A major test for Shell’s massive multi-purpose greenwashing juggernaut
Recently, I wrote at LobbyWatch about how the gargantuan global oil and gas company Shell has been pivoting into an exhausting new way of defending its fossil fuel business. This, I described, is the Shell game — a pea and thimble trick to distract us.
The heart of the problem: Shell is very, very good at creating what looks like a climate plan, but is instead an extremely mild shuffling of numbers underneath the hood. They have created the Hummer of greenwashing — a multi-purpose, all-terrain, climate-killing juggernaut decked to the gills with every single trick in the book.
Some features of the juggernaut I discussed in my previous post include:
- Assuming an unbelievable quantity of tree planting and carbon capture will offset continued oil and gas burning,
- Setting carbon intensity targets that allow for wiggle room — that is, emissions rising even as ‘intensity’ falls due to more sales of fossil fuels,
- Asserting that emissions have peaked, but remaining coy about the rate of decline (which, if slow, means a huge amount of avoidable climate harm).
Shell’s climate plans, which it released in February, have been recently formalised into an “energy transition plan”, which the board has presented to shareholders for a vote at the company’s Annual General Meeting in May. It is the first real test of whether badly insufficient climate plans will be welcomed or criticised. There wont be another update until 2024.
ACCR was one of several major groups, including Greenpeace and Oil Change International, to sign a letter urging investors to vote against Shell’s problematic climate plans. It’s an advisory vote, not a binding one, but Shell have not exposed their climate attitudes to this style of scrutiny before, and so this is a vital decision.
We need to pick this machine apart. We need to go right down to the wires and the screws. So let’s consider the full details of their strategy — and how it creates a justification for Shell to change nearly nothing in the next decade.
How to make an anti-climate climate plan
This ‘Transition strategy’ is a balancing act of allowing slivers of climate action while aggressively protecting its core business. This is made immediately clear in the introduction:
“While the energy transition brings risks to the company, it also brings opportunities for us to prosper and to build on our positive contribution to society. Our strategy, as outlined in this report, is designed to minimise those risks while enhancing our ability to profitably lead as the world transitions to an energy system that is aligned with the goal of the Paris Agreement”
The balance, as you might expect, skews in precisely one direction: towards “minimising risks” to the company.
The fundamentals remain the same as in February: “Ending our activities in oil and gas too early when they are vital to meeting today’s energy demand would not help our customers, or our shareholders”, writes the CEO, Ben Van Beurden.
It all smacks of a desire to, very simply, keep doing what they’re doing. That is, acting as the provider of a substance that we know for sure is harming humanity. As I I wrote previously, it seemed very likely that Shell’s ‘carbon intensity’ targets were serving as the cover for that aim. Those targets are “intensity” and not absolute quantities of emissions, and from what I saw in February, Shell could happily grow its fossil fuel business — selling more carbon to customers and creating far greater emissions — while still aligning with these targets:
So will Shell increase the quantity of fossil fuels it sells? With their new ‘transition plan, we can actually create a guess. Their transition plan says:
- A 1–2% decline in oil production (let’s use 1.5%)
- In 2030, gas will comprise 55% of total hydrocarbon sales
- Power sales will double
- Biofuels will increase 8x
Using these targets, and Shell’s most recent greenhouse and energy data, we can calculate a rough but decent sketch at what the next decade looks like for Shell:
You can tell why there are layers and layers and layers of rhetorical and numerical padding in this plan. The story is clear: Shell is targeting a 20% reduction in emissions intensity by 2030 not by winding down fossil fuel sales, but from very slightly moving from oil to fossil gas, selling more electricity (only some of which will be clean), and selling more biofuels.
They are freezing their fossil fuel business, not winding it down. And as we know, emissions are cumulative. If you freeze at a high level, you are actively deciding to worsen climate harm. The only way out: pulling with all our might on this system to bring it down to zero ASAP. Anything less is causing avoidable harm.
Knowing the numbers of megajoules of energy that will be sold in 2030, and the targeted emissions intensity, we can also create a pretty rough estimate of the company’s emissions (covered under its targets, which is not the whole company’s emissions — they sneakily leave out their petrochemicals business).
If Shell sells 22 trillion megajoules of energy in the year 2030, and their carbon intensity is 63.2 grams of CO2-e per megajoule, what will their emissions be? Put your calculator away! I did it for you:
“We believe our total absolute emissions peaked in 2018” is peppered throughout Shell’s report. And yeah, sure, they really did. But what Shell seem to be going to great lengths to obscure is that for the next decade, they will continue to profit from emissions at roughly the same rate as they’ve done in 2020 — even slightly increasing, from now to then.
I told you this juggernaut of greenwashing was decked out. But guess what: it goes even deeper. Shell splits their business into three chunks: upstream, transition and growth. It’s complicated, but it’s interesting. Let me show you.
Upstream
This focuses on their “vital supplies and oil and and natural gas which the world needs today”. Shell won’t stop exploring for new fossil fuels (purportedly to replace depleted fields), and will reduce annual spending on exploration from $2.2bn to a mere $1.5bn by 2025. “We have attractive exploration opportunities in the first half of this decade”.
They’re very explicit about any decline in oil production being extremely gradual — “by 1–2% per year through to 2030”. That’s because their planned capital investment of $8 billion in their ‘upstream business’ in the near term won’t be sufficient for growth.
This is a complicated way of declaring something simple: if Shell stepped back, their oil fields would enter into a natural decline. Reducing their emissions burden would be literally effortless. But that option is treated as unimaginable. And so they pump billions of dollars into oil fields, to prop up the rate of decline so that the supply of oil — and the resulting climate harm — remains basically unchanged.
Shell pepper their plan — and most of their marketing — with glossy soft-focus pictures of electric vehicle chargers. But when it comes to declaring their own faith in a short-term transition away from vehicles that burn old dead plants, they’re grizzliest skeptics around.
Transition
This relates to “integrated gas” and their chemicals and products business — which doesn’t seem to be about a ‘transition’ at all. As I (again, roughly) determined above, and as Shell have made relatively clear in public statements, they want to expand their sales of this fossil fuel:
Framed as a “natural gas shift”, they promise to grow the share of gas in their hydrocarbon production to 55% by 2030. It’s justified on these grounds:
“LNG DEMAND TO GROW AS GAS PROVIDES MORE AND CLEANER ENERGY Reduce CO2 and improve air quality
■ Natural gas emits between 45% and 55% less GHG than coal when used to generate electricity and less than one-tenth of the air pollutants
■ More than 750 million tonnes of CO2 savings as a result of coal-to-gas switching over the last decade
■ In 2020, for the first time on record, the number of coal-fired power stations decreased”
These pleas are becoming increasingly silly. It doesn’t matter if a fuel emits less CO2 than coal if you use twice as much of it.
Nor are the emissions savings of ‘coal to gas’ switching anywhere near as significant as stated. As the IEA recently found in a report, most of the world’s recent emissions reductions are coming from renewables, namely wind and solar:
The world’s gas companies are currently going through the same stages of grief that the coal industry went through in the mid 2010s. Promises of carbon capture, frantic advertising campaigns, flexing the muscles of regulatory capture — it’s all there. Shell are signalling their keen intention to participate in the last gasp for gas.
Growth
This contains their climate-related technologies like EV charging, electric power from renewables, biofuels, hydrogen, tree planting and CCS. And these numbers are vague, too.
Shell promises “50 million households equivalent renewable power”. Excellent — renewables. My speciality. This should be interesting.
Except, it is not interesting. It is a total blank slate. There is absolutely no useful information here at all. It is actually somewhat disturbing how little clarity there is anywhere on these figures.
Using an approximate annual Dutch household energy consumption of 2,450 kilowatt hours, 50m homes is around 1,225 terawatt hours annually. That’s not right: Shell sold 252 terawatt hours of electrical energy in 2020, and the plan is promising to double that by 2030. Do they mean per day or per year? There’s just no way of figuring it out. Without real numbers we cannot calculate what proportion of Shells’ power sales in 2030 will be clean power.
What we do know is that Shell set a target to invest $6 billion in renewables by 2020 — and that failed. Their renewable investment track record has been abysmal, relative to their fossil fuel business. And that doesn’t seem likely to change, given the ambiguities in these numbers.
I am stunned that this tiny, essentially meaningless statistics of the provision of zero carbon clean energy — the second most important number for an energy transition behind fossil fuel sales — is this vague.
The carbon capture claims are, mercifully, relatively clear. Shell is targeting 25 megatonnes per annum of carbon capture by the year 2035. Their latest annual reporting data makes it clear that to achieve their targets will require some massive changes from what’s happened over the past five years:
It’s the exact same shape for Shell’s more notorious plans to ramp up its carbon offsets schemes using “nature based solutions” five years earlier, by 2030:
And hey, since we’re on the topic, what does Shell’s 8x Biofuels target look like?
Are you sensing a theme here?
Of course, what the carbon capture targets hide is the sheer magnitude of greenhouse gas emissions created by Shell’s business. Both these approaches only capture carbon dioxide, but Shell’s total emissions footprint is comprised of several greenhouse gases.
Combining the two carbon capture methods above, and Shell’s existing and predicted greenhouse emissions, we have a much clearer picture of what is happening here:
In 2020, Shell was responsible for just over 1,300 megatonnes of CO2-e of greenhouse gas emissions. In that year, it captured 0.94 megatonnes of carbon dioxide using CCS, and offset a further 4.3 using carbon offset schemes that are now recognised as extremely suspect.
In 2030, Shell promises to offset 137 megatonnes of carbon dioxide. By my calculations above, they’ll emit around 1,400 megatonnes of carbon dioxide equivalent.
Shell has to ramp up CCS and nature-based offsets massively after five years of doing nearly nothing, and even then, both remain controversial in their effectiveness, and even then, it’ll only be a fraction of Shell’s total emissions. You know what isn’t packaged with a stack of even thens? Winding down fossil fuel sales rapidly and selling clean energy instead, just like Danish firm Ørsted did. Except Shell tells us nothing about their renewable energy share!
Shell’s climate plan is towering mountain of delay tactics
How likely is it that Shell’s ‘Growth’ areas — focused on climate solutions — will outpace its oil and gas business, in the coming years? Buried in the transition document is an outline of what Shell expects to earn money from after 2025. The company’s fossil fuel business — ‘upstream’ and ‘transition’ go from 89% of cash flows to 75%.
“In 2020, the company spent $1.7 billion across its ‘Upstream’ and ‘Integrated Gas’ businesses on exploring for new fossil fuels — compared to just $70 million on capturing emissions from burning fossil fuels through CCS, and $90 million on ‘nature-based projects’”, write ClientEarth, in their ‘Greenwashing Files’ summary of Shell’s activities.
In essence, it’s pretty clear that Shell aren’t interested in an energy transition. They’re interested in the illusion of one.
Most of Shell’s actual energy seems to be going into creating ever-deeper layers of obfuscation, rather than, you know, reducing emissions. And the public-focused greenwashing exercises are ramping up.
Shell recently came under fire for sponsoring an exhibition in the UK’s renowned Science Museum. “Our Future Planet will showcase the cutting-edge technology and nature-based solutions being developed to trap carbon dioxide — from conserving ancient woodlands, to installing processes that prevent carbon dioxide leaving power stations and factories”.
Giant fans to suck carbon from the air and a “mechanical tree” adorn the exhibit — the school strike movement in the UK has called for a boycott of the museum. But the museum sponsorship, featuring towering symbols of the future viability of fossil fuels thanks to the magic of carbon capture, are yet another feature on Shell’s big, powerful and seemingly effective PR juggernaut.
Shell are heavily reliant on everyone else going slow, just as they plan to. “If society changes its energy demands more quickly, we intend to aid that acceleration. If it changes more slowly, we will not be able to move as quickly”, they include in their transition plan. It is in their best interests to make sure that the second option — a slow change — is the most probable. And so they put their real efforts into public campaigns to put the brakes on rapid decarbonisation. That then serves as the justification for their unchanged fossil fuel output. This is grim stuff.
Shell is unique among the oil and gas companies. Other companies pick and choose a tactic for feigning climate action, and append it to their annual report. Shell uses them all: carbon capture false promise, intensity targets, opaque data, vague claims, museum sponsorships and a trillion billion trees. The resulting impact is powerful — it can only be picked apart through long, exhausting posts filled with colourful graphs.
They are pulling out all the stops for a key moment of investor scrutiny. It is a test for a multi-layered machine that is working to present the continued supply of climate harm as if it’s bold action. That machine needs to be stopped in its tracks, because it leaves a wake of incredible, tragic climate damage.
