Jeroen van der Veer, former CEO of Royal Dutch Shell, retired on June 30 of this year, bringing to a close his 38 years with the company. In this video, the latest in our interview series McKinsey conversations with global leaders, van der Veer shares his thoughts on the future of oil, prospects for alternative energies, and challenges the industry faces in tackling the problems of climate change. Ivo Bozon, a director in McKinsey’s Amsterdam office, conducted this interview in The Hague in June 2009.
Watch the conversation in our video interactive, or read the transcript below.
McKinsey conversations with global leaders: Jeroen van der Veer of Shell
The former CEO of Royal Dutch Shell discusses leadership, climate change, and oil’s future.
In the industry: The future of oil
Jeroen van der Veer: Even if you are in the middle of a short-term economic crisis, I think it is very good to keep your eyes on the long term. So if I think about the long term in the energy industry, we take the year 2050—40 years from now—as a reference year in our mind and then we see three things. Energy demand will double, because we go from 6 [billion] to 9 billion people, and all people like to transport themselves and they like to have electricity at their home. So, even taking energy saving into account, that still works out as doubling of energy demand. Secondly, the classic oil and gas industry—what we normally refer to in our jargon as easy oil, easy gas—is not enough to supply all that demand. And thirdly, CO2, carbon dioxide, is already a problem now. And the solutions to what you can do about CO2? There are no easy solutions.