Page 7 - FSUOGM Week 10 2021

FSUOGM COMMENTARY FSUOGM

Jassy said his company had announced its Indeed, the International Energy Agency
goal for net-zero emissions at a time when it had (IEA) estimates that producers will need to
not entirely figured out how to achieve this target invest $500-600bn per year in new oil and gas
– which can also be said of other companies and projects in order to keep up with global demand.
countries adopting similar goals.
And if there cannot be enough renewable Brighter outlook
energy to meet all demand, that brings fossil The outlook is brighter for natural gas, which
fuels back into play, at least for a number of years was touted by many as being a transition fuel
to come. that has a potentially longer lifespan than oil.
Indeed, van Beurden said that Shell will continue
Piece of the puzzle to invest in gas even as it moves away from oil,
Some differences of opinion emerged at this adding that he believed gas would outlive oil for
year’s CERAWeek about what sort of future oil at least a decade.
and gas will have in this context. Some, such Others – particularly prominent LNG players
as the CEOs of BP and Royal Dutch Shell, – echoed these expectations.
talked up their efforts to move away from oil “When we look at LNG and natural gas, we
and gas. think it’s a perfect complement to renewables,”
“We’ve been an oil and gas company for 112 US LNG producer Cheniere Energy’s president
years, and I think this is a moment where we and CEO, Jack Fusco, said. “I think everybody
do have to reinvent the company,” BP’s CEO, will agree that natural gas is a key component of
Bernard Looney, said. “We decided to really a cleaner energy environment.”
embrace that energy transition, more as a mas- Chevron’s Wirth also said his company was
sive opportunity and not look at it as some sort “bullish on natural gas” and saw LNG as having
of threat to our core business.” “a very important role in the lower-carbon econ-
Shell’s CEO, Ben van Beurden, for his part, omy that we’re all working toward”.
said he believed his company’s oil output had And a number of other speakers expressed
peaked in 2019 and that targeting customers similar sentiments.
seeking to reduce their own emissions presented
a business opportunity. What next?
Others, meanwhile, put more emphasis on Some of these concepts, including that of gas
the importance of oil and gas and the demand as a bridge fuel, are nothing new and have been
they will continue to meet for some time. discussed at CERAWeek and other conferences
“I think one of the key lessons [of the pan- for some years. Other topics of discussion have
demic] here is the essential nature of our indus- evolved. Certainly, the issue of post-pandemic
try,” said Chevron’s CEO, Mike Wirth. “We saw a recovery and the changes that will come in the
pandemic that created a global recession and an wake of coronavirus (COVID-19) is a new area
enormous response in policy that created eco- of focus.
nomic slowdowns around the world. And yet, Additionally, the dialogue appears to be
as we went through one of the most significant increasingly shifting from simply discussing the
shocks that we’ve seen to the global economy in importance of reducing emissions to discussions
decades, demand destruction for oil and gas only of the practical steps involved and how chal-
averaged something like 9%, despite a crisis in lenges can be overcome.
which we were tested like never before. And so, I With more and more companies pursuing
think it demonstrates how important our indus- their own decarbonisation targets, there will be
try is to the world economy.” more to talk about in practical terms, based on
A number of company executives said they their experience.
expected oil and gas demand to grow over the And while some oil and gas companies will
next decade. be resistant to the idea of decarbonisation, the
“Hydrocarbons are still going to be essential energy transition increasingly appears to be
for providing energy to the world, especially in unstoppable. As the CERAWeek speakers sought
the near term,” Baker Hughes’ CEO, Lorenzo to point out, however, there are considerable
Simonelli, said. challenges ahead. ™

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