depends on our political and social processes that can either accelerate or impede change.”

There’s no one-size-fits-all solution for this, of course.

From moving light duty city transport to battery-powered electric vehicles, to the differing needs of the aviation and marine industries, and from low temperature group housing to the big building blocks of the economy, such as iron and steel furnaces and petrochemical complexes, the solutions vary.

What does this mean for Shell itself, which profits most from its oil and gas business? Elsewhere, companies such as Coca-Cola are moving from sugared sodas to healthier drinks.

Shell sees itself as an energy services company rather than an oil and gas operation, he explains. While it has a strong base in oil and gas, it also has a deep understanding of the chemicals business. Meanwhile, other business streams are constantly evaluated for viability.

“We have a very, very strong oil and gas base and that part of the company will remain important for many years ahead,” Mr Bentham says. “But new business developments will go on top of that as these areas eventually diminish. So, we will be a part of broader transitions.”

Already, the business has changed. The gas side of the equation overtook oil some time ago. Likewise, the chemicals side will only strengthen as the world ceaselessly seeks efficiencies requiring lightweight solutions and more insulation. In time, there will be solar. Shell is already one of the top marketers of biofuels.

It is for reasons such as these that Shell Wind Energy was founded in the 1990s. Mr Bentham himself used to run Shell Hydrogen, a division raised from the insight that hydrogen could be an important low-carbon transport fuel where the only emission from vehicles is water vapour.

A recent Shell study concluded that in 2050, 113 million fuel cell electric vehicles (FCEVs) could save up to 68 million tonnes of fuel and almost 200 million tonnes of carbon emissions, making a significant contribution to reducing energy consumption and greenhouse gas emissions in the transport sector.

“We’ve taken all these areas of business and brought them together pointedly in our New Energies Business,” says Mr Bentham. “It’s run by the same person- a board-level director – who runs our integrated gas business.”

How fast the other businesses grow depends not only on Shell, but also how policy evolves.

A Shell-led consortium that includes Mitsubishi announced in December that it would develop a massive 700MW North Sea wind farm off the south coast as the Netherlands moves away from coal and nuclear power plants. The €300 million (S$480 million) investment came on the heels of the Netherlands concluding an “Energy Accord” between government, business, unions and environmental groups to build sustainable energy platforms.

Still, Mr Bentham says it will be a while before wind and solar attain “Shell scale” even as the direction is clear: Already, solar heat is used in a Shell joint venture in Oman to generate steam that’s used in the industrial process. Likewise, people don’t perceive Shell as a power company. Yet it is the second biggest power trading firm in North America.

At the end of the day, the issue is about providing reliable energy to customers. As for the exact mix of that energy, it is for the consumer to decide.

That said, oil and gas are going to persist as components of the mix.

“It will be a long time before you see an electric-powered jumbo jet,” says Mr Bentham. “We see demand for oil growing through the 2020s before plateauing, perhaps in the early 2030s.”

Two years ago, Shell pulled out of Arctic exploration after spending more than US$7 billion (S$9 billion) in the project, perhaps because it was undermining its efforts to influence the climate change debate. The growing number of alternatives, such as “tight oil” – as shale is called – also influenced the decision.

Mr Bentham says a decision like that always has a “lot of fingerprints” on it. “It was a resource with a particular kind of profile that didn’t match the profile we were trying to build.”

Silicon Valley car company Tesla just unveiled an electric car for the mass market. In South Korea, the island of Jeju says it will go all-electric by 2030. New Delhi has similar plans. How does Shell view all this?

Mr Bentham says the deeper “electrification” of the economy is inevitable, starting with light vehicles and light industry.

Heavier vehicles will probably be electrified through the hydrogen fuel cell. But heavy industry will require high temperature furnaces and processes where oil and gas will still be key. What’s more, in non-OECD countries, fully half of the residential heating today comes from burning dirty traditional fuels such as dung, wood and peat.

The transition to clean commercial fuel – in whatever form it takes – will keep demand alive for years to come.

Still, the deployment of solar for producing electricity is taking place at the faster end of Shell’s scenarios, he concedes, crediting it to a “virtuous cycle between policy, technology and development”. On the other hand, the fuel cell has not progressed quite to plan although the technology has matured. One reason is that car manufacturers with the technology have not moved into mass production yet.

“At this point it is in a valley of death,” he says. “You have to build up production to bring costs down and the lowering of attention to it in the last 10 years means the cost reductions have not been locked in yet.”

Shell is working with the German government to set up 200 Shell-funded hydrogen filling stations across the country, potentially rising to 400 stations. It is the company’s way of contributing to the transport infrastructure.

“You help catalyse things but need to have the corporate humility that you are just part of this,” he says. “President (Harry) Truman used to say it is amazing what you can achieve if you do not care who gets the credit.”

With the urban population poised to double in the next 40 years, which world cities are getting things right on the energy front?

Mr Bentham, who sits on Singapore’s Urban Redevelopment Authority international expert panel, names the city-state as one that scores high on several fronts, including its ability for flexible planning. He also credits it for being more open to new ideas than it used to be.

“It is my favourite urban powerhouse,” he says, contrasting it with Detroit in the United States. “Back in the 1960s, when Singapore was one of the poorer nations, Detroit used to be one of the richest cities in the world. It is now where it is. Although green shoots are growing, 30 per cent of the city is derelict and 50 per cent of its population are functionally illiterate.”

What drives him, excuse the pun?

“I recognised in my heart the need to spread a decent quality of life from a minority to the majority,” he says. “I believe it can be done.”

He pulls his American-born wife, Mary, into the conversation.

“It comes from servant leadership and from our Christian faith,” says Mrs Bentham. “Most of the people we know (at The Hague) ride bicycles, which is fantastic. But for some, this is because they can’t afford anything else. We have family on welfare. My sister and her husband live in an HDB flat in Ang Mo Kio. So, you are aware of being a steward for people who don’t have a voice.”

Perhaps it all goes back to Everton as well in some ways.

Created as a department of the football club in 1988, Everton in the Community is one of the most lauded charities for sports and other activities, involving a range of people in the Merseyside area, from young offenders to the autistic to those confronting racism and homophobia.

Leaves you thinking: Not every British battle is won on the playing fields of upper crust Eton!

A version of this article appeared in the print edition of The Sunday Times on August 06, 2017, with the headline ‘Charged up over clean energy’.
  • Fast facts

  • JEREMY BENTHAM

    Jeremy Bentham is vice-president, Global Business Environment, at Shell International, and Leader, Global Business Scenarios at Royal Dutch Shell.

    He has been responsible for the team that develops the company’s forward-looking scenarios since 2006. He is 59 years old.

    Previously, he was CEO of Shell Hydrogen.

    He joined Shell in 1980 after gaining a post-graduate degree from the California Institute of Technology and a Bachelor of Science in Physics from Oxford University. He also holds a master’s degree in management from MIT.

    Born in Blackpool, England, to a coal mining family, he is married to Mary and the couple have three children: two girls and a boy.

    He is a staunch supporter of Everton Football Club and deeply interested in theatre.

    SHELL

    Royal Dutch Shell is a British-Dutch energy company headquartered in the Netherlands and incorporated in the UK. It has an annual revenue of US$234 billion (S$318 billion). Often referred to as an oil and gas “super-major”, it is Europe’s largest multinational corporation. It gets its name partly because the parent company once transported sea shells from East Asia to European markets.

    Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has renewable energy activities in the form of biofuels and wind.

    Shell has operations in over 70 countries, including Singapore, where it has had a presence for 125 years.

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