Cleaning Up: Leadership in an Age of Climate Change

Is There A Future Without Oil & Gas? Ep214: Ben van Beurden

Episode Notes

Oil and gas companies lie at the heart of the energy transition. To some, they are heroes, continuing to power human progress despite all the odds. To some, they are villains, responsible for the climate change that is devastating our planet.

This week on Cleaning Up, Michael Liebreich interviews Ben van Beurden, former CEO of Shell from 2014 to 2023. The conversation explores the complexities of the energy transition, climate change, and the role of oil and gas companies in addressing global emissions.

Van Beurden argues that there's no silver bullet solution to climate change, emphasizing the need for multiple approaches and a holistic view of energy transformation. He believes oil and gas companies will play a crucial role in developing clean energy solutions and driving systemic change, but ultimately we must move away from polluting fossil fuels in pursuit of the prize of Clean Energy.

Leadership Circle:

Cleaning Up is supported by the Leadership Circle, and its founding members: Actis, Alcazar Energy, Davidson Kempner, EcoPragma Capital, EDP of Portugal, Eurelectric, the Gilardini Foundation, KKR, National Grid, Octopus Energy, Quadrature Climate Foundation, SDCL and Wärtsilä. For more information on the Leadership Circle, please visit https://www.cleaningup.live.

Discover more:

Episode 204, the Sierra Leone special: https://www.youtube.com/watch?v=z-5QjSfy2SM
Ep111: Daniel Yergin "The World's Most Influential Energy Analyst – https://youtu.be/8QIh4U3Vgjc
Ep86: From Climate Law Maker to Superglued Law Breaker – https://www.youtube.com/watch?v=iDo7hkcsRFA

Episode Transcription

Michael Liebreich

In a sense, the issue that I think we have to confront is that these are all great, but they're all marginal. And somebody could say, well, what he's really doing is like a magician. You know, he's doing the hand movement over here, which actually is distracting from the fact that over there he's running an oil and gas industry, or he's committed to the oil and gas and saying, 'No, it's not realistic not to, so you can do a bit of this. You can grow some trees. You can do ethanol in Brazil. Oh, there's a marvelous business that's collecting coffee grounds and turning them into something or or used cooking oil.' These are all utterly marginal compared to the main event.

Ben Van Beurden

The coffee grounds, maybe, but the other things aren't. There is no silver bullet, Michael, there is nothing like, 'Okay, fine. Let's just do away with all this old stuff that we have and just replace it with this thing here.' It doesn't exist. So therefore, unfortunately, we have to do a lot of things that are maybe in isolation, not enough, or not fast enough, or maybe even marginal, but we have to have all these solutions in order to make them add up to something that actually does make an impact.

Hello, I'm Michael Liebreich, and this is Cleaning Up. Like it or not, oil and gas companies lie at the heart of the energy transition. To some, they are heroes, continuing to power human progress despite all the odds. To some, they are villains, responsible for the climate change that is devastating our planet. In Europe, one name stands out above all others: Royal Dutch Shell, now Shell PLC. My guest today was CEO of Shell from 2014 to the beginning of 2023. Please welcome Ben van Beurden to Cleaning Up.

Ben, thank you so much for joining us here today on Cleaning Up.

BVB

Happy to be here, Michael.

Now we're going to start where we always do, which is by asking you to describe, in your own words, the short version of who you are and what you do.

BVB

Okay, well, Ben van Beurden, I'm a Dutch chemical engineer. I worked in Shell for actually, all my executive time, almost 40 years. I retired in 2023 and now I'm doing things that I really like. So still a little bit in energy. I am a senior advisor to KKR for their climate fund. But I'm also a bit at Mercedes Benz, I like cars. I'm at Barrick Mining. I like the extractive industry in general, its complexities, and I'm still in chemicals. I'm the chairman of Clarion.

Well, already there's stuff to unpack, because you said that you now do things that you like. We'll come back to whether you were doing things you liked when you were at Shell. But also we should say that when we first met, I was an advisor to Shell New Energy. That was the piece of Shell that was doing all of the clean energy stuff with Mark Gainsborough running it. He invited me to be an advisor. And we spent a great day, actually, more than once, I think, over in Rotterdam, and I was very, I will say, I was very impressed with your commitment. I mean, you showed up. Not just showed up, but you showed up, you dived in, and you spent the time and grappled with the issues.

BVB

It was, and still is, an essential part of the strategy.

Absolutely, and we should also note that KKR, you are senior advisor to their climate fund, and they are one of our Leadership Circle members that supports this show. I say that more for disclosure, not that it changes much in the conversation. What I'd like to do is, if we could start by talking about climate change, we'll talk about everything, but the subtitle here is leadership in an age of climate change. And I'd like to give you the opportunity to go on the record so there's no doubt. Is it real? Is it humans? Do we have to do anything about it? The kind of the basics, where are you on that?

BVB

Yeah, well, I think I've been on the record more than once before, Michael, that, first of all, yeah, I believe climate change is real. It's man made. I think there's actually very few people who now deny that climate change is a real thing, if anything, there may be people who still believe it's very tough to deal with, or there may be people who exploit it a little bit for populist reasons or whatever else. But I do think most people, also in our industry, by the way, have come around to the idea that this is a real thing that we need to deal with, because the risks that are involved in not dealing with it are huge. I mean, look at what is happening today, already climate disasters that we are witnessing. I think we all can see that we are making it harder and harder for nature to accommodate the number of people on this planet, you can see migration problems that have their root in climate change. And again, if you think a little bit further and look at what could be tipping points, then it becomes really scary. So I do think, yes, people embrace this as a problem. It is, as I said in a recent piece that I've written: it's a gravitational force that is inescapable, and I don't think there is a large body in society that is still pushing back on it.

Let's just unpack and go a little bit deeper in that, because you could believe all of those things, but still not think that that gravitational force is particularly strong. So in your industry, I have come across people who sort of say, 'okay, yeah, it's happening, and it's us, but it's not going to be as bad as they say. In fact, we can just adapt. And, we should move forwards in a pragmatic way,' which is sort of shorthand for filing it under, maybe deal with it as and when. So how bad could it get?

BVB

Well, I'm not a climate scientist, although I listen to plenty of them, and enough to make me really reflect deeply that this could be a bigger problem than a lot of people think. And of course, the challenge with these things, Michael, is that once it starts showing up as a real, serious problem, it's very, very hard to reverse. So there is a precautionary principle here as well, that you have to tackle. Of course, it could well be that we do all sorts of things that, with the benefit of hindsight, maybe were not all necessary. But, my goodness, if we get it wrong, it will actually be a bigger regret. So, and I think you know that there is, unfortunately, already a need for climate adaptation. So I'm not against, you know, let's adapt because we cannot deal with solving or pre-empting the problem. We will have to do both. We will have to adapt and we will have to deal with the effects of climate change, but at the same time, I think as much as we can, because we have lost so many years on this, we have to tackle the root causes of climate change, which are greenhouse gas emissions, whether you like it or not.

And I think what you said there: that by the time everybody's on board with action, it's already almost too late, that's definitely a big part of what motivates me in my work. Because, you know, I have an engineering systems dynamics background, and we build an asset, then we use an asset, but all the time the CO2 is building up in the atmosphere, and all the time the heat is building up in the oceans. And by the time we say, 'Oops, it's a problem,' you've just got the lag on a lag on a lag on a lag.

BVB

And you cannot undo it quickly anymore, so therefore you have to prevent it to the extent that you still can.

Okay. But then how do you then respond to those who say we need to do a handbrake stop. We have to do a handbrake turn, or an emergency stop, because the lags are so substantial and the science is so clear that we just can't continue the way we're going. And we can't turn the supertanker, so we have to run it into the reef almost.

BVB

Well, I think there are just practical problems with that, of course.

That's a terrible analogy I just came up with, given what's happening to reefs, but, but you know what I mean?

BVB

Yeah, we all know that the handbrake stop or the U-turn or whatever else is is not really available, and therefore we have to start doing the sensible things that may feel not enough and too late and everything else, but are nevertheless the things that we can do now in order to to deal with the challenges that we just described. There are no silver bullets. There may be a few things that can really make a bigger difference than what a lot of people think. I think of methane, for instance. If we would really tackle methane very, very aggressively, we could make a relatively near term impact,

And this would be leaks in methane, fugitive emissions etc

BVB

And also larger emissions that happen, unfortunately around assets. Methane is about 20% of the greenhouse gas emissions. It's about 30% of the historical emissions that we have created. And if you would really tackle it aggressively right now, we could mitigate climate change to the tune of at least half a degree. So that's not a silver bullet, but it gets pretty close with the arsenal that we have to deal with. The other thing is using nature. There is so much more we can do to harness nature, to absorb CO2 from the atmosphere. We don't have to wait for that. We can start doing that tomorrow. It's relatively cheap. Why don't we do this? Why don't we do more of it? So there are things that we can do that are not quite a handbrake, but are sensible to do near term, and that we are not doing enough of. But to just say: Stop flying, let's stop using steel, ;et's just stop driving cars. Let's just consume nothing anymore, etc. Is not realistic.

I was going to come back to the phrase that you used, 'not realistic.' Because there are degrees of realism, right? You can go on a stag, we can fly to a stag night in Vilnius or not. We can fly on holiday to the Maldives or not. We can drive a big car or we can not. We can switch to a heat pump on a green tariff today or not. So there are a lot more things that we can do and we should. What do you think is realistic and what is not realistic in your view?

BVB

Yeah, I think what it's a little bit like, how do we deal with this problem of climate change in general? And of course, it can very quickly become overwhelming, if you see the complexity, the scale of everything, et cetera. A lot of people don't really have a good inkling of that. A lot of people can't even make the distinction between electricity and energy, they think is all the same. And that's because our electricity bill is called our energy bill at home. So that is already one problem to overcome, the illiteracy that exists in very broad circles of society. But fundamentally it comes down to two things. It is basically reducing the emissions that we currently have, and secondly, taking CO2 out of the air. Now if you look at how you can reduce emissions from what we are currently doing, I think there are basically a few recipes that are working. So we can replace fossil energy in power generation with renewables. It is working more or less, both technically as well as commercially. We can introduce electric mobility, that is working more or less, both technically and economically. Can we push it harder? Yes. Should we push it harder? Absolutely? Will it solve the entire problem? No. If you would do everything that we could to deal with clean power and to deal with electric mobility, we will probably solve a third of the emissions. The other two thirds we need to have solutions for, and these solutions are going to be more electrification. They're going to be cleaner molecules — biofuels, hydrogen or whatever else — and are going to be carbon capture and storage, one way or other and of course, you can say, 'energy efficiency is important and foregoing demand is important.' All of these things are true as well, but they are not going to solve the entire problem. We have to deal with the three things that I just mentioned: electrification, clean molecules and carbon capture. And we have to take CO2 out of the air, because we will overshoot. We have waited too long. We cannot get to 1.5°C without an overshoot. So therefore we have to do all these things on top. Okay, shall we forgo the stag night in Vilnius, I'm all for it, but it's not going to be enough, I'm afraid.

Yes, I think that there's a number of things that you said there that definitely resonate, and there's a few that I'm going to come back and challenge. So yes, the scale of it is absolutely clear that most people don't realize that electricity is only 25% or whatever of their energy use, and a lot more of it. In fact, the big one in most people's lives is going to be heating in the northern latitudes, and transport of various sorts, especially flying. And everything else, sort of pales into relative insignificance. And in there, some industry and so on. Heating is an interesting one, because I fought a bit of a battle against the UK gas heating industry because they said all the good things about climate change, that it is tremendously important, and we've got to deal with it. But they also have spent money, and were caught spending money to 'try to spark outrage.' That was the brief that they gave to their PR company about heat pumps, and they were promoting hydrogen as a solution. And that, to me, is you're getting to the point where instead of saying, well, it's not realistic to say, well, people can't live without heat, I get it, it might not be realistic for everybody to buy a heat pump, particularly those are less well off, immediately, but to actually promote a fake solution, which is what they were caught doing, and continue to do, by the way, and continue to do that, feels like crossing some kind of really big threshold.

BVB

I agree with that. I can't comment on this specific example, because I'm not too deep into it, but I agree. But it also says two things, or one thing, at least, Michael, which is that these problems are really difficult to solve. Of course, space heating, there is a technical solution for it. We can insulate your house better, build better houses in the first place, of course, and apply heat pumps that are all going to be powered by green electricity. Simple as that. But now try to implement that. Think of the existing housing stock. Think of the entire electrical infrastructure that we're going to need. You said 25, I think it's more like 22% is electrical. We need to get to 60% plus electrical. Imagine what it is going to do for the infrastructure that we have to build, for all the permitting that is associated with it. And then think of who is going to pay for this? Who is going to afford it? Who is going to subsidize it? I'm doing a house up at the moment, and I said, 'Okay, let's try to get it as climate neutral as we can.' The bills are eye watering Now, fortunately, I can afford it, and I feel I have to afford it also to make a point, but I can feel how difficult it can be for people who do not have the means to quickly do this. And this is an old house, 100 years old, but that's most houses and most people. So these challenges are real, and we cannot, basically, put one pen stroke and say, 'well, it's solved now.' And the other point to your example is, yes, there are a lot of people who actually mine climate change and the solutions for climate change as a source of inspiration to get populist appeal out of it

I want to come back to where you say that we need molecules, because I look at it a little bit differently, as you'd expect, given what I do. We can clean up electricity with renewables. You mentioned, I actually would add nuclear to that mix, if we can do it affordably, or if we've already got it, so we can clean up electricity. And every country in the world is doing that. We can also clean up, or we can electrify, pretty much all land transport, the same with space heating. Even though it's hard, we will get there with electrification of heating. Again, not today, not tomorrow, but we have decades, and it's pretty clear that there is no house that you can't use either a heat pump, or resistive heating, or radiative heating or something. And we can do a lot of industry. There's a lot of industry which is low temperature, medium temperature. I've worked on high temperature heat pumps. I've worked on electrolysis processes for metal winning. There's all sorts of ways of electrifying. Even cement. The heat in cement making could become electric. So I look at the space for molecules — I mean clearly aviation and clearly shipping are going to be. I can't see how we get rid of molecules there, but I think I see it probably as a much smaller problem than you do.

BVB

Well, maybe. And I fully agree with you, and I definitely agree that aviation and shipping is going to be a lot more difficult to electrify, if not outright impossible in the near term, medium term even. But think of it also worldwide. How quickly do you think we will really electrify everything in Central Africa or in India, etc. That will take some time, even in this part of the world, where you think everything is, in principle, available. Think again of the amount of infrastructure that we will have to build in order to be able to electrify. You know, the current electrical system that we have taken us, what is it 150 years to build? We have to build three more in the next three decades. So you know, there's a limit to what it is you can do in terms of speed. In the meantime, what do you do? Sit on your hands and say, 'Don't worry, the electrical solution will come. So in the meantime, we can keep on using just ordinary fossil molecules.' We don't need all these new molecules because there's an electrical solution that will be down the road in a few years time. I don't think so. We have to work on molecular solutions, clean molecules right now, not only for the sectors that are impossible to electrify, or very hard to electrify, but also to deal with the transition. The more we can do right now, even if it is going to be a so-called stranded clean molecule, the better it is.

I'm glad you mentioned Central Africa, because that gives me the opportunity to plug an episode of Cleaning Up. Because together with my producer, Oscar, we went to Sierra Leone to look at a project that I had put into a neonatal intensive care unit. And we spent some time not in Central Africa, but in West Africa. And, you know, what was really interesting was it was a very difficult project to execute for all sorts of governance reasons. Building a system in a regional hospital in Africa, but doing it from West London, it's not easy, but it works. And the people there were thrilled with it. The nurses were thrilled with it. They're able to do their jobs and, in a way, for Central Africa or West Africa, or some of these countries, I'm actually reminded of East Germany when reunification happened, and none of them had telephones because it was impossible to get a telephone under the old communist regime. They didn't say, 'first, we build a network and have a landline, and then we're going to go to mobile phones after.' The people in East Germany, they went straight to mobile. They went straight to mobile, and they have a better system now than bits of West Germany.

BVB

Of course, and that will happen and should happen, of course. But the other thing you should not underestimate is how much and how deep the energy intensity is of the society we live in. Just a quick numerical example, if you like: typically a human expends about a gigajoule of useful energy in a year. If you are a manual laborer, you can do about a gigajoule of productive work. What we use in, say, the Western world, in Europe here, is about, per person, 150 gigajoules. So it is as if we have 150 helpers to keep up our lifestyle here. If you look at the US, that's actually 300 gigajoules, or twice as much. Japan is about 100. If you look at Africa, it's about five. So of course you can go from five to 10 and say, 'well, listen, we do this all in a very different way than another way.' But if you need to get to 100, which would be the sort of level at which you have a good, decent, long term, sustainable quality of life, I think you're looking at a different system, Michael. And then it's not anymore, the mobile phone analogy that applies. You will have to start looking at, 'how am I going to build a different society fundamentally,' rather than just focusing on access to energy, which is what you are talking about, which is incredibly important as a human right. But it's not necessarily the end game.

The example I love is if you look at, I think it's concrete, not cement. We have in the Western world, 15 tons of concrete per person that have been poured with reinforcing steel, with the emissions that have come out, making the cement for it, and so on. And in the Global South, it's one ton. And so in a way, they have a concrete deficit, which, as you say, it's their right. They have every right to the roads and to not having a dirt floor to sleep on, but having a nice house with a foundation, et cetera. So I hear you, I do think, by the way, that there's an element of primary energy fallacy there. Because if you go straight to an electric car, even if you have to have a car rather than public transport, you're going to use a quarter as much. And if you have an LED light bulb, and you leapfrog to that. And so probably even the Japanese level is not needed to have a fully modern lifestyle, that's my guess. But I'll concede absolutely that the scale of what we need to do is huge. And by the way, I think those people who say it'll just be battery, solar and batteries, look what happened in Pakistan, they had three gigawatts, they imported 22 gigawatts last year, they're going off grid. Fine. Run a factory, make steel, make cement. I think that I'm now, in a sense, making your point for you. However, you said things like we have to put clean molecules into the existing system. Is that carbon capture and storage, or how do you want to do that?

BVB

I think clean molecules, of course, are green molecules or blue molecules, or biomolecules.

So we need to just have an explainer. Blue molecules?

BVB

A blue molecule is basically a fossil molecule, but you have somehow captured the CO2 and sequester it in a safe place.

Ok, and green molecules?

BVB

A green molecule is a renewable molecule. You basically use renewables.

And pink?

BVB

And pink is nuclear. There's a full rainbow. And I do think that there is a space for these and, of course, much nearer to us at the moment and ready in terms of technological and commercial maturity, is biomolecules. And so I do believe we do need these molecules to decarbonize air traffic, to maybe decarbonize shipping as well, and more and more. I mean, look at Brazil. Brazil is a very successful country when it comes to the energy transition, in large part because they have flex fuel vehicles that can run 100% on ethanol, bioethanol. Now you can say, 'oh, bio ethanol is first generation, not as good as second generation, et cetera,' But nevertheless, they have a significantly lower carbon footprint for their personal mobility. So these things work and work right now, and we need more of it.

We're working around in a very elegant way to your time at Shell, because ethanol in Brazil was one of the areas that you're very involved in. The issue there is that it's great if you're Brazil and you grow sugar cane and ethanol from sugar. Actually, I don't know what the price is now, the oil price at which it's competitive. And of course, it's grown actually, not in the Amazon, it's grown miles away. So fine, I'll give you ethanol in Brazil. But what about ethanol in the US?

BVB

That's a different story, absolutely. And I don't think we should dissect that in great detail, because it becomes very technical and policy and political and everything else, but you could still argue that that actually is ethanol with a lower carbon footprint than its fossil equivalent. And it is you can, to a very large degree, also decarbonize that, because if you are able to capture the CO2 from sugar mills, and you sequester it, it actually has a pretty good carbon intensity compared to the alternatives. So I wouldn't discard it and say, 'oh, you know, it's biofuel, so it must be bad,' or 'it's corn ethanol, so it can't be good.' You can do an awful lot.

The issue with the corn ethanol, when you say it's lower carbon than fossil fuels, that's not true if you take into account the displacement of agricultural productivity into low productivity other land.

BVB

There's many ways of doing this that are marginal, and I agree with that, and that's why we never went into corn ethanol in the US. That's why we went to places like Brazil, where there is a clear advantage. But I'm not suggesting, by the way, that that is the only biofuel solution that we need. There are many other biofuel solutions that you can think of and take HEFA, for instance.

Sorry, HEFA, let's explain for the audience.

BVB

So this is basically hydrogenated esters and fatty acids. So it's basically animal waste or plant waste, and then you process it, then turn it into middle distillates, diesel, kerosene, etc.

In a sense, the issue that I think we have to confront is that these are all great, but they're all marginal. And somebody could say, 'Well, what he's really doing is like a magician.' You know, he's doing the hand movement over here, which actually is distracting from the fact that over there he's running an oil and gas industry, or he's committed to the oil and gas industry and saying, 'it's not realistic not to, so you can do a bit of this.' You can grow some trees. You can do ethanol in Brazil, we can have a discussion about waste. Oh, there's a marvelous business that's collecting coffee grounds and turning them into something, or used for cooking or... These are all utterly marginal compared to the main event.

BVB

The coffee grounds maybe, but the other things aren't. But I'm going back to another point that I made a bit earlier on in this discussion. There is no silver bullet, Michael, there is nothing like, Okay, fine, let's just do away with all this old stuff that we have and just replace it with this thing here. It doesn't exist. And so therefore, unfortunately, we have to do a lot of things that are maybe in isolation, not enough, or not fast enough, or maybe even marginal, but we have to have all these solutions in order to make them add up to something that actually does make an impact.

That's a good place to start talking about some of the other stakeholders that you were dealing with during your time at Shell, because I was working with Mark Gainsborough with Shell NewEnergies, and you've articulated pretty much what you were doing at the time, which I would say iskind of doing what what you could and what made sense. But it was two things. It was a relatively small part of your capital spend. I don't know what was the maximum of your total capex at Shell that you spent on these clean initiatives, but 5% 7% it was that order of magnitude. Number one. Number two: In the end, your investors vomited over it.

BVB

That's probably a little bit too extreme. I think the investors were actually quite a bit more nuanced than that type of reaction. And it changed over time. So if I look back on it now, I would say there was probably a hard core of, I don't know, 5% of investors who thought, you know, it was never enough that we did. And then maybe you could add to that another 15% of people who thought, 'well, let's go along with this, because it's good for my reputation as an investor.' If you are an insurance company, why not vote in sympathy with a climate resolution? Because you will look good for your insurance clients. And then there was probably another, and that peaked. I think the most objection we got was about 20% against our plans. And it's less now. Then it was probably about, I don't know, 10-20% of people who couldn't care less, who basically said the vomiting part, yeah, who basically said, 'Well, don't, don't bother.' Or, 'I understand that you have to spend some money on green washing, but please don't do too much. It's all wasted anyway.' Or, maybe more charitable, 'I don't think you're competent, so leave it to somebody else, et cetera.' But I think the vast majority, or the biggest group, more than half, thought, 'Okay, fine, if that's what you think, prove it to me.' And that was tough enough, because you had to educate a significant part of our investor base that we were not all about oil and gas, that we had competencies that mattered, and that you could make money with this. And I think we only partly succeeded in that. But I also do think that the investor base moved and thought, 'well, listen, I cannot put my head in the sand.' And indeed, climate change is real, and we do need solutions, and maybe we do need these people, and maybe these people can make money with it as well. Although I will always remain skeptical as an investor, and that's okay, that's the dynamic that you need to have. But I do think the needle moved partly because of what we did, partly because of what society did.

If you look at it today, you left in 2023, I think it was the first of January.

BVB

Yeah, first of January. 2023

So we're two and a half years later, and we're not going to talk about the current strategy. I have an open invitation to Wael to come on the show. And I hope he does take me up on that. But when you Ben, look back at what you did and what happened since, where, frankly, quite a lot of it got dismantled, even the relatively modest initiatives that were 5- 7% of the capex. You know, who was wrong? Were you wrong then to try? Or were they wrong? I have to do this without encouraging you to criticize management. But, you know, are you happy with what happened? Was it a kind of good experiment that didn't work out? Or, how do you see it?

BVB

I think, of course, a lot of things may not have worked out as they were conceived, or that we all wanted. I think many things did actually work out. And, this is not a linear activity where you just say, 'well, this is what I will do, make a blueprint, and I will press the button and it will go.' There is real experimentation in real life, with real society, with real customers, with real policy makers, with real geopolitical events and everything else that will determine whether you are going to succeed, yes or no. But I think the fundamental things that we did, and I wouldn't focus necessarily on the capex. That is a red herring, to be perfectly honest. You have to look at the impact that you make. So if you look at what are we accountable for as a company? And I say we, Shell, any company is accountable for its Scope 1 and 2 emissions. What we said is we're going to halve our Scope 1 and 2 emissions by 2030, with a 2016 reference year, and we are well on track to do that. We said we are going to reduce the intensity of the energy products that we sell, the carbon intensity, and we are well on track on that pathway to doing that. Now the first one, your Scope 1 and 2 emissions, so your own emission from your own facilities, and the electricity that you buy and everything else, you have a very, very high degree of control over. The second one, you're dependent on society. I mean, if people, simplistically speaking, turn up with a petrol car at your forecourt, you cannot fill it up with electricity. It's as simple as that. You're not going to give away electrical cars because you can sell them electricity instead of petrol. So in the end, and it's a bit silly to say this, but in the end, you are dependent on what it is that people are prepared to buy. Now we can have a massive role in influencing that, and we can work with others to influence policy makers to do the right thing. We can, whenever the policies are there, we can say, 'Fine, now we're going to put our money where our mouth is.' And we did all of that. Did it work out as much as we, very ambitiously, had thought? No, but it did for nobody, to be perfectly honest, Michael, because indeed, things have a way of making roundabouts and meeting potholes in the road and everything else. But if you look at what we have done is massively high graded the portfolio away from carbon intensive assets. We have a whole lot more gas in the mix, which is absolutely essential for the climate problem as well, called the gas switching. We did build a biofuels business. We are the largest investor in hydrogen. Okay, you may have issues with it, but still we are. We have created, over time, a much deeper understanding in our own company about what it is that we can do. How you look at the economics of these things? How you deal because of capital challenges and everything else. So I do think we are a fundamentally different company. Did all the plans that I conceived in 2016-17 work out as planned? No, but I never expected that to be the case.

You raised one question, which is the cost of capital, and that's something I've been mulling over and thinking about, because you have a certain cost of capital. As an oil and gas company, you've got investors who have certain expectations. Essentially, they don't mind risk. They know that these companies are incredibly good at managing risk but they expect, when there's good times, they expect very high returns. And that's who they are. And that's so different from a utility investor that says, 'Look, I don't care if you only can earn a few percent a year risk free, you earn 5 or 6% as long as you do that every year.' Is it actually realistic to think of oil and gas companies transitioning? Because if I step back from the day to day where we are today, fundamentally, what you're saying is: I believe climate change exists, and it's a real problem, and we transition so at some point the world is hopefully, according to you, if you're really honest about that, hopefully we're in a world where there isn't unabated oil and gas being burned, correct? So that means you're out of those core businesses, maybe a bit of abated, but they're smaller. You're out of it, right? And then the question is, do those companies still exist, or do they not exist?

BVB

Let me address the cost of capital issue and it and in the meantime, deal also with your challenge on capex. So you're absolutely right. If I talk to my investors, I could always say, 'Listen, I have this fantastic deepwater project in the Gulf of Mexico, 25% IRR.' And they would say, 'How many more of those do you have?' And I would say, 'a whole pipeline of stuff, et cetera.' It actually missed a few points, which is that for every successful project that I did, I had two projects that had failed. I would never talk about those poor exploration results or appraisals that didn't work out. We abandoned the project halfway through development and everything else. So first of all, every successful project with its 25% IRR as an example, needs to be burdened with the ones that didn't work out. Secondly, most of the projects that I sanctioned, I sanctioned at a time that about a quarter or a third of the capital was already spent. That's just the nature of this business. If you look at your exploration costs, your appraisal costs, your development costs, by the time you are going to say I'm sanctioning this project, you've spent an awful lot of it already. So the forward looking economics on the projects that were successful was always going to look great, but if you look at the returns of the entire business portfolio, it's a different story. That's point number one. Point number two, I'm going to make three points. Point number two, if you look at renewables, you don't have that challenge. Typically, you develop, if you want to develop, a renewable asset, generating renewable electricity. Mostly, you basically make all your decisions right up front. Because often you bid on a tender. You're not going to have a tremendous amount of development costs. You take a punt, in most cases. Secondly, you don't have resource risk. There are very, very few wind farms built in a place where there's no wind, and the same is true for solar, yeah, so you have a different risk and return expectation issue there. And thirdly, to your capital point. I think in many cases, it does make sense for people with a much lower cost of capital to come in behind the developer and to just say, 'well, listen, now that the development risk is out of the way. Can I please take a test from you? I only need to have a 5% return on it. If you can please take the electrons away and deal with the commodity risk and all the complications of bringing it to market, then I'm perfectly happy to just be a silent investor in the asset.' And that basically means that now you have to find a role for yourself as well to develop these assets, to take the commodity exposure, to do all the complex things with customers and load balancing and optimization and trading around it and everything else, and you can actually make a reasonably decent business out of it that actually approximates or even exceeds your traditional oil and gas business.

That is essentially the Orsted strategy right, which is a former oil and gas company that has become a developer, continues to own many assets, but also farms down a bunch of assets. And in fact, I went on to be an advisor to Equinor, and Equinor did a very good business farming down some assets when the farming down was good. But those businesses are now not seen at the moment, by Wall Street or by investors, as good businesses?

BVB

Yeah, no. And partly, that is because the inflation kicked in where everybody at the time thought that costs would only come down. Things will get cheaper. They will get bigger economies of scale and everything else that actually reversed with the war. And secondly, interest rates went up.

So there is a world, if I understood right, where Shell or the oil and gas companies, not to be specific about one, could turn themselves into, essentially, project developers of clean energy projects. There is a long-term survival, rather than a kind of we'll keep the lights on until you don't need us anymore, and then, boom, we're gone.

BVB

And a marketer of these electrons as well, People often forgot, and I had to remind many of our investors, who would say, 'Listen, what do you guys know about electricity really?' So stay away from it.

Ben, I think I asked you that question myself back in the day.

BVB

And I would say, 'well, listen, did you know that we are the second largest power trader in the United States?' No, never thought about that. So it's not as if we are without competency. Do you know how many customers we have? Do you know how many customers actually want to have integrated solutions between power, gas and other solutions? So it's that part where we have a lot of competencies — when I say 'we' I mean Shell — that are relevant and can be brought to bear, and actually that are needed for the energy transition to succeed.

Ben, there's another aspect of your time as CEO of Shell that I want to ask you about, which is activists, because Shell appears, as far as I can see from the outside, to attract a disproportionate level of scrutiny and demonstrations and so on. And in fact, we had Farhana Yamin on this show, on Cleaning Up, and she's the climate lawyer who stuck herself to your front doors, and I think it was during your time as CEO. How does it feel to be leading an organization? And I'm going to give you the benefit of the doubt, or I'm going to give you credit actually, for trying your best to resolve these very, very difficult trade offs, and yet you're getting this vitriolic stream of attention, some of it quite threatening, I suspect. Let me ask you in a neutral way. How did it feel?

BVB

Well, let me not go into the specific details of how did it feel. Let me just say two things about it. Partly, it comes with the territory, and unfortunately I think it was probably a whole lot more problematic for my children, who also got, of course, confronted with it at schools and by teachers and everything else. But yeah, you know, why do we get that sort of attention? And is it justified and everything else? Gosh, I can say two things, maybe three things about it. First of all, maybe a little bit flippantly, it's the power of the brand. We have a fantastic brand, and that also has another side of the coin. So people come to Shell to voice their grievances, because it's a very recognizable oil and gas stroke energy company. Secondly, I would say it happens more in Europe, because there is, I think, more activism and more climate awareness and more mobilization of that in Europe that is just, that's just a reality, societal reality. And thirdly, which I actually take as a compliment. They come to this because they know that people most probably engage and do something about it as well, which we always have. So there's an example function. You don't go to, wouldn't go to Russia, the Middle East, etc, because you will not get a reaction. From us, you get a reaction. You get movement. And partly it helps, of course, with raising the profile of the activist organization, and partly it helps to raise the profile of, 'you see, things can be done. We can make a difference.' So you can also look at it in that more sort of charitable way. You can take it almost as a compliment, that people come to you because you matter, and you're seen to matter and to do something about things.

But you also lost a big lawsuit. Right? The Urgenda...

BVB

No, that was the government, the Milieudefensie.

Yes, sorry, I'm mixing up my lawfare, my lawsuit, but you lost and moved out the head office moved out of the Netherlands because the lawsuit, which went all the way to the Supreme Court, said,

BVB

Not yet the supreme court, but it got overturned.

Okay, so you can tell that I'm not prepped on this one on the detail, but nevertheless, you used to be this strange joint Anglo-Dutch structure, and now it's just the UK. That lawsuit has succeeded in a way to, I mean, it must have raised your costs. It must have disrupted your relationships with all sorts — whether it's the Dutch government or Dutch investors.

BVB

Let me first of all say it wasn't the only reason why we left the Netherlands. We also had a few other issues that needed to be resolved, that had to do with dividend withholding tax, but which was a long standing issue. But you're right, you can say this was a massive contributing factor to our decision to leave the Netherlands, and partly it was because we thought we basically had lost legal certainty in the Netherlands. It first of all started to, in my mind, affect the functioning of Trias Politica in the Netherlands, so judges and regulators and executors that basically got mixed up. It had a legal theory that brought the verdict that, in my mind, was not necessarily spurious, it was allowed under Dutch law. It was an open norm principle that is unique for Continental Europe, and maybe even more so in the Netherlands, that in the end, if you looked at it, you thought, well, you know, on this principle, we can be convicted of anything, because it essentially comes down, very simplistically speaking, is that a judge can rule what they think is almost in line with public opinion. Well, if the public opinion is mobilized against you, then you can expect any verdict. Will it, in the end, get overturned? Yes, it did in this case. And you would imagine that it will also stand up in the Supreme Court. Let's just wait and see how that will go. But you can do without this nonsense, to be perfectly honest. Because again, the legal theory, the basis for this claim was totally spurious in my mind, because we had done nothing legally wrong. As a matter of fact, the thing that was being claimed for us to do, namely, cut our emissions by 45%, we were doing. So how could you be convicted of something that you are doing? But of course, all this sort of nitty gritty detail gets lost. It was more like 'ah, Shell got a black eye and they deserved one, and blah, blah, blah.' And I think in the end, these things in my mind, do more damage than they actually help. And because many companies will probably retreat, will not do what they are supposed to do, will be wary of the risks that I run, will stay clear of certain jurisdictions. It doesn't help Europe. So I think we need to call it out for what it is. It's essentially another form of greenwashing. But the inverse of it.

There are thousands of lawsuits. That was a very high profile one in Europe, in Holland. And in Europe, we've just seen one where a Peruvian farmer sued RWE and lost. But each time there's a lawsuit, there is disclosure, there are resources. Your lawyers are not cheap, I suspect, at Shell. And does climate lawfare therefore work?

BVB

Well, it depends how you define working. If you want to take a very charitable approach on this, Michael, you could say it has a role and has a function. It raises societal awareness and it will have a debate, and there will be also people saying, 'isn't this a bit silly, but maybe now that I think about it, maybe I should also reflect on my own behavior, and maybe we should do something.' So in that sense, I think noise is actually positive if you want to mobilize society, which is absolutely needed for the energy transition, and arguably one of the biggest obstacles for the energy transition at this point in time. You can say any form of noise is probably a good thing in the bigger scheme of things. But does it really make a difference? Do you really think that in the end, as we got then sort of told, not only reduce your own emissions by 45% but actually the emissions of your customers by 45%. The only realistic way of reducing your customer emissions is to reduce your customers. So is that going to work? Will we then shut down 45% of our retail stations and airports and bunkering stations around the world. Will that really help climate change? I don't think so. But that argument, of course, is so much harder to make than to just say, 'Well, it's the fossil fuel companies who are spoiling this earth.'

It does raise a question, which is in the background of quite a bit of our conversation, which is 'who's actually responsible for emissions?' Because you could say, in the case of RWE, this recent case, you could say, 'well, it was the German government that let them build the coal fired power station.' You could argue it's the German consumer that used the coal fired power. You could argue that it was...There's just a whole chain of different people. In the case of Shell you've already said, 'are you going to not fill people's cars?' Well, you could say, 'it's still your fault or you have a responsibility for not doing more to get them on to a clean alternative,; or for not influencing the government in this way or that. So who's really responsible for emissions is a question.

BVB

Now you're getting to it. I think if you want to really find the one with the smoking gun on this, I think you're on a fool's errand, because many of the issues that we are talking about here are systems issues, and therefore you have to look at the system that is evolving over time that actually now does need to be reformed. So I always like to talk about aviation. It's a simple example. Who is responsible for emissions in aviation? Is it the oil companies who supply the kerosene? Is it the airlines who actually burn it? Is it the people who make the planes and the engines? Is it the tourists that go there? Is it the airports that actually facilitate all of this? Is it the government that doesn't regulate it. And you know, in a way it's a futile discussion, in my mind, Michael. Because if you want to solve the problem, which, of course, should be the purpose of having this discussion, the only way you're going to solve it is by bringing this ecosystem together and say: How are we going to move on from what we currently have to what would be better? And then you need everybody around the table to agree, first of all, what is the best way of doing it, and then to figure out what sort of regulations, what sort of mechanisms, what sort of investment levels, what sort of other commitments and everything else do we need to put in place? And you can't do that if the only way you're going to engage in this discussion is to say, 'Whose problem is it or who caused it.'

I always object when you see these figures that say there's 100 companies in the world that are responsible for 71% of emissions. And I think that's absurd, because we're all responsible. I'm responsible. You're responsible. As a consumer, the people. In fact, you know when you see these Extinction Rebellion protesters protesting away, and then they go back to their home where they haven't installed a heat pump and they're not on a green tariff, even though they're, frankly, many of them, very middle class and able to afford that. So they're responsible, but there are people who have more agency than others.

BVB

And the first ones, in my mind, that come to my mind are the companies that I'm involved with. So indeed, there is more agency from, say, a fuel providing company or an oil and gas company or whatever, to just say, 'Listen, we are part of this system. We have a role to play in it. I'm not going to hang back and let the system reform itself.' And if I have to supply something else, I'll supply something else, I am actually going to be engaged in the dialog to find the solution. Because, guess what? Quite often, we have the best thinkers in many of these setups, or we have spent the most time worrying about it, because we were the original sinners. We were attacked first. So therefore we had to think, what are we going to do about this? And therefore we do have a role to play, not only in acting when it's demanded of us and the solutions are there, but also in formulating the pathways to a solution.

Absolutely. I want to just in a sense, we covered what's going on now, the need for change, what it might look like. We then went fast forward 20 years. You know, will there be oil companies in the future? I want to come all the way back to today, this moment in history. So this moment in history, you've got President Trump, and he is kicking bricks out of the foundations of the clean transition, the clean economy, everything that has been built over the last 20 years that I've been, as an observer and a commentator and analyst, following. He's kicking those bricks out very aggressively, and it's welcomed by a lot of your former colleagues in oil and gas. There's a sense of finally, we can get back to business. Some of your former colleagues feel that way. I know, and certainly I've been to the Gulf, definitely, there's a feeling there of like, 'Okay, now we don't have to pretend anymore. We're just going to do oil and gas.' Not everybody, but it's very widespread. And you've written a piece called 'Don't be distracted. Keep an eye on the prize.' And I could be sort of cheeky and say Dan Yergin' use of the word 'The Prize' is oil and gas dominance. That's the prize. So don't be distracted. Keep an eye on oil and gas dominance. Is that what you meant by that piece?

BVB

No, I think... First of all, yeah, there is a lot going on. And a lot of it, I think, is very mixed. I do actually believe that removing some of the permitting obstacles and everything else must be positive as well. And bringing more LNG to the world is a positive force, and to just say, 'let's not do it, because all these people in Pakistan don't need it is, of course, is highly hypocritical.' So actually relaxing some parts of the system that were needlessly choked up, I think is a good thing. Doing away with very, very sensible regulation that is being threatened at the moment, I think will be a regret. And I think the industry will probably come to regret it as well, because there will always be a counter force. And at some point in time, people just say, we lost again a lot of time, who is to blame? Well, it must be the oil and gas industry. They were advocating for this and I think the more responsible and sophisticated players, Michael, even though I don't speak with them every week anymore, they recognize this, and think this is not a good idea. Ultimately, the pendulum will swing, and we're better off progressing this energy transition, because it is a gravitational force that can't be resisted anymore. Now, the point that I wanted to make for the prize is not so much, how do you deal with all the complexities and the turbulence and everything else that is going on in the world today? The real prize is what is happening in the energy transition. And earlier on, we talked about three megatrends that are the result of the energy transition, which is more electrification of demand, it is cleaner molecules, and it is carbon capture and storage. These things are inevitable next to green electricity. And they're all areas where I think there are fantastic adjacencies for oil and gas players to play in, and that is going to be the biggest growth in the energy story for this century. So why on earth would you not focus on that? I'm not saying it's easy and you should rush into it, and now everybody should invest in all these things, because it must happen, and therefore it will be good. No, you have to be very careful how you make sense and make economic and commercial sense out of it. But the big prize is what is going to come. And the energy transition is not necessarily just oil and gas anymore. And that's what I mean by this: the big story is yet to come.

So the prize is really winning the transition.

BVB

exactly,

Still winning. So that would be an interesting one for Dan Yergin, who thinks the prize is oil and gas. And you're saying that the prize is, actually...

BVB

Dan is quite a sophisticated thinker, but indeed, the oil and gas industry is, of course, a very interesting industry to write about.

Dan, by the way, has been a guest on the show, and I was very honored that he came on the show. And we actually had a fantastic conversation. He's a hero of mine, because he was a pioneer in the information space, and I learned a lot from him. One question in the detail... The administration in the US is very big on nuclear, but also on geothermal. Do you regret not doing more on geothermal? Because that was something that slightly mystified me, given the skills that Shell has and had when I was an advisor. And given your perspective on what you now call the prize, why didn't you do more? Why didn't you dive in? You could be dominant in that space?

BVB

Well yes, and we did look at it many times, and always decided against it. Geothermal is not without geological risks, either, Michael. There are a few technologies that may now look better, taking advantage of modern technologies like fracking and everything else.

And geothermal closed loop, I'm going to say, because I'm an advisor to Eavor, the closed loop provider, we would say that we have managed the risks. But you shouldn't be scared of risks?

BVB

No, but then again, how much upside do you have in geothermal when, of course, you have to bear in mind, geothermal produces electricity, and that's a different type of commodity than the oil and gas commodity.

And heat, the heat that you say you need these very expensive green molecules and hydrogen for.Some of that could be done by geothermal.

BVB

But then if you look at the sort of commercial realities and just say: Okay, how much this venture, how much money do I need to put in it? How am I going to monetize the commodity that I produce, which is heat? What sort of upside can I have? How is this going to play out? It is actually not as good as oil and gas. And if you are constrained on the geological resources that you have, I mean human resources that you have, where are you going to put your reservoir engineer to work? On finding a good oil and gas resource somewhere, or to find a good heat resource somewhere? And typically, what's the analysis? Always it's very simple. If you have these people working on oil and gas resources, they will generate more value over time than when you have them focusing on geothermal resources. You can say, 'Well, why not recruit a whole lot more geotechnical resources,' but okay, we didn't have that.

If you were still running an oil and gas major and you were invited to the White House, would you be going there and explaining about the how you'd assigned your engineers and how many new prospects you've got, like you used to do with your investors, tell them about the 25% IRR fantastic oil and gas. Or would you be sitting quietly in the background, trying not to attract attention whilst keeping your eye on the prize of the transition?

BVB

That's a tricky one, Michael, for the exact reasons why you asked the question. I think in the end, no, if you would just approach it with an open mind, I do think it is important to bring honesty and truth into the dialogue. And the problem is that many of the climate change or energy dialogs are polarized. People believe it either needs to be this or it needs to be that. It can't be in between and everything else. If you forget oil and gas and only invest in green stuff, you will destroy the economy, or there will not be support from people who cannot afford all this greenery and whatever else. And in reality, that's not the case. I'm sure that this wouldn't go down very well as an example, but look at China. China used to be not exactly blessed with a lot of oil and gas resources. It had a lot of coal and it had a basically coal-fired economy, and at some point in time they decided that they wanted to be an electrical superpower. You did a podcast on that as well. And look how successful they have been. Have they impoverished themselves in the process? I don't think so. As a matter of fact, many of the trade issues that we are currently talking about and battling with are because they are so successful and so dominant in this space. So look at it as an example. These things are not necessarily either or. They can be and they are hugely complimentary, and therefore we have to embrace the fact that they will inevitably come. We better prepare for it. We better be successful in executing themselves. But it doesn't mean that we are now witnessing a Kodak moment for the oil and gas industry. The oil and gas industry will continue to be relevant. We will have to invest in oil and gas simply because decline rates in supply are so much higher than the decline rate in demand. Even if you were looking and aiming and successfully working towards a net zero scenario, you would still have to invest in new oil and gas because we run out of it all the time, and if we don't, we basically go back to things like coal, which doesn't run out and doesn't need investment. So I think you know, we have to be a whole lot more nuanced. We have to understand that all these things can coexist, that you have to take a holistic view. And if you want to approach these things on simple beliefs or almost religious beliefs, which you sometimes see, you basically make huge miscalculations that you would only see with the benefit of hindsight.

I think if I were to try to summarize where I see the dilemma, it's the difference between saying: we'll go as fast as we can into the transition and use fossil oil and gas, principally, hopefully not coal, to kind of fill in the gaps while we're on that route. Or do we just accept the: well, there's not much you can do, we're stuck with a fossil economy, so we'll do some clean on the side. And I think those are the two perspectives that are battling a little bit, maybe not within your mind, but out there in the world.

BVB

Yeah, exactly, but I think, you do as much as you can, but very importantly, we haven't really talked about it enough in my mind, Michael, the energy transition is not a supply problem. The energy transition is a demand problem. And in the end, supply follows demand to a very large degree. So therefore, if you want to, for electricity, which a lot of people think is the energy transition, they think it's basically making clean electricity, isn't it? It's a different story because the electricity demand was already there. Now we may have a different type of supply. Rather than fossil supply, we have green supply. But if you really want to look at the energy transition in a bigger picture sense, many of the challenges that remain are going to be: I use molecules, now I have to use electrons. How on earth am I going to do that?

But there are a lot of people that would say that supply creates its own demand, and supply creates its demand when it owns the political system, and it does

BVB

And there's an element of truth in that. And I think the bigger and the better companies and more progressive companies recognize that as a systems challenge as well. And therefore they insert themselves in the debate about, how are we going to reform the system? The problem is, they're probably a bit too late with that, and they probably have a little bit of a history of being suspicious, and they get a lot of pushback, and therefore many of them think, 'Well, okay, fine, I'll just do my own thing and I'll ;wake up again when I'm being called to do something else.' But I do think the better companies and I reckon my old company is among those, actually are agents for change.

I was going to jump in and say, they recognize the need for systems change, but not to the extent that they stopped buying politicians and they've stopped trying to influence it for their own short term benefit. Maybe not your old company, but there's many out there.

BVB

Oh, I'm sure there are. There are many out there.

Actually another example, which is just before COP28 in Dubai, some journalists uncovered this very interesting fact. Saudi Arabia has a website, and it's called the sustainable oil initiative in English, but in Arabic it's the sustainable oil demand initiative. And what it's actually doing is telling countries in the Global South that people should have cars and they should be internal combustion cars, and that aviation, even supersonic aviation, is the direction of travel, and it's all about sustainable demand for oil. Now, to me, that feels kind of wrong.

BVB

Let me be careful how I comment on something that I'm not entirely familiar with, and apologies for not having picked that up. But again, in my mind, you're getting, in a way, to the heart of the problem. We need to figure out how we reform the demand for energy. And we need to reform that demand for energy away from fossil energy. It's as simple as that, because otherwise we're never going to reduce emissions unless you do have a carbon capture solution or whatever else. In some cases, it is actually quite a valid solution. But, yeah, cars, planes, ships, you can't do carbon capture on very easily, so therefore you have to replace it with something else. In my mind, that is just a fundamental truism of the energy transition, and we have to, again, put everything in place from innovation to regulatory tools and carbon pricing or whatever it is to make that happen. And I do think companies have a role to play there as well.

You've mentioned carbon capture a few times, and you call it a valid solution and part of the toolkit and so on, but Shell has failed to scale up carbon capture and storage. And it hasn't happened. It's been decades and decades and billions and billions spent. Where's the evidence that — particularly post combustion carbon capture at the tailpipe of a gas fired power station or a coal fired power station — where's the evidence that that can actually work?

BVB

I think there's plenty of places where the evidence is there. It's too small, and indeed, it took too long. And there's all sorts of examples that you can point at where it didn't work out for political, economical reasons. There was not enough sort of a price of carbon to make it economical, et cetera. The business model is kind of challenging, of course, but there are quite a few assets that do have very large scale carbon capture and storage facilities on them. We have assets in Canada. We have assets in Australia. We're building assets in Norway. We're building assets in the North Sea. We're developing more assets around the world. So it is happening? Is it enough? No, absolutely not. I think off the top of my head, I would say we probably do about 50 million tons of carbon capture and storage. But now look at it in a different way. Michael, if you really believe in net zero, we need to do 6000 tons of carbon capture and storage in 2050 so that is a scale up, but more than a factor 100. So the need is there. So we need to find a way to make it happen.

That's if we don't aggressively switch to clean supply.

BVB

No, no, that is with aggressive switching to clean supply, you are still left with and this is the IEA Net Zero scenario, which is very aggressive switching.

Well, we haven't spoken about whether net zero 2050, is at all realistic, or ever was, which is a separate conversation. But the IEA has always essentially said, we're going to do — they're juggling between the needs of oil producing countries, oil importing countries, oil and gas companies, the civic society and so on. And carbon capture has always been a sort of fiddle factor for them, a fill factor. And of course, the number is big because they assume no radical action or no discontinuous action. And they've been wrong on the supply side with the estimates of solar and wind. And they've been just as wrong on the demand side as well, AI data centers, for instance.

BVB

So maybe the IEA scenarios are wrong, but let's then talk about scenarios. Who could be right, which are the Shell scenarios. But joking aside, I mean, we have looked at many, many different scenarios for the future, including, by the way, AI scenarios. But you can clearly demonstrate there is no way you are going to be successful, or at least partly successful, in the energy transition without significant growth in carbon capture and storage. And I don't think there's anybody also in the IPCC that would say, 'no, we don't need all this stuff.' And the same is actually true for nature based solutions, which is another way of carbon capture and storage. Through nature, and of course, getting it out, out of the ambient air. The problem with these things is it is a new technology that's been pushed by oil and gas companies. And therefore there must be wrong, and therefore it must be greenwashing, or it must be a distraction, or whatever else. And in many discussions also with activists they would say, 'we actually agree with you on carbon capture and storage. We even agree with you on nature based solutions.' But people never admit it, because it comes from you. And this is, in my mind, again, the challenge that we are facing. Not only is it technically possible, it is commercially challenging, but it is societally still being made suspicious. Ultimately, I think all these things will fall away, because at some point in time, people will wake up. We don't really have other solutions in the toolkit that can replace it.

Ben, it's an enormous pleasure having you on the show. Thank you so much for coming along today, for engaging, giving us the benefit of your perspective, and I wish you luck in all of your new transition-related great prize endeavors.

BVB

Thank you very much. Michael, it was fun to do,

Thank you.

So that was Ben van Beurden, CEO of Shell from 2014 until early 2023, and now with a range of roles across transport and energy. As always, we'll put links in the show notes to episodes that we mentioned during our conversation. So that's episode 86 with Farhana Yamin, the activist lawyer. Episode 111 with Dan Yergin, founder of CERA week and author of The Prize. And also episode 204 on the solar system that we put into the neonatal unit in Sierra Leone. And with that, I'd like to thank our producer, Oscar Boyd, our video editor, Jamie Oliver, the team behind Cleaning Up, and you the audience. Please join us this time next week for another episode of Cleaning Up.