Three years ago, Royal Dutch Shell, one of the world’s largest producers of fossil fuels agreed to purchase Europe’s biggest electric vehicle charging companies resulting in a significant push into a market that threatens to one day topple the oil industry.
Shell accepted to buy NewMotion, a Netherlands-based provider of more than 30,000 private electric charging points for electric vehicles (EVs), with plans to eventually roll out the technology across the majority of Shell’s 45,000 branded service stations globally.
On the flip side of this coin, the Nigerian National Petroleum Corporation (NNPC) at the weekend said the crude oil found in the Benue Trough is in commercial quantity.
Mele Kyari, NNPC’s group managing director acknowledged the strategy is to aggressively explore for more oil in the frontier basins in order to grow Nigeria’s reserve base in line with the federal government’s aspiration to hit the 40 billion barrels reserve target.
Nevertheless, the European Union plans tight car CO2 limits. The European Commission published proposals for the rules on Friday, opening them to public feedback before finalising them this year.
Under the rules, car manufacturing would only count as a “sustainable” investment for vehicles that emit less than 50g of CO2 per km. This would apply to passenger vehicles and freight vehicles that weigh less than 3.5 tonnes. This new rule kicks in by the end of 2021.
What this means is that global oil demand will further fall and prices would collapse with it.
Read also: Buhari joins world leaders to welcome new Coronavirus Vaccine
The coronavirus induced demand collapse and the consequent sharp drop in oil prices shows what a drop in oil demand from Europe would mean for oil-exporting countries such as Nigeria. It means now is the time for Africa’s largest oil producer aggressively diversify its economy away from oil.
To return to Shell, the big oil major has focused on solving the real issues and helping its customers and industry to embrace low-carbon products thereby taking CO2 footprint down, significantly. But there will still be CO2 emissions.
In order to absorb those and really go net-zero “I think nature-based solutions are a great tool, and planting trees and protecting wetlands protecting forests is absolutely a wonderful thing to be doing,” Maarten Wetselaar, director of Shell’s integrated gas and new energies said at the Great Energy Debate 2020.
When asked what you would do differently if given a chance to start all over rebuilding the global energy system, Wetselaar said he would make sure as much energy demand as possible would use electricity.
Today that is about 20 percent. “We think we can push that closer to 60 percent. And we know how to produce green electricity, using solar and wind.”
Then on the other 40 percent the global energy system could initially be using oil and gas to make sure that the part of the energy demand that needs a molecule is well supplied. But then developing cost-effective hydrogen, second-generation biofuels would all come in to make that energy system truly net-zero. Also, of course, with carbon capture storage and nature-based solutions.
Companies like Shell have a rich and proud heritage in producing oil and gas and indeed it is their major business. But now they have the opportunity to participate in the energy transition. They have a global footprint, they have fantastic technology capabilities, and they build the biggest projects in the world.
