Energy company executives said on Tuesday they believe fossil fuels will play a role in the fight against climate change, as global markets grapple with tight energy supplies and skyrocketing prices.
Oil and gas supplies have tightened in many countries, boosting prices, especially 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 who have called 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.
Lorenzo Simonelli, chief executive of Baker Hughes said that 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.”
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 importance of liquefied natural gas as a key product for the energy transition.
TotalEnergies is monitoring demand in Asian countries, and it continues to build new LNG plants in the United States, Pouyanné said.
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.