NEW ORLEANS – Colette Hirstius, president of Shell USA, a New Orleans native raised in Gentilly and a Tulane graduate, spoke on the challenges and opportunities of the energy transition at the 2nd Annual Tulane Future of Energy Forum, held Sept. 10–12. Hirstius emphasized that the policies being developed today will determine whether Louisiana remains on the leading edge of energy innovation or risks losing future investment.
“The policies that we are developing today are vital,” Hirstius said. “In many cases, the investments that are required are more on the renewables and the carbon capture side. The policy that we have around oil and gas is pretty well established, so it’s in the new growth where we need policies in support of those investments to come here.”
Balancing the Energy Trilemma
Hirstius framed today’s energy debate through what she called the “energy trilemma,” a three-point challenge that has been recognized for several years:
- access;
- affordability; and
- sustainability.
“In the U.S., we struggle to keep the balance between these three,” Hirstius said. “If we look at how energy usage has evolved over the last hundred years, we’ve gone from a renewable system to a solely hydrocarbon system with very small amounts of renewables. We need to figure out how to transition from the 80% fossil fuels we use today, which is still about 1/3 coal, 1/3 natural gas and 1/3 oil, and transition to lower carbon intensities and then eventually, as the system evolves and grows, transition to much more renewables.”
“Right now we are very much at a point where we swing, based on different administrations, from one extreme to the next," Hirstius said. "Both of those extremes are challenging in finding a sound energy policy in the middle that we can really align with.”
The Limits of Speed - "Molecules to Electrons"
Hirstius cautioned against oversimplifying the pace of the energy transition.
“If I could change one misconception, it would be that it’s easy to transition to significant portions of renewables in a short period of time and that by no means is due to a lack of desire to transition,” she said. “But there are major constraints that are largely economic and accessibility driven. We’re not willing to not have air conditioning or not be able to fill up our car with either electrons or molecules. We want to have that choice at our fingertips.”
In energy circles, “molecules” refers to fuels such as oil and natural gas that can be burned while “electrons” refers to electricity delivered through the grid.
“There’s trillions of dollars of investment that is required and there are physical constraints of how quickly our energy system can evolve,” said Hirstius. “That said, we need to work on that transition with urgency and at the same time, in parallel, we need to continue to produce oil and gas in order to sustain the needs of our society and our desire to have access to energy.”
Technology and the AI Factor
Hirstius also pointed to the transformative role of digital tools in reshaping the energy workforce.
“It’s not that AI will replace drilling engineers. It’s that AI plus drilling engineers will replace drilling engineers. Whatever role that we do, plus AI, is much more powerful than our minds independently. So, there’s a huge amount of potential,” she said.
She added that as the industry embarks on this AI journey, “I wonder how different the energy consumption and demand needs will look over the next ten years compared with how they looked in the past.”
“The digital potential in the energy system is highly energizing and also personally challenging, but one that holds a lot of potential. The tools that younger generations have to deploy into the workforce are going to be so much richer than what most of us had. Watching how they can accelerate the pace of change is something to look forward to,” Hirstius said.
Carbon Capture and New Research
Carbon capture remains another pillar of Shell’s innovation strategy, though one facing economic hurdles.
“Right now in the U.S., the value proposition associated with carbon capture is very challenged. So, largely it’s being done as a positioning for the future, but not something that’s economically viable on an independent basis today,” she said.
Shell operates one of the world’s few demonstration direct air capture plants at its Shell Technology Center Houston (STCH). “It is one of the very few that has ever been constructed in the world and the STCH one will be scaled up to eight times its size,” Hirstius said.
Anchors in the Gulf and in New Orleans
Hirstius highlighted Shell’s Mars platform in the Gulf of Mexico, a joint venture with BP that is about to reach a historic mark.
“Mars is about to have a major milestone in its production – a billion barrels of oil. It has the best, top of the class, greenhouse gas efficiency of any molecule of oil in the world,” she said. “And it continues to get better.”
Mars, she added, provides critical security of supply. “Having this as a sovereign resource is something we take for granted in this country and something I think is a commodity to be greatly appreciated.”
Hirstius emphasized that many disciplines are required to answer complex questions about energy production and distribution and that if there was more discussion between the various links in the chain of energy production and distribution, some of the answers could be arrived at faster.
“Events like the Tulane Future of Energy Forum are extremely advantageous both for industry and universities,” said Hirstius. She highlighted that Hurricane Katrina disrupted New Orleans’ leadership in energy, and she called for renewed focus on positioning the city as a hub of energy innovation and economic development.
“One of the reasons why the Gulf has such an advantage in terms of offshore greenhouse gas reduction is because of the existing vast pipeline infrastructure. We didn’t just go out and build that pipeline infrastructure 200 miles offshore," said Hirstius. "It slowly evolved from the shelf, onshore production pipeline systems then went into shallow water, then deeper water. It was incrementally built which is highly efficient and very cost effective in how we evacuate production from the Gulf.”
Workforce and Global Lessons
Hirstius said that developing the next generation of energy workers requires not only training in emerging fields like renewables, but also maintaining strength in core engineering disciplines. That balanced approach, she suggested, mirrors the lesson Europe learned after the war in Ukraine, when reliance on cheap Russian gas left countries vulnerable.
"I wish the war in Ukraine never would have happened, but the reality is that the positive outcome is that there was a reliance on cheap Russian gas by our European peers that enabled Europe to develop a desire to move to sustainability without a full understanding of the reality of where the power came from," said Hirstius.
“There is more understanding today about the importance of the security of supply and the balance with affordability where sustainability is a super important part, but it was over-dominating the conversation. Now there’s a better understanding of that,” she said.
