On Wednesday, Royal Dutch Shell CEO Ben van Beurden said that fossil fuels would still be the company’s main cash engines for decades to come.
Shell will indeed diversify from conventional fuels but the alternatives to oil, gas and liquefied natural gas (LNG) will remain relatively small as a proportion of company spending. Their development will have to be underpinned by earnings from fossil fuels, which would remain incredibly relevant.
The company will also need to keep investing in fossil fuels because it needs to keep them the strong cash engines that they currently are, until at least the 2030s. Van Beurden estimated that in the long run, decades from today, Shell’s LNG positions would still be there.
However, he underlined that whatever the company builds, it would better make sure that they are carbon competitive, they are the first quartile, can be decarbonized, and therefore still relevant in a world that hopefully by then is a net-zero world.
Regarding hydrogen, the CEO said that it is going to take a couple of decades to make it a significant business. The company’s priority in hydrogen would be on meeting heavy-duty road transport demand.
Shell’s current focus is the expansion of its new 10 MW electrolyzer at the Rheinland refinery, the establishment of a 200 MW electrolyzer in Rotterdam, as well as a third somewhere in Northern Europe, alongside further plans for facilities in California and China.
