A Shell Game


Predicting when global economies will reach peak oil demand has become something of a sport in recent weeks. While most predictions fall within the 2030s, new reports indicate that peak oil demand may take place as early as 2023, far sooner than many energy analysts and oil companies had previously imagined.

A report by the Carbon Tracker Initiative indicates that a combination of technology, policy, and necessity will likely translate into an oil demand peak in the early 2020s. Another study by Norwegian company DNV GL predicts that peak oil demand will take place in the next half-decade or so. It also forecasts the effects that this shift will have on global markets.

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The decarbonization of the energy mix will be reflected in investment trends with money spent on renewables set to triple by 2050. Conversely, fossil fuel spending will drop by around a third,” DNV GL’s website explains. Experts predict that investors will not wait for the complete phase-out of fossil fuels before they shift capital from fossil fuel investments.

With this in mind, it seems a handful of energy companies with petroleum interests have begun diversifying their energy portfolios. In 2017, Royal Dutch Shell announced the goal of reducing the net carbon footprint of its energy products by 20% by 2035, and by 50% by 2050. According to GreenTech Media, it has since invested in or acquired six companies working on the grid edge, including the purchase of a majority stake in microgrid developer GI Energy. These initiatives align with the company’s plans to invest $1 billion per year toward developing new technologies to reduce its carbon footprint.

More recently, the company deployed a microgrid at its Shell Technology Center in Houston, TX. “This project is an important step in Shell’s efforts to explore and develop new energy technologies as we work towards our goal to power progress together by providing more and cleaner energy solutions,” said Jon La Follett, Energy System Integration and Storage Program Lead in Shell’s New Energies Research and Technology Department.

The microgrid integrates power generation from distributed energy resources to provide resilient energy for the 200-acre Shell Technology Center campus. The system, installed by Black & Veatch, combines 300 kilowatts (kW) of solar, a 127-kW natural gas generator, a 250-kW 1,050-megawatt-hour (MWh) lithium-ion battery, and a 250-kW load bank. In 2019, Shell plans to expand the microgrid with additional energy storage and electric vehicle chargers.

What are your impressions? Could this indicate a trend? Do you foresee the diversification of more energy company portfolios going forward?  
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