LONDON – The head of global energy giant Shell says it would be “irresponsible” to cut oil and gas production at a time when the world economy is still dependent on fossil fuels.
In an interview with the BBC released Thursday, Shell CEO Wael Sawan also refused to rule out moving the company’s headquarters and stock market listing from Britain to the United States.
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“The reality is, the energy system of today continues to desperately need oil and gas,” Sawan said. “And before we are able to let go of that, we need to make sure that we have developed the energy systems of the future — and we are not yet, collectively, moving at the pace (required for) that to happen.”
The comments conflict with the recommendations of climate scientists and U.N. Secretary-General Antonio Guterres, who has called on the fossil fuel industry to “drive, not obstruct” the transition to renewable energy. Burning fossil fuels is the biggest source of the carbon emissions blamed for global warming.
Even Sultan al-Jaber — who is head of Abu Dhabi National Oil Co., one of the world’s largest oil producers, as well as president of this year’s U.N. climate talks — urged the oil and gas industry to reach net zero greenhouse gas emissions by or before 2050.
Guterres has said achieving the U.N.’s goal of limiting global temperature increases to 1.5 degrees Celsius above pre-industrial levels was still possible, but only if countries accelerate their efforts to cut carbon emissions.
“Investing in new fossil fuels infrastructure is moral and economic madness,” Guterres said in April. “Such investments will soon be stranded assets — a blot on the landscape and a blight on investment portfolios.”
Sawan said he disagreed with that position.
“I think what would be dangerous and irresponsible is actually cutting out the oil and gas production so that the cost of living — as we saw just last year — starts to shoot up again,” he told the BBC.
Sawan added that the transition to renewable energy must be “globally responsible,” so that it doesn’t favor one part of the world over another.
As energy prices soared last year following Russia’s invasion of Ukraine, wealthy countries bought up much of the world’s supply of liquefied natural gas, taking it away from places like Bangladesh and Pakistan, where children were forced to study by candlelight, he said.
Sawan took over as Shell’s chief executive in January. Under his predecessor, Ben van Beurden, the company set a target of eliminating net carbon emissions from both its operations and the products it sells by 2050.
Sawan also took aim at the British government’s shifting tax and energy policies, saying they risked making the U.K. a less attractive place to invest.
The U.K. last year introduced a temporary tax on the windfall profits of energy companies after Shell and British rival BP reported record earnings due to soaring gas and oil prices. That lifted the tax on profits from U.K. assets to 75% from 40%.
Sawan also noted that energy companies that list their shares in the U.S. tend to have a higher valuation than those in Britain.
Although he said Shell has no plans to leave London, he refused to rule out a future move.
“I would never rule out anything that could potentially create the right circumstances for the company and its shareholders,” he said. “Ultimately, I am in the service of shareholder value.”