In a recent interview with the BBC, Wael Sawan, the CEO of British energy giant Shell, made headlines by defending the reliance on oil and gas, claiming that cutting production of hydrocarbons would be “dangerous and irresponsible.” Sawan argued that the world still “desperately needs oil and gas” and that the transition to renewable energy is not happening fast enough to replace them.
Last year, the European Commission urged the European Union to accelerate its shift to green energy, aiming to reduce dependence on Russian oil and gas. However, the move to abandon cheap Russian fuel resulted in soaring energy prices and contributed to a severe cost-of-living crisis across the bloc. Sawan believes that reducing fossil fuel production would worsen the economic downturn, as it would limit global energy supplies and lead to increased bills amid growing demand from countries like China and the cold weather conditions in Europe.
Shell’s stance on hydrocarbons has faced criticism from climate activists. Professor Emily Shuckburgh, a climate scientist at the University of Cambridge, argues that the company should prioritize accelerating the transition to green energy instead of prolonging the use of oil and gas, especially considering the vulnerability of certain segments of society to the effects of climate change.
The CEO’s defense of hydrocarbons comes as the head of the United Nations, Antonio Guterres, recently described investments in oil and gas production as “economic and moral madness.” However, Sawan rebutted these remarks, emphasizing that cutting oil and gas production could result in a sharp increase in the cost of living, similar to what was witnessed last year.
Sawan also highlighted the consequences of the rush to replace Russian energy within the EU, particularly through a buying frenzy of liquefied natural gas (LNG). This frenzy led to a bidding war on the market, depriving poorer countries like Pakistan and Bangladesh of LNG. Sawan pointed out that such actions have serious consequences, as children in these countries were left studying and working by candlelight due to the lack of energy resources. He stressed the importance of a just transition to ensure that any energy shift benefits all parts of the world.
The Organization of the Petroleum Exporting Countries (OPEC) recently predicted that oil will remain irreplaceable for the foreseeable future. According to their estimates, global oil demand is expected to rise to 110 million barrels per day by 2045.
The debate around hydrocarbons and their role in the global energy landscape continues to divide opinions. As the world seeks to address the challenges of climate change and transition to renewable energy sources, discussions surrounding the future of oil and gas production will remain crucial in determining the course of our energy future.
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