THE SUNDAY TELEGRAPH (UK: 'Shell will be the better for its trauma': “The group has some way to go before it regains the trust of investors, following the furore sparked by last year's disclosures about its massive overstatement of oil reserves. Despite being fined by regulators and being sued for billions in the US by shareholders, Oxburgh believes the episode will make Shell a stronger company over the long run.” (ShellNews.net) 17 April 05

(Filed: 17/04/2005)

Lord Oxburgh, the outgoing chairman of Shell, tells Andrew Murray-Watson that the oil giant has been shaken from its complacency and lambasts rivals for not taking global warming seriously

Lord Oxburgh, who retires this year as chairman of Shell, is the antithesis of the stereotypical Big Oil man. At a conference in Barcelona on Tuesday, he told a room full of some of the world's most powerful energy executives that the industry had to take the issue of environmental change much more seriously.

Oxburgh has little time for his industry peers who refuse to acknowledge the dangers of climate change. In an interview with The Telegraph, he says: "I have a feeling that in parts of the world, some business interests may see the acknowledgment of global warming as fatally damaging to their business interests. I see this as extraordinary.

"I think that global warming and the changing energy situation we find ourselves in, represent fantastic business opportunities. It is only a threat to those who insist on doing business with their heads in the sand."

Oxburgh (or Ron, as he prefers to be called) is a distinguished academic and former chief scientific adviser to the Ministry of Defence. It is easy to spot where his jibes are aimed.

ExxonMobil heads a group of companies that have repeatedly pooh-poohed global warming. The US oil colossus spends just $10m (£5.3m) a year on research aimed at developing alternatives to fossil fuels. This compares with more than $100m a year spent at BP and $1bn at Shell since 2003.

Last year, Lee Raymond, the chief executive of Exxon, said that Europe needed a "reality check" in its commitment to meeting the carbon emission reductions outlined in the Kyoto Agreement on climate change.

But Oxburgh says a refusal to tackle global warming is bad commerce and lousy ethics. "There is a different group who accept the science but think it is pointless to try and do anything about it," he says. "That is at least a rational point of view and you can have a debate about that."

His response to that faction goes like this: "It is pretty clear that the effects of global warming are having an impact already. The developed world can insulate itself to a degree from the more extreme consequences of global warming.

"It is developing countries that will suffer the most. There are hundreds of millions of people in the world who for instance, depend on monsoons for their livelihood, or live in coastal areas vulnerable to rising sea levels.

"So simply to say global warming has gone too far and we can't do anything about it, even if it is a rational decision, is not a morally defensible one. We have to try."

So will Oxburgh become a full time eco-warrior when he retires from Shell in June? "I actually have no plans and no idea what I am going to do. I have had various approaches, but I have not said yes to them. I have worked in the world of business, in the civil service and in academia, so I would like to do something to take advantage of that experience.

"I do though have realistic environmental concerns. We have to keep the planet a reasonable place to live for our successors."

Oxburgh is, however, optimistic about the future and the ability of technology to satisfy our future energy needs. Indeed, we may never actually run out of fossil fuels, on his scenario.

"Today is a time of profound change in energy industries as a whole," he says. "We are moving into a new world, partly driven by the price of fossil fuel, partly driven by environmental concerns, and partly driven by the spectre of running out of fossil fuels.

"We are going to find, on a 50-year timescale, much easier ways of meeting energy needs than extracting fossil fuels from the ground. We may not get anywhere near exhausting fossil fuel resources, as a combination of environmental and price pressures and new technologies make alternatives much more attractive."

Abundant energy is all around us; the challenge is storing it. "In a funny way, battery technology will be key to a great many of our transport and energy problems."

So what sort of Shell will Oxburgh leave? The group has some way to go before it regains the trust of investors, following the furore sparked by last year's disclosures about its massive overstatement of oil reserves.

Despite being fined by regulators and being sued for billions in the US by shareholders, Oxburgh believes the episode will make Shell a stronger company over the long run.

"It seems an extraordinary thing to say, but I think that, in five years time, Shell will be an enormously better company for going through the trauma of 2003 and 2004 than if it had not. I have to say there was a degree of complacency at Shell. And in recent years it failed to see changes in the outside world."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2005/04/17/ccshell17.xml

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