Investing in Tomorrow’s Fuels Today

We’ve acted as pioneers in oil and gas exploration, and now we're pleased to pioneer the energy technologies that will meet the needs of tomorrow's generations. Whether biofuels, hydrogen or other alternative fuels, Shell is actively searching for solutions to forward America’s energy strategy.

The reality is Americans have spent the last hundred years building this country on an oil and gas infrastructure, and developing an alternative is simply not going to happen in the next 10 or even 20 years. Over the short- and mid-term, most available energy sources will continue to be fossil-fuel-based.

Our joint venture, Motiva Enterprises, has broken ground on an expansion project at its Port Arthur refinery that will virtually double its total capacity up to approximately 600,000 barrels per day by 2010.  But, Shell also is investing in exploring new energy technologies.

Shell is a leader in the development of biofuels technologies

We have been involved in distributing biofuels for over 30 years. Our experience and investment in biofuel technology have helped to move the development of biofuels forward. We believe that we are now the world’s largest distributor of first generation transport biofuels, such as ethanol-blended gasoline.

In 2007, we sold over 1.3 billion gallons, mainly in the U.S., Brazil and Europe. In the world's largest markets of the northeastern U.S. and southern California, 80% of all ethanol sold flows through Shell facilities.

Not all biofuels are the same – there are significant differences in terms of feedstock, "well to wheel" CO2 production, performance and cost. Shell was one of the first energy companies to invest in second generation biofuels, that use non-food feedstocks, offer lower lifecycle GHG emissions, and CO2 production.

Our technical partnerships with the world's leading biotechnology companies are at the forefront of these developments: Iogen in Canada, CHOREN in Germany, and Codexis, HR Biopetroleum and Virent in the U.S.

However, second-generation biofuels will not be available in significant commercial quantities for five to 10 years and in this time, demand for first generation biofuels such as ethanol-blended gasoline will continue to grow as a result of U.S. government policy and mandates.

In addition, Shell is working to support the development of the infrastructure and technical solutions needed to make hydrogen - opens in new window a commercially viable fuel sometime in the future.

In the U.S., Shell has opened three demonstration hydrogen fueling stations in Washington, D.C., Los Angeles, Calif. and White Plains, N.Y. We believe that clusters of hydrogen filling stations will play an important role in bridging the gap between hydrogen demonstration projects and commercialization.

Therefore, we plan on opening several more hydrogen stations in the N.Y. and L.A. metropolitan areas in 2009. Shell is working closely with critical players – governments, the automotive industry, NGOs, academia and customers – to make hydrogen a practical, safe and accessible fuel. Shell Hydrogen is also doing some research on producing CO2 neutral or “green” hydrogen, possibly using renewable glycerol or sugar-based feedstocks to produce it.

In California, Shell is a founding member of the California Fuel Cell Partnership (CaFCP), with some 20 partners from the automotive and energy industries, fuel cell developers and government. These partners are cooperating closely to help ensure that vehicles, stations and regulations are in step with one another as the technology comes to market.

In this way, the CaFCP hopes to provide sound commercial solutions to a large California population faced with growing energy supply and air-quality challenges that also expects higher environmental standards.