Axios Generate: Shell's CEO on the record

Plus: The latest on the pipeline cyberattack and Biden's new climate hires | Monday, May 10, 2021

Open in app View in browser   Presented By Chevron   Generate By Ben Geman and Andrew Freedman ·May 10, 2021 Welcome back! Today's Smart Brevity count is 1,164 words, 4.4 minutes. 🌎 We're launching our latest Get Smart video short course series on climate tech today. Check it out here. 🎶 And happy birthday to Bono of U2, who has today's intro tune...     1 big thing: Shell CEO says Big Oil needed in climate fight Screenshot of Ben van Beurden talking on "Axios on HBO"   Royal Dutch Shell CEO Ben van Beurden knows Big Oil won't win any popularity contests, but he argues huge incumbent energy companies are needed to curb global warming. Driving the news: Van Beurden tells "Axios on HBO" that "in many parts of society, everything we say is wrong." But in a wide-ranging interview, he said that Shell is among the companies that can deliver climate-friendly energy at scale. "What quite often I think is insufficiently understood is that companies like us are absolutely needed for the solutions that the world needs," he told Axios' Hope King. The big picture: The CEO cited the resources, customer engagement and other factors that together mean "strong incumbents like us" are needed. "If you believe that the energy transition is going to be solved by startups or companies that have yet to be invented, then I would say dream on," he said. "It ultimately has to come from companies with strong incumbency and very good intentions. And that's what I believe we are," van Beurden said. Asked when clean energy will be more than 50% of Shell's business, van Beurden said, "I think that will probably be somewhere in the next decade." Yes, but: Oil and natural gas remain the dominant business lines and investment areas for companies with aggressive long-term climate targets like Shell, BP and Total. Activists question the pace and sincerity of Big Oil's climate plans and say the industry is still a big part of the problem, not a climate savior. Environmentalists cite their continued fossil investments and are mindful of the industry's history of opposing aggressive climate policies. Why it matters: The remarks come as Shell — which recently said its oil production peaked in 2019 — is vowing a decades-long transition to become a "net zero emissions" business by 2050. It's a plan to greatly expand its ongoing diversification into EV charging, hydrogen, carbon removal, renewables, power services and other areas. The intrigue: For Shell, and other European-based oil giants with long-term climate goals, it's a gamble that they can compete in a world moving toward a cleaner energy mix. "I am reasonably confident that companies like us who have a proactive stance to the energy transition are going to be the winners," van Beurden said. Go deeper with Hope King's coverage and this video from their interview.     2. Sizing up the Colonial Pipeline cyberattack Illustration: Aïda Amer/Axios   Colonial Pipeline, a huge network that supplies eastern states with gasoline, diesel and other products, is shut down thanks to a major ransomware attack disclosed over the weekend. Why it matters: Colonial is the largest refined products pipeline network in the country, transporting over 100 million gallons per day. The company provides roughly 45% of the fuel used on the East Coast, per its website and published reports. "It's the most significant, successful attack on energy infrastructure we know of in the United States," veteran energy analyst Amy Myers Jaffe tells Politico. What's new: The company said Sunday evening that while the main portions of the pipeline remain offline, "smaller lateral lines between terminals and delivery points" are back up. Gasoline futures are trading higher, but the ultimate effect on prices will depend on the duration of the shutdown. Major price increases are not expected if it only lasts a few days. The big question: That's how long the pipeline will remain down. "[An] extended outage would likely see spot retail price spikes and even product shortages in harder-to-resupply middle and southeastern states, especially if there's hoarding," Rapidan Energy Group said in a note. What they're saying: Via Reuters, "While the U.S. government investigation is in the early stages, a former U.S. official and three industry sources said the hackers are suspected to be a professional cybercriminal group called DarkSide." Where it stands: On Sunday the Transportation Department issued a regional emergency declaration in 17 states that enables increased trucking hours to deliver fuel by road. The move is designed to "avoid disruption to supply," the agency said. More broadly, Commerce Secretary Gina Raimondo told CBS' "Face the Nation" there's an "all hands on deck" effort to resume operations.     Bonus map: The scope of the Colonial Pipeline system The Colonial Pipeline system. Image courtesy of Colonial Pipeline.   The map above, via Colonial, gives a sense of the scale of the network that transports products from Gulf Coast refineries to eastern markets.     A message from Chevron Chevron believes in actions, not just words     We believe the future of energy is lower carbon. That's why we're tying our executives' compensation to lowering the carbon emissions intensity of our operations. In fact, through our carbon capture projects, we're expected to capture nearly 5 million tonnes of CO2 per year. Learn more.     3. Breaking: The newest federal climate officials The U.S. International Development Finance Corp. (DFC) this morning announced its first "chief climate officer" and his deputy as the development bank looks to use billions in financing tools to help combat global warming. Driving the news: The chief climate officer is Jake Levine, an energy and climate expert who arrives via the law firm Covington & Burling. He's previously advised California officials, worked for the power software company Opower and served in President Obama's White House. The development bank also announced Aparna Shrivastava, who comes from her role as climate finance lead for the NGO Mercy Corps, as deputy chief climate officer. The DFC notes she brings years of experience in sustainable development in East Africa, Central America and South Asia. Why it matters: It's part of wider White House efforts to leverage federal financial and development agencies to help other countries cut emissions and become more resilient to climate change. The big picture: The announcement comes about two weeks after the White House released a broad international climate finance plan. It makes climate investments a priority for the DFC, the Millennium Challenge Corporation and the Export-Import Bank of the United States. How it works: The DFC's various tools include project loans, political risk insurance, technical assistance and, via 2018 legislation, the ability to make equity investments. The recent White House plan calls for increasing new climate-focused investments at the DFC to 33% of its billions of dollars in annual new portfolio additions beginning in fiscal year 2023. And an administration official tells Axios that beyond that specific target, the DFC is looking to stitch climate into the fabric of its portfolio more broadly.     4. Oil markets await fresh demand data Data: Investing.com; Chart: Axios Visuals The week ahead will bring fresh analyses of where oil markets are heading as demand recovers but the pandemic remains tragically persistent in some regions. What we're watching: On Wednesday the International Energy Agency will release its closely watched — and often market-moving — monthly oil report. Tomorrow brings OPEC's monthly report and the latest outlook from the U.S. Energy Information Administration, including estimates for U.S. production this year and next. Where it stands: Oil prices have recovered significantly from the depths of 2020 when the pandemic crushed demand. But as you can see in the chart above, the recovery began losing steam in March before making up most of that lost ground. This morning Brent crude is trading in the high $68 range.     5. Catch up fast: Oil-and-gas, carbon storage, EVs Deals: "Two oil-and-gas producers that operate in Colorado — Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. —plan to announce Monday that they are combining into a company valued at about $2.3 billion." (Wall Street Journal) Climate: "The Dutch government has granted a consortium that includes oil majors Royal Dutch Shell and ExxonMobil around 2 billion euros ($2.4 billion) in subsidies for what is set to become one of the largest carbon capture and storage (CCS) projects in the world, the Port of Rotterdam said on Sunday." (Reuters) More climate: "Thousands of demonstrators took to the streets of Paris and other French cities on Sunday to call for more ambitious measures in the fight against climate change." (Associated Press) Electric cars: "At least five of Tesla's competitors bought ad time during Saturday Night Live hosted by Elon Musk, using the billionaire's appearance to sell their own non-Tesla EVs." (The Verge)     A message from Chevron Chevron believes in actions, not just words     We believe the future of energy is lower carbon. That's why we're tying our executives' compensation to lowering the carbon emissions intensity of our operations. In fact, through our carbon capture projects, we're expected to capture nearly 5 million tonnes of CO2 per year. Learn more.     Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Suite 1300, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. Change your preferences or unsubscribe here.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: