Just a week after the Norwegian central bank, which runs the country’s sovereign wealth fund, $1tn fund – the world’s biggest wealth fund built on Norwegian hydrocarbon stock– has told its government it should dump its shares in oil and gas companies the CEO of Statoil, the Norwegian oil and gas company  Eldar Sætre announced on November 26, 2017: “We want to build the world’s largest wind farm at Doggerbank, with maybe 300 wind turbines, 8,660 square kilometers, which can create up 3,600 megawatts of energy that can power up to 3.6 million households,5 percent of power needs of the UK.”

Three days later Royal Dutch Shell announced its intention to halve its carbon footprint by 2050 and to increase its spending on clean energy to up to USD 2 billion a year in order to help meet the goals of the Paris Climate Change Agreement. In a letter to the UN’s Patricia Espinosa, Shell CEO Ben van Beurden wrote that meeting the goal of halving its carbon footprint by 2050 would involve providing lower-carbon fuels like biofuels and hydrogen to customers, in addition to generating renewable power from solar and wind; driving demand for battery electric vehicles by growing the number of charging points and developing gas markets for power and transport.

“Shell is announcing an ambition to bring down the net footprint of our energy products (expressed in grams of CO2 equivalent per Megajoule consumed) by around half by 2050. As an interim goal, we aim to reduce it by around 20% by 2035- an ambition that we believe is compatible with a 2° C roadmap. This ambition includes emissions direct from Shell operations, emissions caused by third parties who supply energy for that production and emissions caused by the use of our products by consumers, as well as activities that reduce or offset C02 emissions.”

On the same day, Shell announced to shareholders that it would increase capital allocated to clean technologies to USD 1 to 2 billion a year through 2020, and that the company would measure progress on cutting its net carbon footprint by annually disclosing information not only from its operations and energy use, but from the use of its energy products.

“We also plan to pursue further operational efficiencies in our assets and will seek to develop carbon capture and storage. And increasingly we will work with nature, forests and wetlands, to help compensate for those emissions from uses where alternatives do not yet exist or will take time to scale,” he wrote.

Ben van Beurden said that these efforts require well-targeted regulation, support for technological innovation and clear long-term policy frameworks that give strong investment signals and drive different choices and behaviours across the economy.

“Shell will continue to work with governments to help shape the policy frameworks that promote the decarbonisation of all sectors of the economy without unwanted side effects. All of us recognise that the challenge of tackling climate change can only be met through a cross-generational, multi-faceted approach to which we all contribute and around which we all collaborate,” he wrote.

The location of Statoil’s wind farm, Doggerbank, is located about 150 kilometers off the east coast of Yorkshire in England. “We have three of the four licenses at Doggerbank and we have decided to begin the process to see if we can achieve this project,” says Sætre.  Statoil’s ambition is to invest 100 billion kroner in profitable renewable projects by 2030.

“… The risk of offshore wind farms is less than the risk of oil and gas, and the costs are heavily reduced. We work out that, with renewable energy, we can have a profitable return of between 9 and 11 percent,” says Sætre. Statoil currently operates a 25 percent return on the oil and gas projects they are building based on an oil price of $70 barrel.

(Phote: courtesy Norway Today)