CERAWeek, USA and EU divided on climate

CERAWeek, USA and EU divided on climate

Rita Lofano
For US Energy Secretary, Rick Perry, shifting away from fossil fuels is "immoral", while Shell CEO, Ben van Beurden, seizes the challenge of climate change

USA and EU divided on climate at IHS Markit CERAWeek mega energy conference in Houston. Shifting away from fossil fuels in favor of renewables “is immoral” because “it undermines the development of poorer nations,” was the warning given by US Energy Secretary, Rick Perry, while for the CEO of Anglo-Dutch Shell, Ben van Beurden, the issue of climate change is the main challenge facing the energy industry.

“It’s a personal issue for me,” said Perry, pointing out how he grew up in a marginal area of the lone star state where, 60 years ago, electricity was not taken for granted. “More oil and coal are needed to produce energy. The alternative - declared the former governor of Texas - is a return to the 19th century, when people walked around the house with lanterns and rode horses.”

More natural gas for sustainable energy

“There is no other issue with the potential to disrupt our industry on such a deep and fundamental level” as the climate, declared van Beurden, pointing out that it is essential to respect the international Paris Agreement to maintain the average increase in world temperature well below 2 degrees centigrade, thus underscoring one of the deepest divisions between the two sides of the Atlantic. Last June, President Donald Trump announced his intention to pull the USA out of the COP21, the agreement reached in Paris in December 2015, which was negotiated by his predecessor Barack Obama. The route indicated by van Beurden to counter climate change, as regards Shell, involves increasing natural gas production over oil. By 2050, the Anglo-Dutch group aims to produce three times more gas than crude, making it increasingly clean. Shell currently produces around 3.7 million barrels of oil equivalent a day, half of which are gas. But most of the emissions, pointed out van Beurden, are generated after Shell products are sold. The major is therefore intending to increase investments in wind power, biofuels and carbon capture and sequestration projects. Furthermore, in Europe, Shell is intending to increase the price of gasoline by one or two cents to fund trees to plant in forests.

A fast-changing scenario

“The energy landscape is changing fast so we must change too. It’s what the world needs,” insisted Shell’s CEO. “We are passionate about renewable energy. But the world, especially developing economies, will continue to need fossil fuels, as over a billion people on the planet live without access to electricity,” Perry argued. “The lesson we have learned is clear: we don’t have to choose between growing our economy and caring for our environment. By embracing innovation over regulation we can benefit from both,” said Perry. And while European oil companies are increasingly actively committed to meeting the Paris commitments, some analysts note a slight waning of enthusiasm on the climate front among US companies Chevron and Exxon Mobil. On Investor Day, which coincided with CERAWeek, Exxon CEO, Darren Woods, seemed to echo Perry's position, underlining the need for developing countries to generate more electricity to improve their living conditions, while containing emissions.



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