Review of Mulder et al. 2020

The document reviews a report by Mulder et al. (2020), which was commissioned by Shell, regarding the impact of Shell's production limits on global energy consumption. The author, Peter Erickson, argues that Mulder et al. use misleading evidence to downplay the link between supply restrictions and price increases. Erickson asserts that reducing supply leads to higher prices and lower consumption, thereby reducing CO2 emissions. He further disputes the claim that other companies would simply take over Shell's licenses, citing national policy shifts in countries like Denmark and the potential for increased investment risk across the fossil fuel sector.

• The author agrees with the premise that a decrease in fossil fuel supply can increase prices and decrease consumption when other producers cannot fully compensate for the avoided supply, leading to lower CO2 emissions.
• The author contends that Mulder et al. use misleading data to suggest that production limitations have minimal effects on prices, specifically criticizing their analysis of Dutch gas prices and global oil consumption for failing to use counterfactual scenarios.
• Quantifying the emission benefits of supply restrictions is possible through economic elasticities; one cited study indicates that for every barrel of oil left undeveloped, global consumption is reduced by 0.2 to 0.6 barrels in the long term.
• The claim that other companies would inevitably take over Shell's licenses is challenged by the fact that some governments, including Denmark, France, Ireland, and New Zealand, are restricting or cancelling future licensing auctions to meet Paris Agreement targets.
• A reduction in Shell's production could increase the overall cost of extraction because Shell's costs are reportedly below the industry average, meaning replacement producers might be less cost-efficient.
• Legal or voluntary reductions in Shell's production could indirectly lower global production by increasing investment risks—such as reputational, litigation, or shareholder risks—which would raise the cost of capital for the entire oil and gas sector.

APA

Erickson, P. (2020). Review of Mulder et al. 2020. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2021/05/erickson-shell-letter-final.pdf

Chicago

Erickson, Peter. Review of Mulder et al. 2020. Stockholm Environment Institute, 2020. https://www.sei.org/wp-content/uploads/2021/05/erickson-shell-letter-final.pdf.

Wikipedia

{{cite report |last1=Erickson |first1=Peter |title=Review of Mulder et al. 2020 |publisher=Stockholm Environment Institute |date=11 December 2020 |url=https://www.sei.org/wp-content/uploads/2021/05/erickson-shell-letter-final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{erickson2020review, author = {Erickson, Peter}, title = {{Review of Mulder et al. 2020}}, institution = {Stockholm Environment Institute}, year = {2020}, month = dec, url = {https://www.sei.org/wp-content/uploads/2021/05/erickson-shell-letter-final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }