Shell chief favours biofuels over electric cars

Posted 22 May 09

Royal Dutch Shell is assuming the economic downturn could last several years when assessing the outlook for oil prices and planning investment.

Chief executive Jeroen van der Veer also said on Tuesday that this year the company was focussing on growing its dividend and planned to keep investments at a relatively high level.
At the company’s annual meeting of shareholders, Van der Veer said he expected volatility in oil prices and downstream margins to continue.

“We have to plan on the basis that the downturn could last for several years,” Van der Veer said in a speech.

From a peak of near $150 (96.95 pounds) a barrel last July oil collapsed to around $30 a barrel last December. Since then it has doubled to around $60.

Van der Veer also said supplies of “easy oil” – that which is relatively easier to drill for and transport – will not match demand in the long term. Shell would focus its renewables efforts on developing biofuels in the next few years, he said.

The CEO of Shell, Jereoen van der Veer, has recently dismissed the idea of using electric cars. In an interview with the Associated Press in Germany yesterday he put down electric vehicles by saying, “My milkman used to drive around in electric cars a long time ago … What’s new?”

He then went on to suggest that an electric car infrastructure would be too difficult to establish and so EVs just don’t make sense.

Shell is also looking at investments in the biofuels sector in Brazil, and has reportedly contacted Cosan and several other major players.

Source: F.O. Licht’s World Ethanol & Biofuels Report, 19 May 2009

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