This week we saw major news about a court ruling ordering Shell to dramatically cut its greenhouse gas emissions:
Shell’s response to these headlines offers some clues about its energy transition strategy and implications for the prospects of the Shell petrochemical facility in Beaver, PA. You can find their response here: https://royaldutchshellplc.com/2021/05/27/shells-response-to-climate-case-ruling/
Per this response, one area of growth for the company is electric car charging stations, but it seems focused in Europe:
“We have already built about 200 fast charging points, by the end of the year there will be 250. For electric driving we offer 100% green electricity nationwide. In addition, we provide home charging and we offer 200,000 charging points throughout Europe through our subsidiary NewMotion.”
(It’s worth noting that we have pathetically few fast charging stations in Pennsylvania.)
A part of Shell’s response to the court ruling included a link to their “Energy Transition Strategy” (link) that has some details about their plans for their petrochemical business:
“In our Transition pillar: We intend to extend our leadership in LNG volumes and markets, with selective investments in competitive LNG assets to deliver more than 7 million tonnes per annum (mtpa) of new capacity on-stream by the middle of the decade. We will continue to support customers with their own net-zero ambitions, with offers such as carbon-neutral LNG, which uses nature-based carbon credits to offset full life-cycle emissions, including methane. Our petrochemical business will continue to grow and provide products that enhance the efficiency of energy use. We intend to reduce the number of refineries from 13 sites today to six high-value chemicals and energy parks, and reduce production of traditional fuels by 55% by 2030, from around 100 mtpa to 45 mtpa. We intend to grow volumes from our chemicals portfolio and increase cash generation from Chemicals by $1-2 billion a year by 2030. We will produce chemicals from recycled waste, and by 2025 aim to process 1 million tonnes a year of plastic waste.”
I only found one reference in the report to the Beaver facility, here:
“ENERGY EFFICIENCY IN OUR OPERATIONS Our production sites are increasingly using lower-carbon energy sources. For example, we are installing eight new cracker furnaces at our Moerdijk petrochemicals complex in the Netherlands, replacing 16 older units. This is expected to reduce the site’s energy consumption, and to lower greenhouse gas emissions by around 10% compared with 2019. In the USA, we are building a 250 MW co-generation plant at our Pennsylvania chemicals facility that will also supply electricity to local homes. The chemicals plant has been designed with an energy-efficient gas cracker that will also use hydrogen as a fuel source.“
It is unclear to me how a forced reduction in greenhouse gas emissions could impact their petrochemical business, but I’ll keep exploring for clues. I’d imagine it depends significantly on the profit per unit of CO2 equivalent emissions produced. While it seems that a petrochemical business would emit less than a traditional fossil fuel (i.e. gasoline) business, there are also significant concerns about the profitability of the Pennsylvania Shell facility (per this IEEFA report) that may overwhelm its “profit/CO2e” ratio. Stay tuned.
UPDATE June 9, 2021
Reuters reports on this announcement from Shell:
“For Shell, this ruling does not mean a change, but rather an acceleration of our strategy,” van Beurden said.