Carl Mortished, World Business Editor
2 for 1 tickets to Singin' In The Rain, this coming Monday. Book now

World demand for oil and gas will outstrip supply within seven years,
according to Royal Dutch Shell.
The oil multinational is predicting that conventional supplies will not keep
pace with soaring population growth and the rapid pace of economic
development.
Jeroen van der Veer, Shell’s chief executive, said in an e-mail to the
company’s staff this week that output of conventional oil and gas was close
to peaking. He wrote: “Shell estimates that after 2015 supplies of
easy-to-access oil and gas will no longer keep up with demand.”
The boss of the world’s second-largest oil company forecast that, regardless
of government policy initiatives and investment in renewables, the world
would need more nuclear power and unconventional fossil fuels, such as oil
sands.
“Using more energy inevitably means emitting more CO2 at a time when climate
change has become a critical global issue,” he wrote.
Mr van der Veer is expected to discuss Shell’s energy outlook today at the
World Economic Forum in Davos.
In his e-mail, which was reported on RoyalDutchShellplc.com, an independent
website that monitors the company, Shell’s chief set out two scenarios for
the world’s energy future.
The first scenario, “Scramble”, envisages a mad dash by nations to secure
resources. With policymakers viewing energy as “a zero-sum game,” use of
domestic coal and biofuels accelerates.
It is a world, said the Shell chief, where “policymakers pay little attention
to energy consumption – until supplies run short.”
The alternative scenario, “Blue-prints”, envisages a world of political
cooperation between governments on efficiency standards and taxes, a
convergence of policies on emissions trading and local initiatives to
improve environmental performance of buildings.
Shell has not committed to either scenario. The oil company regularly uses
scenario-planning to test the likely impact of widely divergent economic and
political scenarios on its long-term strategy.
Unsurprisingly, Mr van der Veer indicated that Shell preferred the Blueprints
scenario but he expressed caution over the likelihood of it coming to pass
without a global approach to emissions trading.
The Blueprints scenario assumes that 90 per cent of CO2 is captured by coal
and gas power plants in developed countries by 2050, and at least half of
the CO2 emitted by power stations in the developing world. No such plants
are in operation today, noted the Shell chief. “It will be hard work and
there is little time,” he said.
Mr van der Veer’s comments emerged in the same week that the European
Commission launched reforms to its carbon trading system, with plans to
force power stations to buy permits to emit CO2.
In an acknowledgement of the challenge of securing global acceptance of the
need to curb carbon emissions, the Commission President, José Manuel
Barroso, said that the Commission would consider the possibility of taxing
imports into the EU by countries that failed to take equivalent measures to
curb carbon emissions.
Mr van der Veer’s prediction that the oil industry would soon struggle to
deliver sufficient conventional oil and gas to meet demand echoes growing
concern from other oil bosses.
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Look nuclear power, wind, water or bio fuel are not the answers. What we need is the worlds best scientific minds researching solar power. Right now we capture less than 10% of the suns energy on a solar panel. If we could capture 50% we could stick 2 panels on our roofs and have surplus energy....
Mike Murphy, Bel Air, USA
I find the wording in the quote interesting.
This is clearly a signal that Shell expects oil prices to go up in line with higher costs of extraction and lower supply of readily available reserves.
The CO2 emissions trading scenario seems unlikely given the current appetite for controls.
I think the wider question of restructuring the world economy with alternative power sources to fossil fuels is one that the oil companies need to look at given the timescales involved.
TP, Egham, UK
There are tens of thousands of big Jet transport aircraft flying today with an excellent safety record, yet there are multiple "major hull" crashes every year, despite the enormous efforts towards safety.
At the moment there are just a few hundred commercial Nuclear Power plants, yet two major accidents have occured, the "full monty" core meltdown at Chernoble, and a "near miss" at Three Mile Island (a partial core melt down actually, that very nearly became the full monty).
Mark my words, come the time when there are multiple thousands of Nuc Pwr Stations operational, THERE WILL BE a major MELT DOWN EVENT every year. And copme the time when there are tens of thousands operational, we will then experience many melt downs EVERY YEAR. Just simple statistics. Think about it, and then what about the ever present terrorism factor? Nuclear is OBVIOUSLY NOT THE ANSWER.
Greg Walters, Melbourne, Australia
And what about the carbon footprint from solar and wind. Some solar cells today produce more CO2 than what they will save in the lifetime of producing electricity. We have no problem accepting flyash coal waste of which half of it goes into leaky landfills which leach out heavy metals in our drinking water. Nuclear power is safe, environmentally friendly and the waste issue is a political issue. There is no problem storing it in salt mines or geologically stable mountains for 10000 years. The CO2 we are producing will linger far longer than 10000 years and the amount of nuclear waste is minscule and not much worse than the uranium ore it comes from which occurs naturally. They have to use robots in northern Canada to mine it because of its richness and this occurs in nature. It's coal and gas that is envirnomentally hazardous, not nuclear.
JJZ, Columbia, MD
The Nuclear lobby grows stronger all the time, sweeping away concerns about waste and completely ignoring the giant carbon footprint created by building and maintaining nuclear power stations.
It is already too late to expect nuclear power to be ready soon enough to replace fossil fuels. However, small scale power generation is possible now, using 'simple' methods. Who is stopping progress? Why, the vehicle construction giants, of course .... but you can bet their contingency plan is already in place, somewhere. What shall we do? Walk and keep warm with soup!
James Foster-Turner, Oxford, England, UK
Governments are in their own little bubble of contentment, which is only just starting to be pricked. Weak leadership and politics in thrall to commercial interests are to blame, rather than conspiracy. This can be proved by recent news re party funding, and policy blindness in the area of air travel expansion: a blind alley come peak oil, as there ain't no substitute for kerosene.
The answer: take responsibility by refusing to fly, and making sustainable purchases; and look out for another Churchill to lead us!
Oh, by the way, several analysts are saying peak oil will occur in 2012.
Robert De Mey, Maybole, Scotland
Climate change, an entire forst world existence based on oil, a world population explosion that up until 1800AD was below 1 billion, and now stands at 6 billion. We now work against our planet rather than with it and exponential growth in every sector is unfeasible. We need to accept that the "first world" will fall like so many great civilisations before it. Third world countries still live as the human race is supposed to live, and will survive. Although I'm not religious, I can't help but hear the words "and the meek shall inherit the Earth" ringing in my ears. Oil grows our food, transports our food and on eating it, provides the various medicines that assist us with heart disease, obesity, diabetes... the list goes on which is abhorrant. Only a small percentage of people will understand and accept what lies ahead and will prepare, the rest will die. The Earth will deal with us swiftly, so become aware and join those of us that understand. Denial stops here.
Kieran O'Donnell, Cambridge,
The full implications of the squeeze in oil supply are glossed over. The nations at present exporting oil are doing well economically, therefore their internal consumption is increasing rapidly. That means that the oil available for export will decrease at a greater rate than the overall decline. The lack of plain speaking by goverments on this issue is extremely scary. The recent moves on nuclear and on wind energy are at best tentative papering over the cracks. We require politicians who actually understand the gravity of the situation, and are prepared to risk their chances of re-election by introducing legislation to reduce our consumption, in line with our own reduction in production. Anything else leaves us at the mercy of the exporters. Recent events have shown that when push comes to shove, they will look after themselves first.
Dave, Dunoon, Scotland
Dave Beattie, Dunoon, Scotland
I am always intrigued by comments like Chris Osborn's in which motives are ascribed to a third party's statements or views. Surely, such comments say much more about the way in which the commentator's own mind works rather than that of the third party!
John Turnbull, Bourne End, UK
These multi-national companies are largely owned by pension schemes rather than individuals - so if they make bigger profits then we have more secure pensions.
Allan, London,
The industrial scale production of hydrogen to replace oil (and possibly gas) will require a massive increase in electricity generation.
Something like a threefold multiple on current UK output of 380 TWh per annum. That will require scores of new PWRs and the duplication of the supergrid and distribution network.
The investment in the hydrogen infrastructure and vehicles will take decades and also cost many billions.
The government and media are only just waking up to the scale of the engineering challenge.
Paul , cheshire, england
Water wars, oil wars (had a couple of those already), coal wars, tree wars ... But don't worry too much - the planet will kick us off long before we can completely destroy it.
Paul, Jo'burg SA
Paul, Joburg, South Africa
Most geologist had got there years ago. The world will not run out of energy sources but they will become increasingly expensive to win. If it costs a barrel oil to deliver a barrel then it's a zero sum game. At least it will start to make renewables attractive financially and there are still massive options out there to reduce consumption as well as totally rethink growth as the raison d'etre of our being on the planet. With two-thirds of the world still below subsistence level it's a scary prospect
Ray Cobbett, emsworth,
The world will see other wars similar to the invasion of Iraq to secure scarce energy resources.
Nick, London, UK
do i have to say anything!!!!!!!!!!!!!!!!!!the article speaks to a nightmare!!!!!!!!!!!!!!!!!!!!
john sproesser, WEST CAPE MAY, n.j.
Is this going to be a ugly preview of what is to come?
Isaac Azimov wrote that we haven't seen problems until
the earth's natural resources start to run out.
A chilling thought.
Jerry Scroggin, Phoenix, Arizona/USA
well comments like this will certainly help the price of oil rise even faster a nice little boost for his companies profits.I wonder what sort of bonus he is on ?
Chris Osborn, Maidstone, Kent