Shell official: Innovation, cooperation key to future energy success

A combination of innovation and cooperation will be necessary to meet the world’s future energy needs, a Shell Downstream Inc. official forecast. “We’ll need partnerships,” said Peggy Montana, executive vice-president for supply and distribution at the Royal Dutch Shell PLC subsidiary. “No single organization, company, or government can meet the challenges that lie ahead.”

The global population keeps growing amid increased prosperity in developing countries, Montana told attendees at Deloitte’s 2013 Washington Energy Conference at nearby National Harbor, Md., on May 21. The world’s future energy needs will put more pressure on water, energy, and food resources, and coordination and collaboration will be essential, she maintained. Addressing global climate change also will be critical, she added.

“The energy industry has a fine track record of breaking through seemingly hard technological barriers,” Montana said. “However the future unfolds, I believe fresh thinking fueled by human ingenuity will be needed.”

That inevitably will require more alternative and renewable energy sources, she said, adding, “Natural gas can serve as their backbone by addressing their intermittency.”

Technology is helping Shell increase its gas development worldwide, she said. Montana said the multinational oil, gas, and chemical company believes LNG can become a transportation fuel and recently signed an agreement with Swedish truck, auto, and bus manufacturer Volvo.

It launched the first 100% LNG-fueled barge 2 months ago on the Rhine River, and is developing floating LNG terminals to produce gas far offshore, liquefy it, and load it onto tankers, she said.

“We see [LNG] moving pretty quickly as a transportation fuel, particularly for commercial truck fleets,” Montana said. “We expect to see LNG refueling corridors developed along major transportation routes, and centralized compressed gas refueling continued to grow among local fleets.”

Innovations also will be required downstream, she continued. “We’ll have to retool refineries to handle lighter tight oil as well as address the changing shape of the barrel. Gasoline demand is starting to fall, while distillate demand is taking off. But the US-Canadian refining sector will benefit as the North American crude oil supply outlook moves away from imports,” she said.

She said she also expects innovative changes to continue upstream, “but they’ll be more incremental than revolutionary.”

Contact Nick Snow at nicks@pennwell.com.

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