Ex-Shell boss says time "ripe" for oil majors to eye alternative energy

 
Jessica Morris
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Jeroen van der Veer, CEO of Royal Dutch/
Jeroen van der Veer headed Shell between 2004 and 2009 (Source: Getty)

The former boss of Royal Dutch Shell believes that the time is ripe for oil majors to invest in alternative energies.

Speaking in an exclusive interview with the World Energy Council's monthly magazine, Jeroen van der Veer, who headed Shell between 2004 and 2009, said: "I think we were too early once or twice [in the past]. But the time may be ripe now."

Shell's most recent annual report showed that it intends to invest in solar and wind energy projects in the future.

Van der Veer is also working on a report which will show a decline of oil in the global energy mix from 31 per cent now to well under 20 per cent in 2050.

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He explains there are two competing views regarding how this will affect oil companies such as Shell.

"The first is that as the new global business environment changes, this will offer opportunities for big energy companies to develop new forms of energy. Then you won't produce fossil fuels anymore at some point in the future."

"The second school says the mission of oil and gas companies is to produce oil and gas, and if this mission ends, then the companies end too.

"I belong to the first school."

Van der Veer addressed concerns that changes in the global energy landscape could one day writedown the value of companies' coal, oil and gas assets.

"I think there are many misconceptions about the idea of stranded assets," Van der Veer said.

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"That significant amounts of coal will have to stay under the ground, I can understand. And a country like Saudi Arabia, which has more than 100 years of oil in the ground, may also be concerned whether they can exploit all their resources."

"But the assets on the balance sheets of the international oil companies are resources they will develop over the next 20 years or so."

Governor of the Bank of England, Mark Carney, has previously warned such assets could be left "stranded" by efforts to combat climate change.

He said its effects tend to manifest after a political and business cycle of two to three years, meaning actors often have no direct incentive to tackle the issue.

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