The dominant theme of the week was competition, and in particular the potential for increasingly intense rivalry between oil and gas companies in a world of tightening constraints on greenhouse gas emissions. Wael Sawan, Royal Dutch Shell’s new head of exploration and production, told the Financial Times that when world oil production starts to decline, “we need to be able to be the last ones standing”. Since the election of President Donald Trump, the trend in US federal policy has been to work against attempts to address the threat of climate change. Mr Trump during the week tweeted a quote from Fox News by Patrick Moore, one of the first members of Greenpeace, saying: “The whole climate crisis is not only Fake News, it’s Fake Science.” In the energy industry, however, judging from the agenda and conversation at CERAWeek, awareness of the importance of climate change is higher than ever. Responding to pressure from investors, politicians and the public, many of the executives in attendance talked about the significance of the threat, and the steps they were taking to respond. Some of the strongest comments came from executives based in Europe, where the focus on climate is sharpest. Eldar Sætre, chief executive of Norway’s national energy company Equinor, told the conference that the oil and gas industry could face “a crisis of confidence” that was “a real threat to our license to operate”. Bob Dudley of BP said “we are operating in a world that is not on a sustainable path”, and suggested there was a need for “a step change to correct our course” on emissions. One of the forces driving energy companies to pay attention to climate change is public opinion. There is also a growing pressure from politicians, in particular in the US because of the Green New Deal that was launched last month by Representative Alexandria Ocasio-Cortez and Senator Ed Markey. The Green New Deal’s radical strategy for transforming the US into a low-carbon economy through government intervention has attracted plenty of criticism already, and that continues. Representative Rob Bishop, a Republican from Utah, described the ideas behind the proposal as “tantamount to genocide”. In a more measured response, Ernest Moniz, a former energy secretary in the Obama administration, and Andy Karsner, who was a senior energy official under President George W Bush, wrote an article together for CNBC, calling for an alternative programme that they described as a “Green Real Deal”.
FT 16th March 2019 read more »