World still desperately needs oil: Shell boss challenges eco-activists to warn it would be ‘irresponsible’ to cut production
The CEO of energy giant Shell yesterday challenged climate activists, insisting it would be “dangerous and irresponsible” to cut oil and gas production while the cost of living is under pressure.
Wael Sawan, who took charge of the FTSE 100 firm early this year, refuted recent criticism from the head of the United Nations of fossil fuel investment.
His comments in a BBC interview are likely to further offend Just Stop Oil protesters, who have stepped up their campaign of disruption by targeting this summer’s Wimbledon tennis tournament and Ashes cricket series between England and Australia.
Sawan had already dismayed climate activists when Shell said it would keep oil production close to current levels and ramp up natural gas production – slowing the company’s switch to renewable energy.
Adamant: Wael Sawan, who took charge at Shell early this year, refuted recent criticism by the head of the United Nations of fossil fuel investment
Yesterday he told the BBC that the transition to renewable energy was not moving fast enough to replace fossil fuels.
In response to comments by UN Secretary-General Antonio Guterres, who labeled new oil and gas investments as “economic and moral madness,” Sawan said: “I respectfully disagree.
What would be dangerous and irresponsible is to cut oil and gas production so that the cost of living, as we saw last year, shoots up again.”
He warned that rising demand from China due to strict Covid lockdown measures and a cold winter in Europe could push prices up, adding that the world is still “desperately in need of oil and gas”.
Sawan said Britain’s lack of energy policy and taxation, with UK-derived oil and gas profits taxed at an effective rate of 75 per cent until 2028, risked making it a less attractive place to invest and that the government had to make a decision about whether or not to depend on domestic or imported energy.
Those comments are at odds with the views of the head of the International Energy Agency, a body that represents oil-producing countries.
Fatih Birol has said that “there can be no new investment in oil, gas and coal from now on” if national governments are serious about tackling climate change.
Sawan’s comments come on the heels of Shell’s change of strategy regarding the switch to renewable energy sources, which was announced last month.
That marked a change from two years ago, when then-boss Ben van Beurden said production would decline by 1 to 2 percent a year this decade from a peak in 2019, implying production would fall to about 1. 5 million barrels of oil. per day by 2030.
Eco-fury: Shell says it will keep oil production close to current levels and ramp up natural gas production
Rival BP has also rowed back on its plans for change.
In February, it announced it would cut oil and gas production by just 25 percent between 2019 and 2030.
That was well below the more ambitious previous target of a 40 percent reduction, in an apparent reversal by CEO Bernard Looney.
Despite this move, Shell has reiterated its goal of being a net-zero company by 2050 and investing between £8 and £12 billion in low-carbon energy over the next two years.
Jamie Peters, head of climate at Friends of the Earth: ‘It is no surprise that a fossil fuel company like Shell wants to continue extracting oil and gas unabated.
‘Let’s be clear, companies like Shell are fueling both the climate crisis and skyrocketing energy costs.
“They profit from the misery of ordinary people while destroying the planet, and they cynically advocate for us to continue to be locked into the volatile fossil fuel markets that are at the root of the energy crisis.”