Shell’s Crude Awakening
A PECULIAR THEME PARK IN THE HAGUE CELEBRATES THE HISTORY OF the Netherlands through a series of miniature models. The Madurodam features little canals, old-fashioned windmills, tiny tulips and, amid it all, an homage to Royal Dutch Shell, the oil giant that is the biggest company in the country and, by revenue, the second largest publicly traded oil-and-gas company in the world. There’s a Shell drilling platform, a Shell gas station and a Shell natural-gas field, complete with a drilling rig. The display is at once odd—energy infrastructure in a children’s theme park—and entirely fitting: Shell has been, for decades, one of the most powerful players both in Dutch politics and on the global economic stage.
But that could soon change. As concerns grow over the existential challenges posed by climate change, Shell must grapple with its own existential crisis: How should a company that generates most of its profits by serving the world’s enormous appetite for oil navigate a long-term future in which shifting political and economic tides threaten to make fossil fuels obsolete?
The pressure to abandon oil and gas is already in force. In recent years, protesters have swarmed Shell’s headquarters; advocates representing 17,000 Dutch citizens have sued the company; and powerful investors successfully coerced executives to say they will reduce emissions. In 2015, countries around the world promised to aggressively tackle greenhouse-gas emissions, in order to meet the target laid out by the Paris Agreement: goals that require buying and burning significantly less oil and gas.
Shell CEO Ben van Beurden has a bird’s-eye view of the situation from his corner office at the company’s global headquarters in the Hague. “We have to figure out what are the right bets to take in a world that is completely changing because of society’s concerns around climate change,” he says.
Projections from energy companies show demand for oil could peak and fall in the coming decades; some outside analyses suggest demand for oil could plateau as soon as 2025. Markets are already jittery
