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The Green Rush: Shell chief on greedy oil majors, consumers and gas flaring


Times Online
September 17, 2008

The Green Rush: Shell chief on greedy oil majors, consumers and gas flaring




Energy is at the heart of the environmental debate. Arguments around how it is sourced and used, how much consumers pay for it and how much companies profit from it have become increasingly bitter as energy prices have soared. Higher costs at the petrol pump have been played off against growing concerns about using more sustainable sources of power, and conserving or reducing the amount of fuel and energy that we use.

Jeroen van der Veer, chief executive of Shell, considers some of these controversies in his contribution to The Green Rush, our series on business and the environment.

Few would dispute that the business practices of an oil company appear to be at odds with environmentally friendly endeavours, but Mr van der Veer attacks the familiar image of the oil major.

“I’m always amazed that people think that oil companies are just there for the money and greedy and like to do a lousy job,” he says.

He argues that, because of the nature of Shell’s work, its employees are more environmentally conscious than most people.

Mr van der Veer highlights the tension between the world’s need for energy and the complications associated with sourcing, producing and using it.

“The world needs energy, and there is not any form of energy without disadvantages. You have to fight a balance between is energy at an affordable price; is it secure, so do we have it in our own country; do I create political aspects by sourcing that energy; and what is the environmental footprint of the energy?”

These aspects, he points out, differ for each type of energy, whether oil, gas, nuclear or renewable. He also argues that the call for renewable sources of energy should be placed into greater context.

“Sometimes you see adverts [that say] should we use wind energy or a large power station based on coal? What you should do in the advert is show the number of windmills that is equivalent to this power station based on coal. And then you will see that you need a huge land area to build all those windmills. That is then a more true comparison.”

He says oil companies have a role to play in encouraging and advising consumers to be more efficient in their use of fuel and power. Drawing a comparison between Europe and the United States, he says taxation can also prove effective in this way.

“A good example is that average efficiency of cars in Europe is 40 per cent better than in the US. Now why is that? Because we always have had in Europe a lot of excise duties on gasoline. So consumers bought, over time, cars where the performance gave more miles per gallon.”

Governments can offer further support by ensuring that mechanisms, such as the European Emissions Trading System, are a success and by backing underground storage of carbon dioxide, he adds.

Earlier this month, after Mr van der Veer had spoken to Times Online, the world’s first carbon capture plant opened in Spremberg, Germany, using technology designed to separate CO2 from other chemicals created during electricity generation and bury it safely in disused oil or gas fields, where it can be stored indefinitely.

Mr van der Veer says Shell is committed to ending the practice of gas flaring, the process of burning the gas released when oil is found, in its Nigerian operations. It has long been a source of international concern and the target of sustained protest from environmental campaigners. He says Shell is building pipelines to transport the gas from oilfields rather than flaring. But, he says this involves working in difficult terrain in an area the size of southern England and the work has been hampered by security concerns.

“Now that takes time and it takes money. And our people can only work in that area if it is safe for them to work.”

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