Professional Engineering

How the demand for energy will be squared with the desire to limit and reduce greenhouse gas emissions as the population soars is one of many questions facing today’s oil behemoths. For Matthias Bischel, executive director of projects and technology at Shell, the challenge is readily apparent. The global population looks likely to hit nine billion by 2050, so energy demand is set to rise exponentially.

“Look at China and India: a number of those countries and economies are effectively going through the most energy-intensive phase of their development, and that all points to increased use, in absolute terms, of energy,” he says. “What we can hope is that the overall energy per capita can go down, but in absolute terms there will be an increase.”

In 2025, such an increase could be as high as 80%, suggests Bischel. “That means there are a few challenges. There’s hope that renewables may help, and I believe that by 2050 there may be 25% or even more – 30% – of demand covered by renewables. But that still means that there is a lot of coal, oil, gas and nuclear required to provide all the energy demands of the world.”

The mix of renewables that Shell is involved with includes around 1GW of wind capacity and first- and second-generation biofuels. For the company, biofuels are the key area, he says. “Wind turbine and gearbox technology is not our speciality, but we are good at managing large projects. We are very serious about the environment and the reduction of the environmental footprint in terms of fossil fuels. We are focusing on providing more energy at a reduced cost and with a small footprint.”

In terms of oil, which in Bischel’s vision will be consumed ever more voraciously as the population expands, reservoirs that are being drilled on and offshore typically yield a maximum of only 30-35%. So the numerous techniques that come under the banner of “enhanced oil recovery” are becoming increasingly important. Shell has already demonstrated at onshore fields, such as Schoonebeek in Holland, that it is possible to extract some of the oil left behind by earlier efforts. At the Dutch oilfield – one of the largest in Europe – 750 million barrels were left in the ground when it was shut down in the 1990s. Now Shell believes it can extract 120 million barrels more, over a 25-year timespan. 

Bischel says: “There is still a lot of oil that can be recovered through technology, moving up the curve to 50-65% recovery. And in many cases, because the infrastructure is already present, doing that at incremental cost may be more affordable than going into a new area. So there is certainly a resource out there, and that is why we are putting a lot of emphasis on enhanced oil recovery.”

As for exploration, Shell has taken on 60 major new sanctions – or final-investment decisions – in the past year-and-a-half, says Bischel. These range from deepwater fields, through opportunities in North American gas, to liquefied natural gas advances in Australia. 

Floating LNG also offers opportunities. In the Gulf of Mexico, there are several discoveries waiting to be appraised, as there are in the Middle East. 

As well as developing new and existing reserves, safety is the priority for Shell, says Bischel, particularly in the wake of the Deepwater Horizon disaster. “I’d like to stress the work that we are doing on safety, not just in the drilling space – because the drilling one is certainly the most important in the wake of Mecondo – but overall, from a risk management point of view, we have everything in place.”

Shell is set to become a bigger producer of gas, he says. “We are becoming a gas production company. In fact, from next year onward we will produce more gas equivalent than we are producing oil. We want to move toward cleaner energy that is affordable, and gas is abundant: 250 years’-worth of gas reserves have already been found. And it is much more energy and much more environmentally friendly.”