World still desperately needs oil: Shell boss defies green campaigners to warn it would be ‘irresponsible’ to cut production
The chief executive of energy giant Shell defied climate activists yesterday by insisting that it would be “dangerous and irresponsible” to cut oil and gas production amid falling costs of living.
Wael Sawan, who took over the FTSE 100 firm earlier this year, rejected recent criticism of the United Nations chief’s investment in fossil fuels.
His comments in a BBC interview are likely to further anger Just Stop Oil protesters who have stepped up their campaign of disruption by targeting the Wimbledon tennis tournament and the Ashes cricket series between England and Australia this summer.
Sawan had already caused consternation among climate activists when Shell said it would keep oil production near its current levels and increase natural gas production, slowing the company’s shift to renewable energy.
Uncompromising: Wael Sawan, who took over at Shell earlier this year, has rejected recent criticism of the United Nations chief’s investment in fossil fuels.
He told the BBC yesterday that moves towards renewable energy were not happening fast enough to replace fossil fuels.
Responding to comments by UN Secretary-General Antonio Guterres, who called new oil and gas investments “economic and moral folly”, Sawan said: “I respectfully disagree.”
What would be dangerous and irresponsible is to reduce oil and gas production so that the cost of living, as we saw last year, starts to skyrocket again.”
He warned that rising demand from China as it emerged from its strict Covid lockdown measures and a cold winter in Europe could push prices up, adding that the world is still “in desperate need of oil and gas.”
Sawan said Britain’s lack of energy policy and taxes, with UK-derived oil and gas profits taxed at an effective rate of 75 percent until 2028, risked making it a less attractive place to invest. and the Government needed to make a call on whether they depend more on national 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 there could be “no new investment in oil, gas and coal from now on” if national governments were serious about tackling climate change.
Sawan’s comments come after Shell’s change in strategy on switching to renewables, which was announced last month.
That marked a change from two years ago when then-boss Ben van Beurden said production would decline by 1-2% a year in this decade from a peak in 2019, implying production would fall to around 1.5 million barrels of oil. per day by 2030.
Eco fury: Shell says it will keep oil production near its current levels and increase natural gas production
Its rival BP has also backed down from its plans to change.
In February, it announced it would cut oil and gas production by just 25 percent between 2019 and 2030.
That was well below its previous more ambitious target of a 40 percent reduction, in an apparent U-turn by its chief executive, Bernard Looney.
Despite his move, Shell has reiterated its goal of becoming a net-zero company by 2050 and investing between £8bn and £12bn over the next two years in low-carbon energy.
Jamie Peters, Friends of the Earth’s climate chief, said: ‘It’s no surprise that a fossil fuel company like Shell wants to continue drilling for oil and gas without ceasing.
“Let’s be clear, companies like Shell are fueling both the climate crisis and the rising cost of energy.
“They are profiting from the misery of ordinary people while destroying the planet, and they are making a cynical case for continuing to lock us into the volatile fossil fuel markets that are the root cause of the energy crisis.”
