The climate crisis calls for oil companies to play a much more active role . They must do more to accelerate the energy transition, argue two former top Shell executives.
"If they don't adjust, who will?"
"I have no shame in having worked there," says Guus Kessler. "Shell provided energy that brought prosperity to the world," says the former Shell executive. As vice-president, he was in charge of project management. Together with Jelte Bosma, who was chief petroleum engineer in his last position at Shell, they want to send a signal that it is time for Shell to take its "moral and historical duty seriously" and "show more climate action".
Taken together, Bosma and Kessler have half a century of Shell experience. They worked all over the world. Kessler has since started his own company in energy transition (Darel). He leads transition projects with clients. Bosma, co-founder at Darel, leads the non-profit education branch, which has now taught more than 10,000 schoolchildren aged between 15 and 18 about the energy transition. The aim is to increase support for climate policy.
Former managers criticising Shell is sensitive. "We don't want to criticise or polarize, we actually want to encourage Shell," says Bosma. "Because if the big companies don't participate, we are not going to stop climate change. We need everyone. It is not a voluntary change, it is a crisis situation and that includes crisis management," Kessler said. The pair emphasised speaking in a personal capacity.
Leading role
The encouragement does not only apply to Shell. "For companies like ExxonMobil and BP, the same applies. The oil and gas sector should play a leading role in the energy transition. They should act as problem owners and take more action," Bosma says. "Companies like Shell are at the helm. If they don't adjust, who will?" Kessler: "That Shell says it is doing relatively better than its industry peers is nice, but it is not good enough. The climate instability that occurs when the earth warms more than 1.5 degrees is a global problem. It requires tough action from governments and companies. Shell can play a much more active role in this, preferably a leading one."
The pair believe that oil companies should take "genuine responsibility" to reduce not only their own CO2 emissions but also those of their customers, so-called scope 3 emissions. The courts think so too. In the 2021 ruling in a lawsuit brought against Shell by Milieudefensie, the court ruled that Shell must reduce its total CO2 emissions - as well as those of its customers - by 45 per cent by 2030.
Shell's appeal is due later this year. Kessler calls it "disappointing" if Shell has to be forced by the court to bring its policy in line with the climate agreements set in Paris. "Instead, Shell must show proactive leadership in making its products climate-neutral, just as the other oil companies must do."
However, Shell's new top executive Wael Sawan, who took over from Ben van Beurden in early 2023 , is charting a new course in which oil and gas extraction actually rises slightly again instead of falling. And higher efficiency requirements are being placed on renewable energy projects. That is the wrong mindset, Kessler believes: "You should invest much more in the transition, simply because you think it has to happen. The revenue model should not be leading, but following."
Safety priority one
Precisely Shell can do that, is Bosma and Kessler's belief. They sit down to explain. Memories of their first years of service at Shell come to mind. They quickly learned that safety was priority one in all circumstances. The mission was simple: no fatal accidents. This followed logically from one of the company's core values: do no harm to people.
It is still a guiding principle, according to Kessler, worldwide: "It is a prerequisite for doing business, with unconditional support from the top."Bosma: "As young employees, we had to get used to the absolute seriousness of this safety culture, but the strict enforcement soon made us feel that this concern was genuine."
Visitors to Shell offices or factories recognise the strict security measures, which sometimes seem excessive. Drivers do not start the car until everyone has their seatbelt on, and on the stairs visitors are ordered to grab the handrail. "That uncompromising policy stems from respect for employees and other stakeholders," Bosma says.
Do no harm for the climate
The unconditional focus on a safe work culture also lends itself as a blueprint for a similarly ambitious commitment to the energy transition, according to the pair. "We need to prevent irreversible climate damage. Here, too, you should apply the do no harm principle. Only in this case we are talking about the whole planet: people and the environment".
Safety came high on the oil sector's agenda after a fatal fire in 1988 on Occidental Petroleum's North Sea platform Piper Alpha . That killed 165 people. "We cannot wait for a Piper Alpha moment for the climate, because when the first really big climate catastrophes occur, we will have passed the tipping points and will be too late to intervene," says Kessler.
"Optimising financial returns seems to be the priority," Bosma observes. "For instance, the 'Nature Based Solutions' offered by Shell, such as planting trees, seem mainly a way to get marketing campaigns funded by customers. You might satisfy those customers, but it doesn't make any difference. In any case, reducing emission intensity has not yet led to reductions."
Economy gets priority
Shell recently made an investment decision on the 'Crux' gas field in Australia. The gas from this field contains about 12 per cent CO2. The gas will be processed at a floating liquefied gas plant called Prelude. "Despite all intentions to drastically reduce CO2 intensity and stop developing gas fields with a high CO2 content, the Shell board has approved this project without CO2 storage, "says Kessler. Bosma concludes that the climate seems to be on the back burner and that "economic interests take precedence".
With a CO2 price of around €90 per tonne, Crux would entail about €240 million a year in additional costs for buying CO2 allowances. At least, if the project were covered by the European emissions trading scheme. But in Australia, Shell pays nothing for these CO2 emissions. Bosma: "Emitting non priced additional CO2 from the Crux field generates a higher profit margin for Shell, and thus financial gain for shareholders. So the short-term economic gain outweighs the long-term risks to humanity."
Many Shell employees do want to
Shell can lead the way, according to former executives. The group is able to forge effective partnerships between governments and companies. According to Bosma, the multinational employs people with genuine concerns about the welfare of people and planet: "Shell employs a lot of people who want to be part of the solution. This is another reason why it is important to embrace the transition, so that the company makes full use of people's intrinsic motivation and talent. That helps Shell to remain competitive."
The pair call on Shell to embrace do no harm for all climate and environmental goals. "Not just with nice plans for a better world in 2050. But especially with hard targets and measures for now", Kessler said. The multinational should have carbon-neutral operations by 2030, and also reduce customer emissions to zero by 2040. By 2050, Shell could then have cleaned up all fossil plants and repaired historical environmental damage. "Shell has good intentions, but does not push sufficiently," Bosma argues. "Of course it is damned inconvenient, but there is no time to wait for the government or consumers. If Shell does not show more action of its own accord soon, it will soon be the dinosaur that does not survive."
They say the hard targets should be translated into strict conditions on new investments. "That will lead to creativity, innovation and in-depth investment in the energy transition." A good start, according to the pair, would be for Shell to immediately stop search for new oil and gas fields.
Shell response "Shell is investing in energy security for its customers as the company changes to be successful in a clean energy future. Our goal is clear: Shell wants to be a net-zero emissions energy company by 2050. We have the money, knowledge and expertise to ensure successful solutions are rolled out quickly and make an impact. We are investing heavily in biofuels, hydrogen, charging stations and CO2 capture and storage. No other company invests as much in the energy transition in the Netherlands as Shell. Here we are building Europe's largest green hydrogen plant, a biofuels plant, offshore wind farms, solar parks and a nationwide network of fast chargers for electric driving, among other things."
