Shell CEO: Energy efficiency, not clean power, is key

Shell CEO Peter Voser

Royal Dutch Shell CEO, Peter Voser, says energy efficiency technology is a must-have to help feed a world with a growing appetite for energy, but the same can’t be say for alternative energy sources such as wind and solar. Voser discussed his thoughts on the future of energy during a Churchill Club event near San Francisco on Wednesday night.

Voser said the world’s energy demand will triple by 2050 instead of double – as some have projected – if people don’t conserve energy and use it more efficiently. He cited China, along with the U.S., as examples of how the government is promoting policies to manage energy demand.

While he also mentioned China’s ambitious plan to increase its use of renewable energy such as wind and solar, he isn’t so bullish about the prospect of alternative sources playing a big role in meeting people’s energy needs. Voser said he hasn’t seen innovations that can speed up the adoption of wind and solar to make a significant dent in the global energy mix. Wind energy, for example, has been around for 30 years, yet its share of the energy market is tiny, he pointed out.

“From the innovation side, the key we need to work on is to shorten the delivery time to get to a sizable percent of the total energy market. We haven’t cracked it on the innovation side,” Voser said. He spoke mostly in generality and didn’t much hone in on what types of innovations should happen to boost clean energy use (and replace fossil fuels).

Shell has set up a venture capital fund that has invested in a variety of energy companies, which are mostly in oil and gas and a few in areas such as ocean power and building materials. The oil giant also is investing in carbon capture and sequestration demonstration projects in places such as Canada and Australia. Such technology remains expensive and risky, and there is no clear policy to make the investment worthwhile, Voser said.

He was pressed to name some “crazy big bets” that Silicon Valley should work on during a question-and-answer session. Though he declined to speak specifically about a particular source of renewable energy, he did say a breakthrough in storing electricity is key.

He was also non-committal in his view of electric cars. Asked whether he would ever buy one, he said that’s a possibility because he figured the world will offer up cars of many stripes, whether they are powered by gasoline, hybrid technology or electricity. “Why shouldn’t I drive an electric car? But, if the electricity in the U.S. predominantly comes from coal, then I’ll not buy one.”

But since he was speaking to a crowd with many people from Silicon Valley, Voser was keen to point out that Shell is big on investing in innovations.  When he became CEO in 2009, he said, he decided that the company would work more closely with startups with promising technologies and help commercialize them.

To illustrate that Shell is big on innovations in general, Voser cited the company’s joint technology development work on information technology with companies such as IBM. Shell also is working on R&D projects with Chinese oil and gas companies, he said.

“We are trying to use information technology in order to drive some of our innovations,” Voser said. Shell and IBM banded together in 2010 to develop a Linux supercomputer that Shell would use to do seismic and other analyses for oil and gas exploration.

But he also professed to have found it challenging to figure out how to work with startups in places such as Silicon Valley and not get bogged down on “figuring out who makes the biggest profit off of the IP.”

Photo courtesy of Shell

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