April 29th, 2013


President, Shell Oil

The nexus of food, water and energy is an increasing concern as business and government leaders confront growing global population and burgeoning consumer classes in China and other developing countries. Feeding and hydrating 7 billion people at adequate levels is a challenge that will be heightened by growing energy demand and climate-driven droughts and floods. Is hydraulic fracturing smart in a world with rising water stress? How can innovation, technology and policy work together toward a clean and prosperous economy? 
Regarding climate change, Marvin Odum, president of Shell Oil Company, said, “It’s very clear for us as a company that climate change is real, that humans have an enormous impact on it, and that it requires some sort of action going forward.” The number one element of that advocacy, he said, is putting a price on carbon, with “cap and trade” the preferred solution because it’s a market-driven solution. Inside the company, he said, they have already priced carbon at $40/ton. Project teams take that price into account in designing projects, looking to reduce emissions. 
The impact of the increased use of natural gas in power generation in place of coal has reduced CO2 emissions across the country, Odum said, and went on to state, “To reduce carbon emissions, probably the single, most impactful thing that we can do over the next decade and a half to two decades is to drive natural gas in and drive coal out.” At the same time, Shell is working on carbon capture and storage, which the company is currently doing at full scale in Canada. 
One of primary challenges around natural gas development right now is methane leaking into the air—in the drilling, the processing, or the production. Regarding data on the amount of the emissions, “You see emissions all over the map, from low emissions to emissions that would make it about equivalent to coal, thus removing the benefits,” he said. “We need to get out of the business of speculating what it is and get into the business of the science behind it.” 
In doing so, Shell has joined with eight other companies and academic organizations to test each stage of the development at Shell’s facilities and measure the associated methane emissions. “We want to develop a standard for the industry and we want that standard to be adopted into regulation.” Odum anticipates the study to come out in May or June of this year. He expects this “fugitive emissions data” to be folded into a set of best practices, including water use, for the development of natural gas resources. He believes these best practices should be taken up in state-level regulations. Some states already have critical elements in place, he said, and others are moving in that direction. “It’s better to push those states along than to wait for some grand federal vs. states rights discussion, which could go on for another 20 years.” 
Lucy Sanna
Photos by: Ed Ritger 
Commonwealth Club of California
April 29, 2013
Marvin Odum, president, Shell Oil Company