Page 4 - AfrElec Week 10 2021

AfrElec COMMENTARY AfrElec

Fossil fuels’ future role

in the spotlight

The future role of fossil fuels in a decarbonising world was being
examined at the CERAWeek by IHS Markit conference this week

GLOBAL THE future of fossil fuels was up for debate as CEO, Andy Jassy, who will succeed Jeff Bezos as
the CERAWeek by IHS Markit conference was CEO of the entire company this summer, told the
WHAT: hosted virtually this week for the first time. The conference.
The future role of fossil event normally takes place in Houston, and was Jassy said his company had announced its
fuels was being examined cancelled last year as the coronavirus (COVID- goal for net-zero emissions at a time when it had
at CERAWeek this week. 19) spread globally, having been set to take place not entirely figured out how to achieve this target
at the same time that the outbreak was declared – which can also be said of other companies and
WHY: to be a pandemic in March 2020. countries adopting similar goals.
The energy transition Much has therefore changed since the last And if there cannot be enough renewable
is picking up pace, and CERAWeek took place, in 2019. Not only is the energy to meet all demand, that brings fossil
there is some debate world trying to overcome the pandemic – with fuels back into play, at least for a number of years
over the role oil and gas post-pandemic recovery a major topic at this to come.
will play. year’s conference – but there is also a new US
President with different priorities as far as energy Piece of the puzzle
WHAT NEXT: goes. Some differences of opinion emerged at this
Some players appear US President Joe Biden wasted no time in year’s CERAWeek about what sort of future oil
set to make a more taking steps to show that tackling climate change and gas will have in this context. Some, such as
concerted shift away from would be one of his major goals, in marked con- the CEOs of BP and Royal Dutch Shell, talked
fossil fuels than others. trast with his predecessor, Donald Trump, whose up their efforts to move away from oil and gas.
priorities were US energy independence – and “We’ve been an oil and gas company for 112
indeed energy dominance. years, and I think this is a moment where we
Changing geopolitics were discussed by do have to reinvent the company,” BP’s CEO,
panels and individual speakers, with various Bernard Looney, said. “We decided to really
challenges outlined. However, US Special Presi- embrace that energy transition, more as a mas-
dential Envoy for Climate John Kerry said on the sive opportunity and not look at it as some sort
second day of the event that he believed the US of threat to our core business.”
could compartmentalise its geopolitical tensions Shell’s CEO, Ben van Beurden, for his part,
with China to work together climate plans aimed said he believed his company’s oil output had
at limiting global temperature increases. peaked in 2019 and that targeting customers
seeking to reduce their own emissions presented
Centre stage a business opportunity.
This was one of numerous discussions about the Others, meanwhile, put more emphasis on
energy transition and combating climate change the importance of oil and gas and the demand
– topics which took centre stage during this they will continue to meet for some time.
year’s CERAWeek, having been gaining promi- “I think one of the key lessons [of the pan-
nence in recent years. demic] here is the essential nature of our indus-
In 2021, though, after so many countries, try,” said Chevron’s CEO, Mike Wirth. “We saw a
companies and regions have adopted decarboni- pandemic that created a global recession and an
sation targets since the last CERAWeek was held, enormous response in policy that created eco-
it was seen as more important than ever. How- nomic slowdowns around the world. And yet,
ever, even as they acknowledged the importance as we went through one of the most significant
of decarbonisation, many speakers stressed that shocks that we’ve seen to the global economy in
the path to net zero greenhouse gas (GHG) emis- decades, demand destruction for oil and gas only
sions would be a difficult one, and maintained averaged something like 9%, despite a crisis in
that there would be a need for investment in fos- which we were tested like never before. And so, I
sil fuels for years to come. think it demonstrates how important our indus-
“There just isn’t yet enough renewable energy try is to the world economy.”
to fuel all of the energy that people need. That’s A number of company executives said they
in developed countries,” Amazon Web Services’ expected oil and gas demand to grow over the

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