"We are facing an era of revolutionary transitions and considerable turbulence," according to Shell's 2008 Energy Scenarios to 2050, presented in Brussels on 7 April during a conference organised by Friends of Europe.
With energy demand set to double by 2050 while supplies decrease and pressures on the environment grow, Shell has presented two alternative scenarios that outline a global response to these three 'hard truths'.
'Scramble' versus 'blueprint'
The first and more pessimistic 'scramble' scenario is characterised by a 'flight to coal' and nationalisation of energy resources in the context of increasing global competition for energy supplies.
In this scenario, "demand-side policy is not pursued meaningfully until supply limitations are acute. Likewise, environmental policy is not seriously addressed until major climate events stimulate political responses," according to Shell.
An alternative and more optimistic 'blueprint' scenario, favoured by Shell, would be more pre-emptive and feature greater global co-operation between governments and the private sector.
A CO2 pricing mechanism accompanied by a functioning global carbon market would be a key feature of the blueprint scenario, as this would drive sustainable development in other areas, notably renewable energies and carbon capture and storage (CCS) technologies, which Shell considers fundamental for providing 'clean' energy from fossil fuels.
The right climate
The company's decision to back one scenario over another for the first time in its history "is not altruistic," according to Jeremy Bentham, Shell's Vice President for the Global Business Environment.
Shell says it is looking for a favourable and stable investment climate amid concerns that under the scramble scenario "the whole [energy] system will derail," said Jeroen van der Veer, the company's chief executive.
In the blueprint scenario, global CO2 emissions would be capped by 2020 and subsequently begin to decline to 2000 levels by 2050, according to Bentham, who believes this timeframe to be "realistic for achieving a global consensus on a meaningful set of agreements" to harmonise key energy systems.
If the blueprint scenario is not realised, necessary investments in the energy sector will be impeded, he warned.
