Friday, January 25, 2008

Scramble versus Blueprints: The latest Shell scenarios

Back in the 1970s, Shell Oil developed scenarios planning, a detailed process to make flexible long-term strategies. The technique has spread, but Shell still makes use of the method they helped pioneer. The company's latest round of scenarios have been much in the news, and the Oil Drum has the text of internal Shell e-mail that summarizes their conclusions:

...At Shell, we think the world will take one of two possible routes. The first, a scenario we call Scramble, resembles a race through a mountainous desert. Like an off-road rally, it promises excitement and fierce competition. However, the unintended consequence of "more haste" will often be "less speed" and many will crash along the way.

The alternative scenario, called Blueprints, has some false starts and develops like a cautious ride on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technical innovation provides for excitement.

Regardless of which route we choose, the world's current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand. As a result, society has no choice but to add other sources of energy - renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.

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