Shell admits it’s past peak oil, eyes carbon offsets as a business opportunity

Royal Dutch Shell says it is already past peak oil.

In a Thursday press release, the company said "oil production peaked in 2019," and that it expects an annual decline of 1% to 2% per year. That's something Shell has anticipated for some time, and it's hoping a combination of new businesses will keep it from going the way of the dinosaurs whose fossils became the raw material for its main product.

The announcement follows Shell's expectations from less than five years ago—when it anticipated peak oil demand by 2020. At that time, analysts sounded alarm bells that EVs posed a threat to oil companies.

So far, oil companies have stepped up to diversify and become "energy providers" instead—snapping up renewable sources like wind farms—although it's still unclear how the strategies will evolve as the gasoline business starts to truly decline.

In September 2020, Shell also joined fellow oil giant BP in pledging to achieve net-zero carbon emissions by 2050. But Shell's plan—which relies heavily on biofuels and liquefied natural gas—is a fairly weak attempt at reducing emissions, Gizmodo noted.

Shell fuel station in Europe

Shell fuel station in Europe

However, another avenue Shell is taking—both to reduce emissions and make money—is to clean up pollution that has already occurred.

In the release, Shell said it plans to ramp up use of carbon-capture systems and carbon offsets, such as forestation projects. It eventually aims to sell carbon-capture services to other companies.

Carbon-capture is increasingly viewed as part of the solution to achieving the goals of the Paris Climate Accord, but costs have kept it from being used on a commercial scale, according to Reuters. Carbon offsets—which many businesses plan to use to achieve net-zero emissions—have also been criticized for allowing the continued use of fossil fuels. In a statement to Reuters, Greenpeace called Shell's plan "delusional reliance on tree-planting."

Shell has also made moves to diversify into EV charging. It's placed some charging stations at its gas stations, and in 2019 bought the Greenlots charging network.

And just last month Shell announced it will buy Ubitricity, another charging network that has expertise in streetside charging.

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