By Stephanie Kelly and Scott DiSavino
NEW YORK (Reuters) -Energy company executives at a conference on the global transition to renewable energy insisted on Tuesday that fossil fuels, especially natural gas, are still needed at a time when global markets grapple with tight energy supplies and skyrocketing prices.
Oil and gas supplies have tightened in many countries, boosting prices since Russia invaded Ukraine on Feb. 24, prompting sanctions on Russia’s energy. U.S. gasoline pump prices topped $5 per gallon over the weekend for the first time.
TotalEnergies’ Chief Executive Patrick Pouyanne said tight global fuel supplies are partly due to oil and gas companies listening to political leaders calling for less investment in fossil fuels. He was speaking at the Reuters Events’ Global Energy Transition 2022 conference.
In recent years, governments worldwide have encouraged investment in renewable fuels to achieve pledged reductions in carbon emissions. Also, some oil and gas companies reined in exploration and production as investors pressed them to devote more capital to share buybacks and dividends.
Pouyanné said that as companies have listened to policymakers’ carbon emission reductions goals, that has left a lack of investment in fossil fuel production at a time when the world is calling for more energy supplies.
In April, TotalEnergies announced that it would sharply boost share buybacks this year and increase its dividend. It noted that soaring oil and gas prices drove a sharp rise in earnings.
Lorenzo Simonelli, chief executive of Baker Hughes said the market must focus more on reducing carbon emissions and less on fuel sources used to do that.
“We must decrease emissions at the same time as increasing supply,” Simonelli said. “Energy is good, emissions are bad.”
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Both TotalEnergies and Baker Hughes have made investments in renewable energy.
Earlier Tuesday the company announced that it had entered into an agreement with Adani Enterprises Limited (AEL) to produce and commercialize green hydrogen in India.
Simonelli and Pouyanné at the conference touted the liquefied natural gas.
Bala Wunti, general manager of the Nigerian National Petroleum Corp (NNPC), said the company gas as 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 must ensure “that there is a clear pathway from governments on what decarbonization will look like, and we cannot let these industries off the hook.”
Energy affordability and reliability will remain pivotal, said Bruce Niemeyer, Chevron Corp’s vice president of strategy and sustainability.
“It brings into frame that we have to do all of it. Indexing on just one aspect of energy or another isn’t really a sustainable long-term solution,” he said on the conference sidelines.
(Reporting by Stephanie Kelly, Scott DiSavino, David Gaffen and Richard Valdmanis; Editing by Chizu Nomiyama, Marguerita Choy and David Gregorio)
