THE CARBON WAR

28
The Winning of The Carbon War
I can see smiles of the faces of some of the renewable-energy practitioners
as I speak. They like this new way of making a default case for their technologies,
and business models, it seems.
Following me, van der Veer begins in English, before switching to Dutch.
He tells the audience how he and I are working together at the World Economic
Forum on one of their Global Agenda Councils. Together with a dozen or so
other people, under his chairmanship, we are weighing the possibility of “black
swan” events in modern energy markets.
It is true, counterintuitive as it may seem.
Black swans involve supposedly low-probability or barely conceivable
risks: “surprise” events that, if they happened in the real world, would have
huge negative consequences.
Van der Veer agrees with me that there is a lot of risk around in energy
markets today. There are plenty of potential black swans to worry about he says.
Yes, I think to myself, but some events that might be a “surprise” to some
are to others high-probability, or even near certainties. I am arguing precisely
this case, as best I can, at the moment in our World Economic Forum discussions.
I am in a minority, of course.
I wonder if Peter Voser would count the risk of a shale bubble as a black
swan. He fears “negative surprises” similar to his own humiliating asset write
off, and has not invested in British shale, the second most attractive national
shale target for at least one of his peers. It doesn’t sound, on that basis, as if
Shell would put shale on the black swan list.
Van der Veer is in a conciliatory mood. Jeremy & I may disagree if the glass
is half empty or half full, he volunteers, but we both agree the glass is too big.
He means we agree that too much fossil fuel is being burned, I suppose:
that there is a climate problem as a consequence.
He switches to Dutch, and I cannot follow further. But his slides show
me that he is talking about Shell’s two latest scenarios for the future. They are
called “Oceans” and “Mountains”, and they are well known to me. Like the
World Energy Congress scenarios for the future that I heard about in Korea,
one is awful (Oceans, a version of business as usual), and the other merely
very bad (Mountains, wherein gas replaces a lot of coal, and carbon capture
and storage is used at industrial scale for both coal and gas burning). Neither
comes close to delivering a world where global warming can stay anywhere
near a two degrees ceiling.