Friday, February 22, 2008

More on "Clearing the Air"

“Clearing the Air”

Further thoughts on Shell’s misleading advertising

My recent article criticising Shells’ “Clearing the Air” GTL advertising campaign has generated a (mostly) healthy debate here and there. I hope that those who have criticised my piece are now satisfied (a) That there are no inaccuracies in it (b) That I am certainly not anti GTL or anti any other development which will mean improvements to our well-being and to the environment in the future. But as someone who has been active in the world of advertising and communications for more than twenty years I believe that it is legitimate that I pass judgment on advertising which is as ill-thought-through and as misleading as this campaign.

To add to what I have already said about “Clearing the Air” let me quote and comment on the copy of the TV commercial (TVC) currently running in the UK. The copy runs as follows:

“As the air in the world’s cities becomes more polluted are we running out of options? To help solve problems like these we need creative thinkers with different ideas. Like starting with cleaner Natural Gas not Oil to create a gas to liquids fuel. Find out how one company [Shell] is helping to reduce city emissions by up to 40% on diesel vehicles.”
There is also an on screen caption at the end of the TVC which says:

In cars tested to May 2007 the typical range was 26% to 40%.

Let us just dissect this copy and how why it is misleading. The intention is to suggest strongly that the reason for the development of GTL technology by Shell was to “…help solve problems” like the fact that “the air in the world’s cities becomes more polluted”. The reason for the development of GTL technology was to produce middle distillate products from Gas in those (very) special situations where it was felt that conventional Gas reserves exploitation could be augmented by the conversion of some of the Gas to liquids – and where such conversion could be economic. The only commercial scale plant in operation at present is the 14,700 barrels per day facility in Bintulu Malaysia – this is equivalent to less than 3% of Malaysia’s total oil consumption. Whilst it is true that if the GTL product is consumed in Malaysia then it could perhaps have a miniscule effect on air pollution - but 97% of Malaysia’s growing oil consumption will be of conventional oil products from oil refineries. Malaysia’s annual growth in oil consumption far exceeds the annual production of the Bintulu plant.

In a few years time the much larger Qatar GTL plant will come on stream and this will produce 140,000 barrels per day. This will be roughly equivalent to Qatar’s total oil consumption in 2010 so it is reasonable to assume that much of the product will be consumed in Qatar – although some will have to be traded (no gasoline will come from the GTL plant so this local demand will continue to have to be ex-oil refinery). The traders will no doubt try to secure a price premium for the environmentally friendlier NGL middle distillate compared with conventional gas oil. If we look at this at a Middle East level then in 2010 the region is expected to consume 12.2 million barrels per day of oil in that year so the Qatar plant, if it is on stream by then, could provide just 1% of regional oil consumption if it is all sold in the region (including in Qatar). 99% of the Middle East regions’ oil consumption will be of ex-refinery products.

I mention these figures just to illustrate how misleading Shell’s advertising is. The claim is that Shell’s GTL “…is helping to reduce city emissions by up to 40% on diesel vehicles.” At a micro level this is no doubt true. Any one vehicle does perhaps indeed produce 26% to 40% less emissions on GTL compared with conventional diesel. The point is that there are hardly any vehicles on the roads anywhere in the world doing this and this will remain the case for the very long term indeed! Even in Qatar the beneficial effect will be small and across the Middle East region as a whole (if that is where the product is sold) it will be negligible.

GTL is a good thing and it would be churlish to deny that over the very long term it will have a place in the world’s oil consumption mix. But the “Clearing the Air” advertising wishes to suggest that Shell is at present “helping to reduce city emissions by up to 40%” with GTL - this is simply not true! Even in Malaysia where the only producing plant is operating the production is so small as to have no measurable effect.

Advertising has to be “Legal, decent, honest and truthful”. “Clearing the Air” fails this test – Shell should withdraw the campaign.

© Paddy Briggs February 2008