A reprint from Joseph Coates Consulting Futurist, Inc.

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Book Review by Joseph Coates from Technological Forecasting and Social Change

Energy Needs, Choices, and Possibilities, Scenarios to 2050
The Global Business Environment, Shell International 2001, 60 pp.
The shell game was a common swindle, familiar on thestreets of New York. The idea is simple, The swindler,
standing at a table, places a pea under one of three half
walnut shells and then moves the shells about at a rapidpace. The interested viewer places a bet that he can tellwhere the pea is. After close attention, he usually loses andnever quite understands why.
The Royal Dutch Shell Group has its own Shell game, in theform of scenarios that are produced every few years andused internal to the company to stimulate discussion andpromote planning. Recently, they have been offered to thepublic to broaden understanding of energy futures and tostimulate feedback. The Shell game, i.e., the scenarios
produced, is much like the New York shell game in that one
reads the scenarios with close attention to detail. They havea great deal of scope and plausibility, present relatively
tight-knit arguments, and come to conclusions which you,the reader, may find certain, likely, plausible, or possible andthen act accordingly, “accordingly” being the equivalent ofplacing your bet.
The similarity stops there. The Shell game is surely not aswindle, but a marvelously effective presentation of how,in this case, the energy situation might look in 2050.
There is a clear explanation of what scenarios are about:
Scenarios are a tool for helping managers planfor the future—or rather for different possible
futures. They help us focus on criticaluncertainties. On the things we don’t know
about which might transform our business.
And on the things we do know about in which
there might be unexpected discontinuities.
They help us understand the limitations of our‘mental maps’ of the world - to think theunthinkable, anticipate the unknowable andutilize both to make better strategic decisions.
(p. 6)The report is in four parts. The first is a general introduction
to energy choices and context. The second part is a scenarioemphasizing dynamics as usual, “A world where social
priorities for ‘clean,’ ‘secure,’ and ultimately ‘sustainable’
energy shape the system.” The third presents a quite
different scenario in which consumer preferences drive
toward a hydrogen economy. A small fourth section draws
some conclusions. A wrap-up of one page is a tightsummary of statistics and conversion factors.
The high points of the scenarios are the well-done andinformative graphics throughout, many of which are to mymind unique, at least as graphic presentations.

The foreword states three fundamental challenges over the
next 50 years:
 Giving all people access to the benefits of efficient,commercial energy from which nearly a fifth of us are still
excluded.
 Meeting the expanding and shifting energy needs of anurbanizing world as economic development raises theliving standards of billions of people.
 Preventing the pollution that damages ‘health, blights
environments, and threatens vital natural systems.
Each of the scenarios addresses in its own way the same
seven questions: When will oil and gas resources cease to meet risingdemand, and what will replace oil in transport?
 Which technology will win the race to improve theenvironmental standards of vehicles?
 How will demand for distributed power shape the energysystem?
 Who will drive the market growth and cost reduction ofrenewable energy sources, and how will energy storagefor intermittent renewables like solar and wind besolved?
 How might a hydrogen infrastructure develop?
 How will emerging economies like China and Indiabalance rapidly growing energy needs with rising importdependence and environmental effects?
 Where will social and personal priorities lie and how willthese affect energy choices?
The report is chock full of interesting points. For example,
gross domestic product in terms of purchasing power parity
at a US $3000-per-year income has demand forindustrialization and personal mobility taking off. At US$1O,OOO, demand slows as the main spurt ofindustrialization is completed. At US$15,OOO, demand
grows more slowly than income as services dominate. At US$25,OOO, economic growth requires little additional energy.
Following the pattern of 3.5% growth per year in the past
half-century, average global per-capita income will be US$20,000 in 2050. Then consumer preferences will bereflected in the increasing need for cleanliness,environmental and health considerations, and growing
value placed on flexibility, time-saving, and avoiding
disruption.
Two other big factors in energy futures are liberalized
markets and global energy demand. The report sees on aper capita basis demand being satisfied about 15% above
present European Union consumption. The scenario
background then goes on with other considerations to form
the context for the scenarios.

Review of Energy Needs, Choices, and Possibilities Technological Forecasting and Social Change 69 (2002) 527-531

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A reprint from Joseph Coates Consulting Futurist, Inc.

www.josephcoates.com

Call 202-363-7440 or e-mail us at info@josephcoates.com
Energy resources, new technology, and social-personal
priorities are laid out as shaping issues.
If you were using this book in a group context, a classroom,
or a think session, I would stop at this point in the book andhave the group create their own scenario in terms of theconsiderations and parameters mentioned above, tocompare with those later in the text.
The first scenario anticipates substantial improvements inthe efficiency of vehicles involving hybrid engines and otherconfigurations, and a boom and then a bust in theemployment of renewables: The energy system is seen to be
diverse and complex in terms of fuels and the technologies
for generating and employing them. Electrical energy
becomes the dominant energy carrier. The critical point ismade in the scenarios that electricity is not an energy source
but an energy carrier, carrying energy created from basic
sources such as coal, oil, and nuclear. The scenario
anticipates an oil scarcity so that by 2040 there will be an
expansion in bio-fuels.
The second scenario, on, the spirit of the coming age,emphasizes a breaking of paradigms. Cars are powered byfuel cells, being cleaner, quieter, and higher-performanceand having all kinds of electrical services, including digitalcommunication, pre-entry heating and cooling, and in-car
entertainment. They have a charming picture of what looks
like a bicycle being powered by fuel cells, with the seat of
the bicycle resting above the hydrogen container. Thedetails of the production, generation, and distribution ofhydrogen are adequately covered in terms of the limited
scope of the report. Chinese leapfrog into a hydrogen
economy and we, eventually, from the growing use of thefuel cells as heat and power sources create an expanding
demand for hydrogen that leads to a new infrastructure.
In this brief review, I can only note that the authors cite fivecommon features to the scenarios:
1.
2.
3.
4.
5.

the important role of natural gas as a bridge fuel over at
least the next two decades and the importance ofreducing supply security fears;
the disruptions that oil markets will face as new vehicle
technologies diffuse;
the shift towards distributed or decentralized heat andpower supply for economic and social reasons;the potential for renewables to be the eventual primarysource of energy and the importance of robust energy
storage solutions;the difficulty of identifying winning services ortechnologies in a period of high innovation andexperimentation (p. 58).

The document is well worth reading and working with byanyone with early to substantial understanding of energy
futures. It serves its purpose well as a stimulant to thinking.
Following are a couple of points to consider that I see areunfortunate with regard to the Shell concept of scenarios,
and then some specifics on content worth noting. Thewriters and company policy is to not have the Shell
scenarios labeled as forecasts. Yet why would a global
corporation of enormous scope and sophistication put
forward scenarios that were not plausible, or at least
possible? They seem to want to have it both ways, bymaking the scenarios meet criteria of context andplausibility, yet denying them to be forecasts. They are
obviously trying to get away from the question of how likely
each scenario is. That evasion muddies the waters andconfuses the reader as to what the functions, use, andreliability of the scenarios are. They are only stimulating andinteresting and worth our time if they have some substantial
plausibility.
The second point is that the material is extremely well
written, easy to follow, and straightforward, but it is oh-socorporate bland. There is no life to it, no sense of theinfluence of people on the decision process, nothing but theabstract politics of what might evolve, how the decisions
might come about, and by whom. There is nothing about
the human and social side of changing attitudes leading tosocial and economic change. A further difficulty, quite
understandable from an enormously large corporation
fundamentally, is being hooked on the free market system
as the primary means of generating, distributing, and using
energy.
Third, the scenarios are not nonnative. It could be invaluable
to Shell to try its hand at creating a scenario of its desirable
future and how to get there.
Some miscellaneous comments on the Shell paper may be
worth considering. In the energy supply forecast, thescenarios ignore gas hydrates. These are complexes formed
from a molecule of methane being surrounded by a cage ofwater molecules. They form naturally at proper conditions ofpressure and relative cold. Some estimates are that theknown deposits of gas hydrates are five or more times
greater than the total known reserves of petroleum andnatural gas together. The introduction of heat breaks up thecomplex and the methane bubbles free. Methane is themain component of natural gas. Gas hydrates could radicallyalter the future energy picture by adding decades to ourcarbon fuel supply, presumably at some increment in cost,which in turn would lead to conservation measures. On theother hand, the availability of gas hydrates becomes
irrelevant if we have to move to radical energy alternatives
to carbon sources because of greenhouse warming.
It was good to see the scenario give a nod of warning about
methanol, otherwise known as methyl alcohol, as a potential
fuel by citing possible health problems. Years ago, theBrookings Institution had a report out on new automotive
fuels that was rather positive on methanol. I called one of
the two authors and pointed out that methanol was aneurotoxin and was widely known, particularly during theReview of Energy Needs, Choices, and Possibilities Technological Forecasting and Social Change 69 (2002) 527-531

Page 2 of 3

A reprint from Joseph Coates Consulting Futurist, Inc.

www.josephcoates.com

Call 202-363-7440 or e-mail us at info@josephcoates.com
prohibition era, for causing blindness in people who
mistook it for ordinary drinkable ethyl alcohol. The response
to my call was so much disbelief that I was effectively
dismissed by her attitude proclaiming me to be a nut case. I
later contacted the Environmental Protection Agency (EPA)
and pointed out that methanol was a neurotoxin, and theresponse to that was even more bizarre. They were aware of
its toxicity but believed that by the time methanol came in
as a significant fuel, the electronic controls in theautomobile would be such that no car would ever be out oftune. I asked what percentage of cars was out of tune thenand what special mechanism was going to police the nationin the future to be sure all cars are in tune. We did not end
that conversation on a cordial note.
The scenarios assume that atmospheric carbon dioxide willstabilize at about 550 ppm by volume, substantially higher
than the present concentration. There is no discussion thatwould be either assuring or disquieting on what the effectsof that might be on the biota, on the growth of plants, on
the respiration of animals, and so on. In our species, one of
the factors controlling the rate of breathing is theconcentration of carbon dioxide in the blood, presumably atsome substantially higher atmospheric concentration than
today’s, there would be adjustment problems.
A last point: The report, neither in contextual backgroundnor in scenario one, addresses the question of whether witha suitable stimulus the automobile industry could, in areasonable time period, develop greatly improved internal
combustion engines (“improved” miles per gallon of fuel).
There is no reason to believe that the automobile industry
has exhausted the possibilities for new engines or materials
research that would allow one to raise the operating
temperatures of current engines substantially higher andthereby make them more efficient.
----------------------------------------------------------------------Energy Needs, Choices and Possibilities, Scenarios to 2050
is available from the Shell company Web site:www.shell.com

Review of Energy Needs, Choices, and Possibilities Technological Forecasting and Social Change 69 (2002) 527-531

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