Shell Plc’s new boss, Wael Sawan, has said that cutting oil and gas output would be bad for consumers, echoing a pivot by other major producers toward fossil fuels and energy security.
“I am of a firm view that the world will need oil and gas for a long time to come,” Shell Chief Executive Officer, Sawan said in an interview with Times Radio. “As such, cutting oil and gas production is not healthy,” Bloomberg quoted him to have said.
Europe’s largest energy majors are increasingly echoing the strategies of their less climate-minded American peers and leaning into the oil and gas businesses that drove record profits last year and payouts to their shareholders.
BP Plc, Shell’s closest peer, said last month that it would slow the planned decline in its oil and gas production to guarantee the reliability of energy supply following the disruption caused by Russia’s invasion of Ukraine.
The renewed emphasis on fossil fuels follows a year of high and volatile prices after Russia’s invasion disrupted gas supplies and the recovery of economies from the Covid-19 pandemic drove demand for oil.
“We’ve seen of course through 2022 the fragility of the energy system,” Sawan said. “To see prices start to skyrocket, that’s not healthy for anyone, particularly consumers,” he added.
But at the same time, CO2 emissions rose to a record last year, meaning the world will need to move even faster if it wants to achieve its climate targets and avoid the worst impacts of global warming. To do that would require a steep cut in demand for oil and eventually gas as well.