Shell Report Highlights AI's Role in Global Energy Transition and Carbon Reduction

Artificial intelligence (AI) could significantly reshape global energy demand and boost carbon reduction efforts, according to a new report from Shell Plc (LON:SHEL), initially covered by Bloomberg. The report highlights AI's potential to enhance productivity through automation in manufacturing and help cut the energy system's carbon intensity by half by 2050.

Shell projects that oil demand will rise by three to five million barrels per day into the 2030s before peaking and declining. Natural gas consumption is expected to grow into the 2040s, while petrochemical demand could extend into the next century. Coal use is predicted to plateau before 2030, with natural gas following by 2035.

This is Shell’s first global energy outlook in two years and the first to incorporate AI into its forecasts. Although the report's scenarios do not reflect Shell's corporate strategy, all project that global temperatures will surpass the 1.5°C target set by the 2015 Paris Agreement.

AI is seen as a crucial driver for decarbonization, supporting industries like transportation and manufacturing in achieving net-zero emissions by 2050. Shell emphasizes the importance of widespread adoption of carbon management and removal technologies to meet this goal.

With AI’s increasing role, the energy sector is poised for transformation, with predictions of extensive electrification and scalable carbon-removal technologies in the coming decades. This shift underscores AI's growing influence on global energy and climate strategies.