Energy leaders at transition conference still betting on fossil fuels

NEW YORK, June 14 (Reuters) – At a global transition conference, energy company executives insisted on Tuesday that fossil fuels, particularly natural gas, are still needed at a time when markets are struggling with tight energy supplies and skyrocketing prices.

Oil and gas supplies have become tight in many countries since Russia invaded Ukraine on February 24, prompting sanctions on Russian energy. Governments around the world have shifted their focus from sustainability and the energy transition to deep concerns about a global supply crisis and demands for more oil and gas.

Oil futures are up more than 50% since the start of the year. In the US, UK and China, retail fuel prices have all hit record highs in recent days amid sharply rising costs around the world.

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Patrick Pouyanne, chief executive of TotalEnergies (TTEF.PA), speaking at Reuters Events’ Global Energy Transition 2022 conference, said the global fuel supply crunch is partly due to oil companies companies are listening to political leaders calling for less investment in fossil fuels.

In recent years, governments around the world have encouraged investments in renewable fuels to achieve promised reductions in carbon emissions. Oil and gas companies have curtailed exploration and production as investors pressed them to devote more capital to share buybacks and dividends.

Pouyanne said that while companies listened to policymakers’ carbon reduction targets, it has left a lack of investment in fossil fuel generation at a time when the world is crying out for more energy supplies.

“We have to do it all. Indexing to just one aspect of energy or another is not really a long-term sustainable solution,” said Bruce Niemeyer, vice president of strategy and sustainability at Chevron. Corp (CVX.N), to Reuters. on the sidelines of the conference.

In April, TotalEnergies announced that it would sharply increase share buybacks this year and increase its dividend. He noted that the surge in oil and gas prices led to a sharp increase in profits. Read more

Lorenzo Simonelli, managing director of Baker Hughes, said the market needed to focus more on reducing carbon emissions and less on the fuel sources used to do so.

“We need to reduce emissions while increasing supply,” Simonelli said. “Energy is good, emissions are bad.”

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Both TotalEnergies and Baker Hughes have invested in renewable energy.

Earlier on Tuesday, Total announced that it had reached an agreement with Adani Enterprises Limited (ADEL.NS) to produce and market green hydrogen in India. Read more

Simonelli and Pouyanne at the conference touted liquefied natural gas.

Bala Wunti, chief executive of the Nigerian National Petroleum Corp (NNPC), said for the company that gas is a “destination point” for the energy mix.

On the sidelines of the conference, Lee Beck, international director of carbon capture for the Clean Air Task Force, said the world needs to ensure “there is a clear path from governments on what decarbonization will look like, and we can’t let these industries hang out.”

Countries in the northern hemisphere have more ability to transition their economies than those in the southern hemisphere, said Tokollo Matsabu, ESG analyst with the investor influence team at the Environmental Defense Fund.

“People are using the energy security crisis to say we need to expand, expand, expand, but from a climate justice perspective, it’s not fair that the US and EU want to expand their gas pipelines. .”

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Reporting by Stephanie Kelly, Scott DiSavino, David Gaffen and Richard Valdmanis; Editing by Marguerita Choy, David Gregorio and Chris Reese

Our standards: The Thomson Reuters Trust Principles.

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