Palm | Kelapa Sawit

Two scenarios by Shell stress need to address global resource problem
Fiona Chan Straits Times 2 Mar 13;

THE world's energy demand may double in the next 50 years as the population grows to 9.5 billion and millions of people rise out of poverty, according to projections by oil and gas giant Shell.

Depending on the pace of global economic growth, Shell foresees either natural gas becoming the dominant energy source, or coal remaining widely used until solar power takes over.

These two scenarios, released by Shell on Thursday, underscore the critical role that governments and businesses play in shaping the energy system of the future, said chief executive Peter Voser.

"Above all, the scenarios reinforce the urgency of addressing the world's resource and environmental stresses," he added.

In the next seven years, the world could generate new energy demand equivalent to China's entire energy system, he said.

To address this, more use should be made of natural gas, renewable energy and technology that captures carbon dioxide emissions and stores them underground, he said.

Shell's scenarios highlight the danger of "policy drift and unbalanced regulation", which Mr Voser said could lead to higher greenhouse gas emissions and more pressing resource scarcity.

The first scenario, which Shell has termed Mountains, projects a sluggish pace of global economic growth, taking some pressure off energy demand.

In this environment, policymakers undertake smart urban planning in growing cities, triggering a transformation of the transportation sector.

Cars and trucks powered by electricity and hydrogen could dominate the road by the end of the century, and global demand for oil might peak around 2035.

This leads to greenhouse gas emissions starting to fall after 2030 and the eventual displacement of coal by natural gas, the cleanest burning fossil fuel.

This scenario also envisions the use of nuclear power becoming more widespread as well. Its market share could increase by about 25 per cent by 2060, Shell said.

The second scenario, called Oceans, paints a more prosperous but volatile world where the energy landscape is dictated by market forces and civil society, rather than government policies.

Public resistance and slow adoption of policies and technology limit the development of nuclear power and restrict the growth of natural gas outside North America, Shell said.

Coal remains widely used until at least the middle of the century, and oil demand continues to grow until about 2040, with higher energy prices spurring the development of hard-to-reach oil resources.

But Shell surmises that in this scenario, the rise in oil prices will also encourage the development of solar power as an alternative.

By 2070, solar photovoltaic panels will become the world's largest primary source of energy, according to Shell.

Although both scenarios project that global emissions of carbon dioxide will drop to near zero by 2100, the Oceans scenario takes a longer time to get there. This will result in greater fossil fuel use and higher total carbon dioxide emissions over the century than in the Mountains scenario, said Shell.

In drawing up the scenarios, the company noted areas of public policy likely to have the greatest influence on a more sustainable energy future.

These include measures to promote energy-efficient cities, transportation and buildings, encourage the safe development of cleaner-burning natural gas, and put a price on carbon dioxide emissions.