Forum for Innovation

We live in a world where companies are accused of not looking beyond the next quarter and governments of focusing solely on the next election cycle. Shell, a leading global energy group, has instead pioneered a process unparalleled in corporate planning. The company recently published its “New Lens Scenarios,” the latest installment in its 40 years of scenario planning. Shell’s latest report looks out to 2050 and beyond, and in so doing highlights the emerging issues that sit just over the horizon.  

A scenario process is not a forecast, but a rigorous analytical process to look at changes occurring in the world that could have a major impact on society and business. These changes happen within the context of many variables, such as policy decisions by dozens of nations over many years. The purpose of the scenarios is not to predict the future or to choose a path. Rather, it is to demonstrate the complexity of a future with many different paths and choices.  These choices are directly affected by policies that we collectively choose. The scenarios serve as a tool to broaden thinking about strategic planning and the future. They show the interconnectedness of policies and actions, and prove that the world is a dynamic and constantly evolving environment. 

The new Shell scenarios uses the concepts of “mountains” and ‘oceans” to describe the two lens.

“Mountains” is a world where control and stability are the key focus. The resulting rigidity dampens economic growth. Resources are developed steadily and cautiously.

“Oceans” is a world of devolved power where Influence stretches far and wide. Economic activity surges on a huge wave of reforms, yet social cohesion is sometimes eroded and politics destabilized.  Immediate market forces and higher energy prices result in new resource discoveries. 

What do these potential directions mean for economies and what do they mean for our energy future? One subcomponent of the scenarios, the resource stress nexus, illustrates the challenge of meeting society’s energy, food and water needs. By 2030, the world will need between 40% to 50% more water, food, and energy. This increases volatility since more energy requires more water, and more food and water require more energy. Meeting the energy, water, and food needs will be an opportunity for innovation and collaboration among government and industry.

The scenarios identify different pathways to meeting our energy needs. One such path to reducing emissions is greater natural gas development, embracing the abundance of unconventional gas resources in the world. This is not gas development to the exclusion of renewables, but in addition to them. This results in 25% less global emissions than in alternative scenarios, while also identifying the challenge of climate change mitigation.  

In our complex world, we need tools that look at the impact of policy directions and opportunities over the long term. Shell’s New Lens offers just such a view.