Shell’s Public Relations Offensive

Well, the Paris climate conference is less than six months away. Just the right time for Royal Dutch Shell to begin to ramp up their public relations offensive, this time by sending their CEO, Ben Van Beurden, to be interviewed by The Guardian, in a most interesting and revealing podcast. My transcript is below…


http://audio.theguardian.tv/audio/kip/environment/series/the-biggest-story-in-the-world/1432893498034/1664/gnl.big.150529.ac.biggest_story_shell_ep10.mp3

[Narrator] This is “The Biggest Story in the World”. And today we meet Shell.

Right at the very start of the campaign, The Guardian set their focus on Keeping it in the Ground. Keep the coal in the hole, and the oil in the soil. They decided the best way of doing that was to call on the big institutions to divest their funds from fossil fuel companies, effectively de-legitimising them, like the tobacco industry before them.

So what about the fossil fuel producers themselves ? What do they think about divestment ? Are they scared ? Do they even agree with Bill McKibben’s “Keep it in the Ground” numbers ? We know they’ve made noises about renewables in the past, but are they serious about moving off fossil fuels entirely ? And if they are transitioning, can they possibly do it in time ?

So today we go straight to the wellhead, to Shell’s Ben Van Beurden, one of the men taking it out of the ground to see whether he sees a future.

[Alan Rusbridger ?] I’m here with Damian Carrington and with Terry McAllister, that’s our Environment Editor and our Energy Editor. And we’re waiting for Ben Van Beurden to come in from Shell. Terry, just give us a quick outline of who Shell is, how big they are, what do they do ?

[Terry McAllister] To all intents and purposes, the second largest oil company in the world. They’re owned rather strangely jointly between the UK and Holland. They’re involved in all aspects of fossil fuel production. They bring it out to the ground, they refine it, they ship it all over the world, and of course you’ll see their petrol stations. They’ve got revenues of around $500 billion dollars a year. They’ve got proven reserves of 13 billion barrels of oil, which amounts to 4.5 gigatonnes of carbon. And…

[Alan Rusbridger ?] …and any of us who have a pension, quite a lot of that money’s probably coming from Shell, isn’t it ?

[Terry McAllister] …And they are very, very attractive to all our pension funds because of their high dividends that they pay on the back of their enormous profits which are around £15 billion a year.

[Alan Rusbridger] And who is Ben ?

[Terry McAllister] Ben is a new Chief Executive, who’s come in 18 months ago. And he’s an interesting cut away from the traditional rather dour Chief Executives that Shell have had in the past. He is a Shell “lifer”, so he has come out of the system. But he’s upbeat, accessible, articulate, and becoming a very high profile advocate of a new, responsible oil company.

[Alan Rusbridger] And Damian, there is a controversial company, because what they’re doing in tar sands and the Arctic. What are they doing ?

[Damian Carrington] So, in terms of tar sands, which is digging up large chunks of Alberta and boiling the oil out of it, they’re already there in a big way. The problem with that is not only does it take a lot of energy to get that oil out, it’s also expensive and a number of analyses have suggested that any sensible scenario for climate stability does not include tar sands. That argument also applies to the Arctic, again, probably because of the cost of it. But I think with the Arctic, in addition, there is also great controversy, because any accident that would happen in the Arctic could be catastrophic for both the environment up there and for the company in terms of the cost of trying to deal with it.

3:17

[Alan Rusbridger] And they’re also controversial because of who they fund. There’s an outfit called the American Legislative Council. Who are they and why is that controversial ?

[Terry McAllister] Well, they’re most known certainly to environmentalists as climate deniers, pure and simple. So Shell’s involvement in that organisation looks curious. I mean, it’s a very controversial organisation for Shell to be associated with.

[Damian Carrington] I think other companies have left, have they Terry ?

[Terry McAllister] Yes they have.

[Alan Rusbridger] Well, let’s see what he’s got to say.

3:46

[Alan Rudbridger] Um. Ben. Thank you for coming in. It’s good of you to come in and talk. Let’s accept for the purposes of this conversation that fossil fuels have brought great benefits to society. They’ve enabled riches beyond measure to develop; that we live much more comfortable lives; as a result of oil. But nevertheless, there is a wider cost and a wider fear about the future of fossil fuels. So, what do you think about what seems to be a widespread acceptance that if we go beyond two degrees of warming then there are major, major problems for the human race, and the kind of existence that we lead at the moment ?

4:24

[Ben Van Beurden] You know, I accept the fact that, you know, having the climate change beyond two degrees C is probably highly undesirable and we should do everything to prevent that from happening. In that sense there is no contest. And whether it’s two degrees, or two and a half, or one and a half, or whatever, I don’t really mind too much. What I do know is that we will have to act quite effectively and quite early now to make sure that we have a chance of staying within CO2 concentrations that are often linked to this two degree scenario.

5:00

What I find troubling is that we have known this for some period of time, but as a result of it not much has happened. Now, we can go into a long discussion, why is that, and who is to blame, and what could we have done differently. But the result is, because nothing much has happened. As a matter of fact, a lot of the things that we have done whilst setting targets and having tough language around this and maybe here and there a few measures, is that we have been increasing the intensity of our economy, in terms of carbon emission, and policy, really meaningful policy action, has been delayed. Now what that has done in my mind, and partly for me as well, it has created a sense of frustration. And of course, I can do something about it in a slightly different way than the general public. And the frustration with the general public is now leading to well, we’ve gotta do something, yeah ? So, now, whether that is going to be, well, let’s divest from companies like Shell, or let’s make statements of whatever kind, I think that you can debate that.

6:00

My view is that the things that need doing is meaningful policy change or policy adoption. And we should be very, very careful that the current argument around the “carbon bubble” and “we cannot allow this to happen”, and “we should divest from fossil fuel companies”, that that actually is creating the illusion that there is a simple solution out there. Whereas in reality, we all know, there isn’t.

6:24

[ Alan Rusbridger ] Let’s come back to the solutions [in]… ’cause I just want to see what we accept, so what the common ground for this conversation [is]. So, two degrees, you broadly accept ?

[ Ben Van Beurden ] Yes, absolutely.

[ Alan Rusbridger ] Now, you’ll be familiar with the Bill McKibben article in Rolling Stone, I guess.

[ Ben Van Beurden ] Yes. The budget. Yeah.

[ Alan Rusbridger ] Let’s just see what you think of the two other figures there. Two degrees is the first interesting figure. The second interesting figure is if we’re going to stay within two degrees we can afford to burn about 565 gigatonnes. Do you accept that there’s a figure of around about that that is compatible with staying within two degrees ?

7:00

[ Ben Van Beurden ] You’re absolutely right. If you do simple math along those lines you could argue that there is a limited number of tonnes of carbon that we can burn in an unmitigated way. Absolutely right.

[ Alan Rusbridger ] So, let’s just see what you think of the third figure. Which is the amount of proven oil, gas and coal reserves which he says is 2795 gigatonnes. He says that’s about four or five times the amount that we can safely burn. Do you accept that ?

[ Ben Van Beurden ] Not sure about again the precise numbers. But if you will add up all the carbon that we have sitting in the ground – gas, oil, coal you will come to a number that if again you would just burn it in an unmitigated way it would probably have a CO2 loading in the atmosphere that is above the level that people link to CO2. There is no contest there, Alan.

7:53

[ Alan Rusbridger ] So, commonsense interpretation of those figures is that companies like yours have got already far more oil, gas and coal than they can ever use.

[ Ben Van Beurden ] I think that’s where the logic goes wrong.

[ Alan Rusbridger ] Tell me where that’s wrong.

[ Ben Van Beurden ] So, yeah, you’re absolutely right. There is probably more hydrocarbon resources sitting in the ground than we collectively can dig or pump up and burn, but at the same time they are in different types of carbon. So if you look again at coal – coal has a much higher carbon intensity. If you look at the sort of CO2 equivalent of the coal resources that we have – that is actually almost half of what is available. If you want to use the concept of a budget, then indeed we have an issue.

[ Alan Rusbridger ] Can I [say]… when you say we have an issue. What you’re saying is you own more than could be used.

[ Ben Van Beurden ] We as society have an issue.

[ Alan Rusbridger ] And do you say that about Shell, too ?

[ Ben Van Beurden ] No. I think in the end of course the resources that will get used, if we all behave rationally, or if there are policies that do the most rational thing, the resources that are going to be used hopefully are going to be the resources with the lowest carbon intensity. So that may be class of resource like gas or coal, but within the type of resource, it may be resources that from a well-to-wheel perspective have the lowest carbon intensity. So if we want to look at our business, we want to make sure that our business is as future-proof as possible – from a number of perspectives, including CO2.

9.30

[ Alan Rusbridger ] Your argument is that you’re more interested in the cleaner fuels than the dirtier fuels, if I can be… I’m the lay man in this room, so I’m using ordinary language.

[ Ben Ven Beurden ] That’s fair enough. I would probably say the lower-intensity fuels than the higher-intensity fuels.

[ Alan Rusbridger ] So, gas rather than…

[ Ben Van Beurden ] …Gas, [coal] oil and…

[ Alan Rusbridger ] …oil.

[ Ben Van Beurden ] …[oil] coal. Because bear in mind that people often confuse climate change with the pollution that comes from coal in the form of particulates, which are of course two separate issues.

9:55

But the point is, Alan, and I think there’s nothing wrong with the logic, is we cannot burn all the hydrocarbon resources that we have on the planet in an unmitigated way, and expect to have a CO2 loading in the atmosphere that is often being linked to the 2 degree scenario. So we have to do a number of things. Part of it is shifting to the cleanest form possible. Part of it is having as much as possible an efficiency drive, so that we do not use or need as much as we can. As much renewables or any other form of energy that has no carbon associated with it. And even then, we are not going to get to that, sort of constraint, if you like. So on top of it we will need to do extra tricks, which is capturing the carbon and storing it.

10:40

And I’m absolutely convinced that without a policy that will really enable and realise carbon capture and storage on a large scale, we’re not going to be able to stay within that CO2 emission budget.

10:54

[ Alan Rusbridger ] OK, let’s come back to that, because that’s very important. Why are you spending so much time looking for more oil if you’ve got more than you could use already ?

[ Ben Van Beurden ] Well, all the oil that we have we will use, even under a scenario where we will have a very, very effective set of policies to drive down the use of hydrocarbons, there will still be need for hydrocarbons for some time to come of course. And the rate with which we will be able to either sort of slow growth or even reduce, or switch from growth to shrinkage, the rate with which we will be able to do that, is always going to be lower than the rate with which resources deplete. So there will always be, even in the most aggressive scenario, a gap between supply and demand if we don’t continue to invest.

11:47

So there will always be a need for investment. Because it will take longer before we get to a point that we will have no need for hydrocarbons. I think we will get to the point where we will have zero emissions, by the end of the century, definitely, I’m a firm believer in that, but even then, some of the hydrocarbons that we will use, and the emissions that will come from it, will simply be mitigated, rather than not produced. There will be significant sectors in the industry that will depend on hydrocarbons – petrochemicals for instance, yeah. So I think to just say, “we can do without hydrocarbons” and “we don’t need them any more”, “let’s stop exploring for them because they are coming out of our ears already”, that is not quite an accurate reflection for a company like us.

12:32

[ Alan Rusbridger ] So there’s one argument about the quantum of oil that you’re searching for. Another is the type and location. People find tar sands very problematical as an environmental […] How do you defend that ?

12:47

[ Ben Van Beurden ] It’s a mining operation. I’ll be the first one to say that mining operations do not look pretty. You’re right that there is a significant CO2 emission. Take our Athabasca project in Canada where we are 60% shareholders – 6.5 million tonnes of CO2 coming out of the mine and the upgrader combined. And that’s of course a significant number. So we have to look for ways and means to deal with that. What we are doing at the moment is investing in a carbon capture and storage project on this particular mine. So we will be capturing of that 6.5 million tonnes, 1 million tonnnes of CO2, and that sort of gets us a fair way towards the average CO2 intensity of North American oil.

13:34

[ Terry McAllister ? ] Let me just very briefly on that, you’re talking there about the emissions that derive from getting the fuel out of the ground – not from [the] actual burning the fuel itself. You’re talking about the operations.

[ Ben Van Beurden ] Yeah, that’s true. That 6.5 million tonnes is the mining and upgrading operation. Burning the fuel in cars and etc. is of course still the bulk of it. But in that sense, it’s no different, or as a matter of fact, because it is a synthetic route that we make there, it actually is a higher quality crude, so the CO2 emissions associated with use of that crude are probably somewhat lower than the average. But in the main you have to look therefore from well to wheel, or mine to wheel, and that’s the only sensible way to look at CO2 intensity.

14:15

[ Damian Carrington ?] Fair enough, yeah. I wanted to come back. You were talking before about, the very clear conversation you and Alan had to begin with about accepting that all the reserves when you add them up are too much, you know. And you were talking about using, like it would be logical to use the least carbon-intensive first, OK. But there’s another logic in the real world, which is using the least cost first, OK. That’s where some of Shell’s operations start to look difficult, in the sense that tar sands come out at the very high cost end, the Arctic comes out at the very high cost end. And so in a rational world, if we’ve decided we’re not going to burn everything, those are the projects that get stranded first. So I’m just wondering if you accept that there’s too much. What’s special about Shell’s tar sands or Arctic, which means that it is sensible to go after them when they’re clearly high cost, and Saudi crude would be far cheaper and more sensible to use ?

15:04

[ Ben Van Beurden ] Yeah, yeah. It in the end is going to be market forces of supply and demand that set price, and then there’s going to be rational decision-making of investors that are going to figure out, “do I get a return on investing in this project ?”. The only way you can impact that, and this is why we are also great advocates of what I’m going to say, is put a price on carbon, and then say, well, I’m not really interested in the merit order that may flow from sort of normal rational decision-making around economics, I’m going to trick the playing field, I’m going to put a serious price on carbon. That is the sort of rational decision-making that we would like to see much more of. And that’s why we’re advocating for a firm price on carbon.

15:45

[ Alan Rusbridger ] Just to go on the Arctic. It’s very high risk, isn’t it ? Some people say it’s reckless.

[ Ben Van Beurden ] I’m familiar with that argument, Alan.

[ Alan Rusbridger ] And your response ?

[ Ben Van Beurden ] Yeah. Well, the more I listen and think about it, I actually hear two sets of arguments. And there’s one argument that says, “Listen, this is a very sensitive environment. It’s pristine to a very large degree. Of course, it will have great difficulties to deal with environmental impacts. Putting oil and gas operations right in the middle of it doesn’t seem like the right thing to do.”

16:20

There’s a second line of reasoning that I also hear, and I hear that probably more loudly. Which is, “Listen, you know, we have climate change. The Arctic is disproportionately impacted by climate change, which is probably a fact, yeah ? And climate change is caused by of course oil and gas, and therefore exploring for oil and gas in the Arctic is insulting.” That is an emotional argument, and there is no amount of reasoning that I can bring to bear to deal with that emotional argument. And I’m not going to try that even, because I think it probably does us a disservice as well. In the end we also have to make our decisions on the basis of logic. The opening about the Arctic is not our decision, it is the decision of an Arctic nation, in this case the United States. And it’s our task to figure out can we do this responsibly, can we do this profitably, and can it be done at all, yeah ? And if the answer to all of that is yes, then we should consider it as an investment opportunity. And we can only get into the Arctic in a responsible way if we can completely convince ourselves that we are able and ready to do this at a level of risk that is completely acceptable. And believe me I have had to go through a personal journey on that as well. Bear in mind I had the opportunity very early on in my tenure to say, “that’s it. Let’s pull the plug on it.” And we decided no, we have to follow this through, we have to understand whether it can be done.

17:47

[ Alan Rusbridger ] When you came to The Guardian last, you said you had the same discussions around your breakfast table as everyone else. And you’ve just hinted in your last answer that you sort of wear two hats as an individual. You’ve got your member of society, and [but] then I guess you go into work and you then have your primary responsibility is to shareholders. How often do those come into conflict ?

18:13

[ Ben Van Beurden ] Erm, I could either say all the time, or never. It… Let me explain what I mean by that. You are a very different person as well, yeah ? I have of course read your editorial, when you said, “listen. This is one of the regrets that I may have, and I want to do something about that.” And that is, in my mind, the same sort of drive that I have in this matter. Of course, I’m driven by business success etc. but what I’m also driven by, and this is why I am very, very happy to come and talk to you, even though we probably will never agree on a number of points, is that we need to do the right thing here. It’s very, very good that there is a broad societal debate on this, because I am completely with everybody else on this subject, that we need to tackle this. I’m also completely [aware] that there is a secondary moral challenge – which is supplying affordable energy to billions of people who do not have an acceptable lifestyle. And where I get a lot of my energy from is that if I see that as part of the societal debate seems to suggest a very simple solution that we know in reality is not there, I think we are creating somehow as society, a red herring, and doing ourselves a disservice.

19:33

And in a way we are, because of the belief that there may be a simple solution out there, like divesting out of fossil fuel, or stop using it, or whatever else, we are actually delaying meaningful policy action. Whereas in reality it will not happen this way. In reality there will be an inexorable drive for people to raise their living standards, to use hydrocarbons, because that will be the only meaningful volume of energy that is available. So we have to do something else, Alan.

[ Alan Rusbridger ] What do you think of the argument that says, this isn’t a level playing field, that your industry is getting too much in subsidies. And if the renewable [energy] industries got as much subsidies as you get, we’d crack that problem quite soon.

[ Ben Van Beurden ] First of all I’m not at all in favour of subsidies. Now, you have to be a bit precise about what you mean by subsidies, but directly subsidising fuel use like for instance happening in developing countries etc. I do not think is meaningful. I think companies like ourselves effectively don’t get subsidies, yeah ? It […] as a matter of fact, we pay significant taxes. You can talk about externalities, pricing that fully into, and then, but that’s not a subsidy.

20:38

[ Alan Rusbridger ] The IMF came up with $10 million dollars a minute the other day.

[ Ben Van Beurden ] Yeah, the $5.3 trillion dollars. Yeah, these are pricing in the externalities of air pollution into the price of energy etc. And I’m sure that these numbers have validity, but that’s not a subsidy.

[ Alan Rusbridger ] But do you accept that the odds are stacked against the renewable industry ?

[ Ben Van Beurden ] No, I…

[ Alan Rusbridger ] You’ve got tremendous power, your industry…

[ Ben Van Beurden ] …No, I don’t think so…

[ Alan Rusbridger ] …in terms of lobbying and access…

[ Ben Van Beurden ] …No, I don’t think so. If you look at renewables, and let’s be very clear, we have a renewables business, and I work very, very hard to understand how we can meaningfully participate, and of course make money with that as well. But if you look at the rate with which renewables are growing it’s absolutely unprecedented, yeah ? It is growing at I think the fastest pace of any new form of energy, almost reaching the point where it’s 1 percent of the total energy mix. But it’s only 1 percent. Bearing in mind that the energy system will have to double in size over the first half of the century to serve all these new energy users that we need to serve around the planet, renewables is not going to cut it. So we will have to do multiple things here.

21:49

[ Alan Rusbridger ] I’ve got lots of hands waving to my right.

[ Terry McAllister ? ] If I could…first on the poverty side ? You talked in your response to Alan there about feeling this kind of moral responsibility, you know, as an energy provider. I think the point where we might disagree is about whether fossil fuels are the solution to that particular problem. And I just wanted to very briefly tell you a bit about what the Intergovernmental Panel on Climate Change said, which of course is written and reviewed by thousands of the world’s scientists, and signed off by 195 nations. They say climate change, driven by unchecked fossil fuel burning is [quote] “a threat to sustainable development.” They say that limiting climate change’s effects is “necessary to achieve sustainable development and equity, including poverty eradication”. And they go further than that and say that “climate change will prolong existing and create new poverty traps”. So, I mean that’s a pretty authoritative document saying that fossil fuels are not the answer to providing energy to billions of people.

22:40

[ Ben Van Beurden ] No, it doesn’t say that.

[ Terry McAllister ? ] OK.

[ Ben Van Beurden ] It says that climate change is indeed also devastating probably disproportionately the poor people in the world. And I can fully support that, having lived in Africa myself for quite a few years, in the Sudan. But it doesn’t say that fossil fuels is not the solution for it, or that energy is not the solution for it. People in these circumstances will still need access to fossil fuels, will need access to energy in general. And the most sensible way to do that on the scale that they need it will be unfortunately through fossil fuels.

23:11

[ Terry McAllister ? ] I don’t understand how you have one without the other. You’re kind of saying climate change is a problem, but they still need fossil fuels. But fossil fuels are the things that are driving climate change.

[ Ben Van Beurden ] But this is. OK. So this is the dilemma that we need to solve. We need to find a way to providing affordable energy to poor people in the world that do not have access to affordable energy at this point in time, and at the same time we need to reduce CO2.

23:34

And if we somehow think that we can do all of that with renewables, that is just ignoring the realities of economic and technical development.

23:44

[ Terry McAllister ] Well, that’s fair enough. But people disagree with you. And I’ve seen it in India, you know, where when you’re a long way in rural communities, they’re not going to have a grid there, they’re not going to have big fossil fuel power stations, and solar is cheap.

23:55

[ Ben Van Beurden ] Absolutely. And you will see that happen. You will see probably the development of countries that do have nothing at the moment following a fundamentally different path than the UK, or Germany or the United States, absolutely. But they cannot skip large scale energy provision for meaningful economic development, yeah ? That is just not going to happen by solar and wind.

24:19

[ Alan Rusbridger ] Now, I’m not expecting you Ben to come here today and say that you agree with divestment as an idea, and I’m going to anticipate that you say that it’s better to have good money in your companies rather than bad monies, and that you prefer the idea of engagement. And I’m just going to see if whether Francesca can just play a little clip. Because we had Jonathon Porritt sitting in your chair a couple of weeks ago and we were talking about this, he’s spent 40 years in this business trying to engage with companies like you, and let’s just listen to what he says about engagement.

24:57

[ Jonathon Porritt ] They’ve had so many opportunities to put their houses in order and get after this much smarter decarbonised route to energy security, affordability and sustainability. They really have, I mean, limitless opportunities over the last decade. [But you just say], you’re all smart, you’re all paid God knows how much money to steer through these complex areas. You have a fiduciary duty to your shareholders, and yes you’ve been meeting that at one level, but at another level, in terms of guaranteeing long term value creation for shareholders, you are betraying your shareholders. And you are risking the write-off, the destruction of massive value inside the company.

25:34

[ Alan Rusbridger ] I’m sure you know Jonathon. He’s not a sort of extremist, or loony eco-warrior. He’s somebody who’s tried to build a business engaging with people like you. And in the end he said he’s come to the conclusion : it’s just never going to happen. Because of the, you know, it’s the wrong question to ask you. You’ve got different priorities.

25:54

[ Ben Van Beurden ] Err, I wouldn’t say that. It, err. So, we’ll get to the question of divestment in a moment. But the question probably that, or the challenge in here was, do we sufficiently recognise the need for a transition, either because of assets getting stranded, or because of the new opportunities that we as a sort of a responsible member of society need to also explore and develop. I fundamentally do not believe that that actually holds business rationale, simply because even under a very, very aggressive scenario where we get out of fossil fuels, the scenario with which fossil fuels’ existing production depletes will always result in a divestment or an investment, opportunity, so therefore investing in fossil fuels will remain relevant for a very, very long time to come, for our shareholders as well.

[ Alan Rusbridger ] Just to jump in there, you have got people like the Governor of the Bank of England flagging that up as an issue.

26:51

[ Ben Van Beurden ] Yeah, well OK, I will not comment on the Governor of the Bank of England. But investment opportunity will always remain, and if you have an “advantage portfolio”, you will always be able to make money out of that. So therefore that argument in my mind is just comprehensively non-existent. It may sound seductive, but it’s just not there. Now the other argument which is “do we have opportunity, or do we have even an obligation to invest in low a carbon energy future ?” : absolutely. Because I also know that whatever I’m going to find as a business model or as a technology that will work for me is going to take decades to be pulled off.

27:30

Can I just remind you that we have been very, very active participants in solar energy, in wind energy, biofuels. We were in forestry. In many, many areas we have been ahead of our time, simply because you know the opportunity to really meaningfully invest in it was just not there. So I want to be on the one hand careful that we do not repeat that mistake. On the other hand we are very actively experimenting with new businesses to find how we can participate in a renewable-based energy system. Because it will come there.

28:07

[ Alan Rusbridger ] There’s a letter in The Times today that says you spend three times as much finding new fossil fuel reserves as you do on developing renewables. Does that sound the right figure ?

[ Ben Van Beurden ] Yeah, but it… No. We do not spend a lot of time sort of inventing an improved wind turbine or figuring out what sort of new solar panel technology would be there. You have to also in that sense go back to core capabilities. If you were to set up a solar PV business, you wouldn’t hire a bunch of geologists to figure out how to do that. But making money out of a renewable future, absolutely, this is something that we need to do.

28:48

[ Alan Rusbridger ] Tell me about these conversations with people like Wellcome and [Bill] Gates. They say we like investing in companies like Shell, because we have influence. And if we took our money out we wouldn’t have that influence. But nobody can ever point to what that influence looks like, or what results from that. Can you enlighten us [as] to what good things come from good conversations with good people as opposed to bad people ?

29:11

[ Ben Van Beurden ] Of course we talk to all our shareholders. And certainly, and of course, from certain groups you hear this more than from other groups, there is concern around the “carbon bubble”. And that is probably a mix of concerns, where some people are really concerned with the Governor of the Bank of England argument, like, “can these assets really become stranded ?” And you have people who are in there indeed for again sort of belief reasons, fundamental reasons. I do not want… I believe fossil fuel is bad, it sits in a bracket of investments that I don’t want to be in. Some of the advocacy can help to point out that you know there’s a lot of good things that come from energy. As a matter of fact, people use energy and fossil fuel products much more than they will ever realise. And they don’t realise what the world would look like without it. And I think we can also help people a little bit more along the understanding line by pointing out what it is that we are doing, and where we think we are indeed a progressive company, in making the energy transition work.

30:15

The problem with that is, Alan, is that we’re not very good at it, you know, at that sort of public advocacy piece. We have over [the] many years built up a reflex that engagement has more reputational downsides than upsides. And I think to some extent therefore we are partly to blame for the dysfunctionality of the debate in society at the moment. So, I want to change that. I want to be working for a company, or leading a company, that is not only considering itself a force for good, but is being recognised as a company that is responsible, does the right things, as well.

30:51

[ Alan Rusbridger ] You’re sometimes now compared with tobacco, or with South Africa, as a kind of, a thing in society that is becoming toxic. Do you accept that that’s just going to get worse for companies like Shell ?

[ Ben Van Beurden ] That would be a tragedy I think, and not only for a company like Shell and its employees, and for me personally, but I think also for society. It would be tragic if people thought that having access to modern energy, and basically having access to the lifestyle, the security, and the life expectancy that we have, was actually [a] bad thing. And sometimes a little facetiously, I just tell people if you want to divest your portfolio out of fossil fuel companies, as much as people have divested them from tobacco companies etc. you probably are going to make more impact by divesting your lifestyle from fossil fuels. And then look for a moment what that will do to you.

31:49

[ Alan Rusbridger ] You’ve essentially, I think, put the responsibility for change on the policymakers. So that’s like saying, “stop me before I kill again”.

[ Ben Van Beurden ] Yes. OK.

[ Alan Rusbridger ] You’re saying, “we can’t do this as a company, unless there’s a level playing field for everyone” and you say you’ve been lobbying for this, but you’ve still put a lot of money into things like the American Legislative Council, which other people have pulled out, which is lobbying in the other direction. You’ve got mixed messages.

32:18

[ Ben Van Beurden ] I do not want to leave the impression that it’s all the policymakers’ fault. That would be too easy. Policymakers respond to input and insight that they get. Sometimes that is indeed by voters and public opinion, and I think we can do more, and we should do more, to advocate for sensible policy. And I am not ashamed, because we are advocating for things that I can 100% stand up for. If anything, I feel that we have not done well enough. I think sometimes our policy advocacy has been too high level. We can do more, we can do better, and I wish I was ready, but I will be in a few months’ time to tell you a whole lot more about what it all means in detail, because we have a massive amount of work going on in that sense. To have much more bespoke, targetted policy advice, based on the sort of transitions that we can see happening [in] different types of economies around the world.

33:17

Now, some of the advocacy we do on our own. Some of the advocacy we do in the context of a trade association, or a professional advocacy group. And what you typically find if you are in there is that, well some of them you have high degrees of agreement, and some, not at all. We have done it on many occasions, where we, you know, we are part of a trade association, and say, well we stand for all the things they say here and there, but this point we disagree with, and our advocacy is the following…

33:45

[ Damian Carrington ] But can I ask… ?

[ Alan Rusbridger ] …just let Terry…

[ Terry McAllister ] Still in terms of um, your overall position : you’re keen to be seen as progressive. You’re keen to be seen as responsible. And it, obviously that’s um, to be lauded, and the industry desperately needs someone to step into that space. But still it’s confusing in terms of the kind of lobbying groups that you support. But it’s confusing when your own emissions, your own carbon emissions, are going up year by year. They’re set to increase even more, by taking over BG [BG Group, formerly known as British Gas]. Your involvement in oil sands, tar sands and the Arctic, still you sort of put it down to, well, “if it’s available, through policymakers then we’re going to proceed”. But companies like Total have said that they won’t explore in the Arctic. Would an oil spill in the Arctic potentially end the future of Shell, financially ?

34:43

[ Ben Van Beurden ] Well, the thing is of course to avoid a very large oil spill in the Arctic. The risk of a very large oil spill in the Arctic is unacceptable for me. So if I feel that there is a risk that that could materialise, we would simply not go ahead with this, yeah ? So I do not think we send any conflicting signals on our advocacy. If we indeed associate ourselves from time to time with trade organisations or with advocacy groups that have a different viewpoint, we go at lengths to explain how our viewpoint is different, if it’s meaningful. And if it’s too substantial, then we will just step out of these organisations, so watch that space as well.

35:21

If you go back to our own emissions. Of course, our own emissions will go up because we will combine with BG. But it doesn’t mean that…

[ Terry McAllister ] But they’re going up anyway.

[ Ben Van Beurden ] Yeah…emissions in general will go up, it’s just that we have become a different company. I think to look at sort of emissions as an absolute way is somewhat meaningless as well. You have to look at the emission intensity of the classes of assets in which you operate.

35:45

[ Alan Rusbridger ] We’re running out of time, so I’m going to ask you one last question. When we did a Q&A with The Guardian readers on the site, the only question that readers wanted to know about me was what car I drove. And I was able to answer truthfully that I thought I was the only editor to have owned not one but two G-Whizzes, described by Jeremy Clarkson as the worst car in the world. What car do you drive, Ben ?

[ Ben Van Beurden ] I drive a BMW.

[ Alan Rusbridger ] What kind of size are we talking about ?

[ Ben Van Beurden ] Oh, it’s a 645 convertible.

[ Alan Rusbridger ] That’s terrible. That’s an enormous gas-guzzler. You should be ashamed of yourself, coming in here, talking like this.

[ Ben Van Beurden ] Ah. Come on. You have to believe in your product as well. So, I put the full V Power [in it] all the time, and it drives wonderful.

[ Alan Rusbridger ] Oh, you’ve ruined everything. Well, anyway, Ben, thank you very much for coming in, and stepping into the lions’ den, and talking so eloquently. Thank you.

[ Ben Van Beurden ] Thank you very much. And thank you very much also for your leadership in this space, Alan. I really appreciate that as well.

36:42

[ Alan Rusbridger ] Terry, Damian. What did you make of that ?

[ Terry McAllister ] I’m still troubled by the fact that there’s a lot of drivers that encourage Shell and the Chief Executive to go in a fossil fuel direction despite all the interesting comments he had to make about the importance of climate change and wanting to lead this debate and be a responsible actor. I’m still very unconvinced by the difference between what they say and what they do. And particularly the I’m afraid the sort of inadequate answers over your questions on things like tar sands, and particularly the Arctic, where they’re still taking a massive risk. And I don’t see how the company can hope to be taken very seriously on the issue of climate change, and emissions controls, when its own emissions are going up, it’s growing the size of the fossil fuel business, it’s moving into a very, very dangerous and pristine environment like the Arctic.

37:52

[ Alan Rusbridger ] To do him credit, it was fairly remarkable that a CEO of a company like Shell should come into The Guardian and take part in a conversation like this. I mean, that is a different breed of executive, isn’t it, for a company like Shell ?

[ Damian Carrington ] Absolutely. I mean, Terry will I’m sure tell us in a minute because he’s met many more energy CEO’s than I have, but I think it is remarkable. And I think if you just contrast it for example with our current relationship with ExxonMobil, where they send us the same sentence every time we ask them for a comment, which is, “we’re not talking to you.”

[ Terry McAllister ] What’s interesting about it is that Ben Van Beurden at the end of the interview talked about how Shell itself was looking at fine-tuning its own policies on these issues, and indeed at the moment is looking at producing its own document. It seems to me that they genuinely are in a position of flux. Fortunately they’ve got a Chief Executive who seems to be very self-confident. He’s very articulate and genuinely interested, and wants to be engaged. And as you say, his predecessors didn’t do that, despite repeated requests. So, I think it is encouraging. And I do get the impression they may be open to argument and persuasion.

[ Alan Rusbridger ] And what about the size of his BMW ?

[ Terry McAllister ] I actually asked the same question of Jeroen Vandeveer, one of his predecessors, and he told me that he rode a bicycle ’cause fuel cost too much. So I don’t know which was more amusing. I rather expected Ben Van Beurden to be driving a large scale saloon as he said as a vote of confidence in his own business.

[ Damian Carrington ] Can I say one last thing, which is that, you know, obviously, The Guardian has done this, you know, this big piece of work, this project on divestment, over the last few months, and what’s become clear is that you can imagine a model for a fossil fuel company for the future, and you start to see the shape of it with E.On splitting its business out for example – they’re a big utility. So, and just in the interview there, you know, Ben Van Beurden told us that in 2050 we probably will have a very, very large segment of renewable energy. And you can imagine a fossil fuel boss – their challenge is to persuade their shareholders that this makes sense – but you can imagine them setting out a future which says over the next few decades we are going to ramp down our fossil fuels and we’re going to increase the other parts of our business. And at that point I think most people in divestment would say, actually that’s OK.

[ Alan Rusbridger ] Kodak never became a digital company, did it ?

[ Narrator ] The Biggest Story in the World is narrated by me Alex Kitovsky. It’s produced by Alana Chance…

Leave a Reply

Your email address will not be published. Required fields are marked *