Royal Dutch Shell said it saw little risk of being left with “stranded assets” as the world begins to shift away from fossil fuels and promised to keep pace with the global transition to cleaner energy. The Anglo-Dutch group said 80 percent of its current proved oil and gas reserves would be produced by 2030, when it expects demand for those hydrocarbons to be higher than it is today even under its most aggressive scenario for growth in alternative forms of energy. Shell said it was confident that its reserves would remain competitive over that period at prices as low as $40 a barrel, compared with about $70 today, and that the group had enough flexibility to adjust longer-term investments in line with the changing energy landscape.
The assertions came in a report issued by Shell on Thursday on its strategy for adapting to a lower-carbon energy system. Ben van Beurden, chief executive, said understanding what climate change meant for Shell was “one of the biggest strategic questions” facing the group and promised to “stay in step with society and our customers” in efforts to reduce carbon emissions. The report came a week after Shell was threatened with legal action by Friends of the Earth, the environmental group, over its contribution to global warming, and weeks before a vote at its annual meeting on a resolution from activist shareholders calling for a faster shift away from fossil fuels.
Shell committed last year to disclose more information about “climate risks” to its business in response to mounting scrutiny from investors and regulators. The group has declared its support for the Task Force on Climate-Related Disclosures, which is developing voluntary guidelines on the issue under the leadership of Michael Bloomberg, the philanthropist and media owner, and Mark Carney, governor of the Bank of England and chair of the G20’s Financial Stability Board.