The CEOs of some of the world’s leading energy companies have defended their position in the energy mix after the COP26 climate summit focused attention on the future of the industry.
Energy industry leaders and insiders were plentiful at COP26 in Glasgow as government officials, corporates and activists clashed over emission-reduction targets, pledges and deals to keep global temperature rises to a minimum at the COP26 climate summit.
Speaking on a panel at the ADIPEC energy forum in Abu Dhabi hosted by CNBC’s Hadley Gamble, the CEOs of BP, Lukoil, Occidental and Eni insisted they were diversifying their energy offering and reducing carbon emissions while also maintaining supplies of hydrocarbons that are still heavily relied upon.
“We just have to get the opportunity to explain what we’re doing and to make the case that it’s not about fossil fuels. It’s about the emissions,” Vicki Hollub, president and chief executive of U.S. energy company Occidental, said on Monday.
“And as long as we can to deal with the emissions and help others that use the products deal with the emissions too, then we have the right to be here. We have the right to provide the quality of life that oil and gas has provided … for the current rich countries, and we need to allow the developing countries the same right to become wealthier through the development of their natural resources,” she added.
Hollub added that Occidental was “committed to do the right thing,” and that “to be an energy or oil and gas company that survives into the future” the company had a social responsibility to reduce and negate its emissions, as well as to help customers do so as well.
After the COP26 summit concluded at the weekend, almost 200 countries signed up to pledges (with various timeframes) to cut methane emissions, end deforestation, curb the use of fossil fuels and their subsidies, offer more financial to poorer countries and “phase down” the use of coal.
The summit was seen as humanity’s last and best chance to keep the goal alive of limiting global temperature rises to 1.5 degrees Celsius above pre-industrial levels; many say the summit failed to achieve that.
Big Oil companies have long been in the firing line from climate activists so for CEOs like BP’s Bernard Looney, promoting the company’s role in the industry’s transition to greener energy has become a prominent part of his job.
There are questions about this green transition, however, as the world’s dependency on fossil fuels is likely to get even worse in the coming decades. The U.S. Energy Information Administration has said it expects global carbon dioxide emissions from energy-related sources to continue to grow in the coming decades.
Like other industry leaders, Looney has admitted that oil and gas will have a role in the energy mix for years to come. Speaking to CNBC’s Hadley Gamble on the ADIPEC panel on Monday, Looney said that energy transition takes time.
“We have to be very, very clear on what our objective is when we begin any dialogue in this space. And our objective is in this conversation about driving emissions down … Now that for some people is unacceptable because that means that hydrocarbons are part of the mix. This is simply a system that has been in place for decades and decades and decades. It’s called an energy transition for a reason. There is no light switch. It doesn’t happen overnight,” he said.
Looney said that BP was playing its role in the energy transition because, firstly, it believed it was “the right thing for society and the right thing for the world” and because “there is an enormous value opportunity for our company, trillions of dollars are going to get spent rewiring and re-plumbing the Earth’s energy system.”
“It’s going to be natural gas, it’s going to be solar, it’s going to be wind, it’s going to be hydrogen, it’s going to be nuclear … What a company like ours, not just ours, but a company like ours can do, it can knit together two different forms of energy to give customers what they want,” he added.
COP26 took place following a period of soaring energy prices amid heightened demand and a failure of supply to keep up.
International Energy Forum Secretary General Joseph McMonigle told CNBC on Tuesday that customers were facing a dilemma of having to rely on energy sources like oil and gas while trying to reduce their usage.
“What was interesting about this recent COP meeting was that it was against the backdrop of an energy crisis that we’ve talked about since early summer and I think that injected a lot of reality on both sides of this — the oil and gas, energy sector and those that are solely focused on the climate issue — and I think what we’ve come to realize is that we have to walk and chew the carbon at the same time,” he told CNBC’s Capital Connection in Abu Dhabi.
“We have to address the energy transition and climate issues and at the same time we need more investment in oil and gas to power the world economy.”
The world’s largest energy companies are keen to maintain their market positions amid the transition to greener energy. Lukoil President and CEO Vagit Alekperov, also speaking on the panel, noted that “currently, energy companies are leaders in the energy transition.”
“They’re the ones who implemented capital intensive, energy intensive, low profit projects associated with alternative energy, among other things. So we hope that this leadership of the energy companies will not only be maintained, but it it will be strengthened in the short term and the midterm,” he said. Alekperov added that energy companies fully understand that they have to develop alternative sources of energy.
“Our mission today is to make sure that the market gets the full volume of energy. What types of energy and fuels is a different question, but we should not allow energy poverty to happen,” he said.
Alekperov said he believed that Russian President Vladimir Putin, who did not attend COP26 to the consternation of other world leaders like U.S. President Joe Biden, would attend the next summit in Egypt in 2022.