2023-06-18 12:21:20
Despite social pressure on Shell to go green, the company’s CEO announced last week that oil production will not decrease any further. The company says it is ahead of the targets to reduce emissions. But American shareholders also make their mark.
Shell will no longer reduce oil production by 1 to 2 percent per year, CEO Wael Sawan said last Wednesday. The company is also allowing the gas division to grow again. This is a sensitive issue following the court’s ruling two years ago that Shell must also contribute to reducing global warming.
According to Shell, the company is eight years ahead of schedule to become more sustainable. The number of oil barrels had to fall by 20 percent between 2019 and 2030. “We achieved that last year, so eight years earlier,” a spokesperson told NU.nl. Oil production is expected to remain at 1.4 million barrels in the coming years.
The falling number of oil barrels is partly due to the sale of a shale gas location in the US state of Texas in 2021. Shell is stepping out of various parts with high CO2 emissions, the spokesperson explains. Although Shell has appealed the court’s decision, the company says it wants to meet most of the sustainability goals set.
Fossil fuel enthusiasm is high in the US
American shareholders in particular are increasingly putting pressure on Shell to continue to invest in the fossil fuel industry, says energy expert Jilles van den Beukel. “Europe is moving away from the fossil fuel industry faster than the United States,” he says. As a result, more American shareholders are now sitting at the table at Shell than before. “And for them, short-term profit is more important than sustainability.”
Shell is anxious about a possible takeover of those shareholders if not enough profit is made, suspects Van den Beukel, who himself worked for the company for 25 years. “Behind the scenes, Shell is certainly thinking about this,” he says. The return on oil projects is about 25 percent, while the return on renewable energy continues to fluctuate between about 5 and 10 percent.
Shell booked a record profit of 40 billion euros in 2022 due to high oil and gas prices. Sustainability expert Marie Louise Blankesteijn sees that Shell only invests a few percent of its profit in the development of sustainable technology. “That tends to be greenwashing, if you look at the choices the company is making now.”
UN chief António Guterres called on the fossil industry on Thursday to take their responsibility. “The world needs to phase out fossil fuels equitably,” he said. “Companies must move away from a product that is incompatible with human survival.”
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