'Oil' Company Boss Understands What Business He's Really In
from the embracing-change dept
Quite often we point out how companies fail to understand and adapt to the changing nature of their businesses, and how this leads to all sorts of missed opportunities. It’s nice, then, to be able to point to a company who does seem to grasp the changing marketplace it’s facing, and evolve accordingly. The CEO of Royal Dutch Shell, Jeroen van der Veer, penned an editorial (via WSJ Energy Roundup) in the Times of London earlier in the week, commenting that a rising demand for energy will outstrip the ability of renewable energy (such as wind and solar power) to replace fossil fuels. In addition to advancing power-generation and fossil fuel extraction technology, van der Veer says that improving energy efficiency should be a top priority, as half of the energy generated worldwide is wasted or lost. Think about that for a second: here’s the CEO of an “oil” company telling people they should be using less of his product. But this statement reflects that van der Veer understands he’s not the head of an oil and gas company, but rather an energy company that needs to play a significant role in shaping the future of the market. He understands that the business of fossil fuels, while not dying, is changing, thanks to natural and technological constraints and political pressures. While certainly Shell could choose to keep a narrow focus, to do so would be ignoring the bigger opportunities of the wider energy market. Furthermore, rather than taking the view that energy efficiency is an enemy, since it could reduce consumption, he understands that the long-term future of the market, and Shell itself, depend on it to survive.
Comments on “'Oil' Company Boss Understands What Business He's Really In”
Law of Unintended Consequences
He’s not dumb. He knows the Law of Unintended Consequences. Make energy-efficient products, and people will buy more of them. The result? A net increase in energy consumption, not a decrease.
Use less energy
Live closer to work, or school, or where ever you spend most of your time going to.
Walk more, Cycle more, you’ll feel healthier and happier for it.
Switch stuff off properly.
The next time a lamp breaks, look for a more energy efficient lamp.
The next time you buy electrical equipment, look for the energy rating on it as well as the price. It will save you more money in the long run.
Re: Use less energy
Nice thought but most people can’t afford to live close to work. In Wash. DC unless you are pulling in well over 6 figures or in section 8 housing, rent is very high.
Re: Use less energy
Um, I have a 50 minute commute. There isn’t any housing anywhere near to where I work. Well at least, none that I’d actually live in. Walking to cycling into work wouldn’t work anyway, the starch wouldn’t stay in my outfit.
I would take public transportation if:
1.)There was some way to get from the train station to my work.
2.) There was a dress code enforced to keep unsightly people AWAY from me. I don’t want to sit next to some stink y scumbag with a shirt-dress and an ironed hat.
Re: Use less energy
Not that cycling isn’t my biggest hobby (it is), but cycling and walking are considerably less cost effective than driving (when factoring time and increased food consumption and assuming you are not doing so for fitness, but strictly for transportation and assuming that you still own a car for longer trips). So lets not fool ourselvs, if you’re looking to save energy then cycling 20 miles to work and back is a feasible alternative, but if you’re looking to save money, then it’s going to cost you more.
I regularly ride about 100 miles more more per week and on longer rides, I burn about 60* calories per mile. If you ride 40 miles per day, that’s equivalent to eating another 2200 calories per day. That will usually cost about 10 dollars** where at 20MPG (a conservative estimate) a car would only produce a variable cost of about 6-7 dollars.
*While clicking off about 17 MPH
**Assuming a balanced diet and not a McDonalds value meal consisting of more than 50 percent fat calories and relatively devoid of nutrition.
Word!
Re: Re: Use less energy
hehehe…that is funny. true too but if you are using the commute in place of your regular workout…it wont cost you anything more.
im a weight lifter and the cost to keep my body fueled appropriately is not cheap. 4 meals and 3 snacks a day.
Uh Huh
It all sounds great.. But its just hot air. Another form of renewable energy brought to you by CEO’s.
He is a clever guy
I’ve heard him in various interviews. Yes, he is a CEO of an oil company but he also clearly shows that he knows that oil is a finite resource and that his company’s survival depends on making a change from an oil company to an energy company.
PR
It shows he knows the value, and indeed the necessity, of good public relations for the success of oil companies right now. They talk about renewables, energy conservation, etc., while they rake in billions in record profits as people scream for their heads. Of course they want to play the good guys in the media so they can keep a good thing going without a lot of government interference!
Look at what Shell DOES, not what it SAYS!
Re: PR
i agree with John B
thats Pr saying it will make him and his co look better and saying it wont make it happen.
Shell Policies
I worked for Shell from 1956 to 1987 and he is merely stating the companies normal policies. Before the oil embargo,Shell never used imported crude or foreign tanker. They paid more for local crude because they believed in national supply security. It was more expensive, so it had to be made up by better technology. Nixon changed that giving Shell’s crude to other companies and forced Shell to buy foreign crude.
Half truths and lies were never accepted and anyone caught was fired or demoted.
Read “The Art of the Long View” by Peter Schwartz if you want some more insight on van der Veer and Royal Dutch Shell.
He’s NOT saying to use less of his product…we will use every drop they produce. What he IS saying is that if we don’t conserve, the renewable resources won’t be able to keep up with demand over and above our oil energy usage. He is not worried about going out of business or losing any profits at all.
Once oil doubles in price ($120 a barrel), then oil shale will be profitable and USA and Canada will start tapping those HUGE reserves. OPEC will make sure that prices don’t get that high as long as they can help it (maybe another 10-15 years).
Canada actually has more oil than any other country in the world…just trapped in sand and shale.
Yes, conservation is a great idea, and everyone needs to think about it and implement it at home, work and in our transportation options.
Re: Re:
Thanks to a certain company I work for, Canada is digging up that oil sand and producing oil. It’s still more expensive than foriegn oil because the process is more expensive and just pumping it out of the ground, but they are doing it.
RE: Use Less Energy
man, you people NEVER STOP. Yes, we know all those things that we SHOULD do. But unlike you, WE have to live in REALITY. DO you have any idea what housing in the area I work costs? It’s a corporate development center where my office is, so the only housing anywhere near there I gotta be pulling down 6 figures at least to afford.
And as for Public Transit…have you ever tried to USE public transit in Las Vegas? It’s a joke. It takes you 3 hours to get across town. So I’m supposed to spend 6 hours a day getting to an from work?
Re: RE: Use Less Energy
I think most people fall into this category. You can’t convince the urban hippies of that, though. Supposedly there’s a magic bus that will take me to and from work between two cities in a reasonable amount of time. That or I’m supposed to happily sell my house, uproot my family, and move to a neighboring city with different schools, neighbors, utilities, property values, etc.
Ride a bike
A 1+ hour (12-15 mile) commute by bicycle is not that bad. Even if you do it just a couple times a week. I have no excuse, i live in san diego and the weather is ideal for it, except for maybe July and August i wont even break a sweat. Yeah it takes 2 hours out of my day but think about it, it gets you to work and eliminates the need to go to the gym.
Re: Ride a bike
Actually, endurance sports should never replace a good weight training regiment. Endurance athletes still have to weight train because of bone mass loss.
I'm such a lazy bum
I drive the 15 minute journey to my gym everyday. I should be ashamed of myself.
It's 10-15 minutes for me
I use to drive, it was 40 minutes each way. I made a choice to live within tram distance of work when I wanted to move. It cost an extra $150 a month to live where I now live. That cut my commute to 15-20 minutes. Then I started cycling the route, commute is down to 10 minutes or so since I don’t stop to pick up passengers.
So overall I spend about $200 less on petrol (I’m not in the US), for a $50 overall saving, and feel a lot healthier and happier. It’s so great not being stuck in the traffic too and I have more free time.
I’m not suggesting you up sticks and move, I’m suggesting you make small choices as the opportunity arises. Next time you move, take the cost & time of the commute into account. Next time you replace a piece of electrical equipment, price in the cost of the electricity.
Switch stuff off. I have my TV stack on one switch block, so I can flick a switch and everything but the HD recorder (the clock) can be switched off. Same with the computers, cable modem, router etc. all on a single switch block. A bonus here, was that when I switch them on in the morning, I get a new IP address for better privacy. But also there’s less waste heat to make the nights too hot.
I installed a great power shower, I was a ‘bath’ man, but now I have a decent shower unit and I love it.
There are lots of little choices I make and they all seem to have lots of little side benefits.
just something to think about
theres always going to be someone on each end of the spectrum.
but if you find yourself in either of those ends, you should think about why others make the choices they make.
im single, and i qualified for a loan to people with “low to moderate” income. however, i live in one of the nicest communities and its near my work. i was able to buy a small place because of the fact that im single with no children. so i gave up size for location.
i also bought a motorcycle and use that instead of my car when i can. no children to cart around. i would bicycle but there is no safe way to get to work from my house.
i recycle so much that i can get by with putting trash out once every two weeks.
i buy some energy efficient bulbs, but use halogens where light matters.
not too many people are advocating that you give up everything, but there are small lifestyle choices you can take into consideration when the opportunity presents itself.
i know plenty of people who refuse to recyle even though they have curb pickup or the recycle center is close by.
when you need a bigger vehicle, is the H2 (with its 7 miles to the gallon) really necessary? do you really need that 3,000 sq ft home (for two people) that requires over an hour commute? there are plenty of areas we can collectively cut back without making unreasonable lifestyle changes.
Who killed the electric car?
If you haven’t seen the movie ‘Who Killed The Electric Car’ yet, you should.
Van der Veer is pulling the same PR shenanigans that the oil industry always does.
Interesting how he slips in the line about how alternative energy sources can never keep up with the growing demand…yeah, right – especially if Shell has any say in it.
Various technologies have existed for decades which would greatly reduce our (in the US) dependence on fossil fuels.
Wonder if his tune would change if Shell controlled the market on fuel cell production, or developed better batteries.
oil companies are in the same business as Enron was.
They are in the “quasi-legally and vaguely collusively manipulating supply to drive up prices while avoiding legislation by paying off politicians from their over-flowing coffers hoping no one blows the whistle sending them all to prison” business.
Re: Re:
Anon, I think we share a view of the oil situation. But, there are two things that blow me away. They are 1) why has the American public not taken a stand and done more to conserve this non-renewable resource? The least we could do is park the gas hogs and/or driver a little less and a little slower when we do; and 2) One day we saw a news story that oil prices had fallen due to our reserves. Then, miraculously, two days later we see where oil is pushing $70 because of our low supply!!! If this is manipulation I could not imagine what is! Wonder whose hand is on the valve at the refinery?
If you truly believe that Oil Companies are making obscene profits… buy stock.
I love the Dutch. =)