Shell CEO says he’s trading in his diesel for an electric vehicle
Ben Van Beurden, chief executive officer of Royal Dutch Shell, one of the largest oil companies in the world, says when he gets a new car this September it will be a Mercedes S-Class 500e, a plug-in hybrid with a 13.3 kWh battery and an all-electric range of about 19 miles. Some of you will be laughing up your sleeves at this news. 19 miles of range? That hardly qualifies as an electric car at all! Hold your criticism for a minute and hear what Van Beurden has to say about his decision.
By Steve Hanley
Van Beurden’s current car is a diesel, so switching to a plug-in is pretty big news. Why not a Tesla Model S? Come on, he is the CEO of an oil company!
Getting on the electric vehicle band wagon
But he isn’t the lone electric driver in the C-Suite at Shell. Chief Financial Officer (CFO) Jessica Uhl already drives a BMW i3 fully electric vehicle.
“The whole move to electrify the economy, electrify mobility in places like northwest Europe, in the U.S., even in China, is a good thing. We need to be at a much higher degree of electric vehicle penetration — or hydrogen vehicles or gas vehicles — if we want to stay within the 2 degrees Celsius outcome.”
On Tuesday, Shell beat the expectations of stock analysts by reporting higher earnings than predicted after the company went through a round of cost cutting.
It says $50 a barrel oil is part of its new “lower forever mindset.”
Planning for the future
Changes in automotive technology, the fight against climate change, and slowing economic growth in China are reducing what was once the world’s ever increasing thirst for crude oil. Speculation in the energy industry has shifted from so-called peak oil — the idea that consumption will keep rising until the supply of fossil fuels dries up — to peak demand, when reserves considered valuable assets today wind up being left in the ground.
Shell says it plans to spend up to $1 billion a year on its New Energies division as it transitions from fossil fuels to more renewable power. It says there are business opportunities in hydrogen fuel cells and new biofuels for air travel, shipping, and heavy freight. With the current cost of batteries, those industries are not thought to be suitable for battery electric solutions — although, that calculus may change significantly in coming years.
Electric cars will outsell fossil fuel powered vehicles within two decades as battery prices plunge, according to Bloomberg New Energy Finance. Plug-in cars will account for a third of the global auto fleet by 2040 and displace about 8 million barrels a day of oil production. To put that into perspective, Saudi Arabia, the world’s biggest oil producer, supplies only 7 million barrels of oil today.
“We have to continue to reinvent,” Van Beurden says.
(Originally appeared at our sister-site, Gas2.)