Shell CEO Ben van Beurden – whose major play for BG has been seen by analysts as a “huge bet” on natural gas – told an industry audience in February that “a shift from coal to natural gas” was needed to fight climate change. “When burnt for power, gas produces half the CO2 coal does,” he said.
In what has been called a “highly symbolic move”, China announced last month it would convert the last of four major coal-fired power plants around Beijing to gas next year.
Even Helge Lund, now BG Group’s CEO, said when he was head of Statoil before being poached that “one of our most important contributions is producing natural gas and replacing coal in electricity production”
In BP’s four-point plan he laid in out in what was a large chunk of his speech devoted to climate change, Svangerg said one of the super-major’s top priorities was to “push for a transition from coal to gas”, which he said would reduce emissions to half and buy “critical time” over the next decades as renewables mature.
“First and foremost, we want to put a price on carbon as we believe is the most efficient way to steer towards lower carbon alternatives,” he said.
“We want even more focus on energy efficiency. Huge strides have already been made here and much more can be done.
“We need to support lower carbon technologies until they reach the scale needed to compete.”
This last comment seemed a remarkable plug for renewables – a competitor that his industry’s opponents are spruiking to develop along with the demise of the fossil fuel industry.
However, he’s not overly worried renewables will take over any time soon.
“As companies, we also have a critical role in sharing our knowledge and do our part in encouraging an informed debate,” he said, echoing a common mantra heard here in Australia from industry about using science rather than rhetoric.
“For example, renewables are the fastest growing source of energy but from a very low base. We expect a growth from 2% of all energy today to maybe 8% by 2035.
“Furthermore, fossil fuels are not all equal when it comes to CO2.
“For example, a switch from coal to gas in power generation will cut CO2 emissions in half.
“So, as far as we can see, to balance the energy demands of the world and the need to address the growth in emissions requires a thoughtful approach.”
Yet he also warned those who are gleefully awaiting the destruction of the fossil fuel industry, Svanberg issued a sobering reminder for them that it was here to stay, like it or not.
“From our projections, to meet these [energy] demands, fossil fuels will be part of a balanced, sustainable energy mix for many decades to come,” he said.
“Even IEA’s 450 scenario for 2050 includes more than 50% fossil fuel.”
He also sought to dispel a myth around the very role fossil fuels play in the climate change mix.
“Let us be clear, greenhouse gases are not only a result of burning fossil fuel – 25% comes from land use and agriculture which also needs attention,” Svanberg said.
“This is not an excuse, just a fact.”
BP’s outlook for 2035 forecasts global GDP to grow with 80%, the demand for energy to increase by 37% and the greenhouse gases to increase by 25%, all basically driven by the fast economic growth in the non-OECD countries.
Svanberg said historically, energy and greenhouse gases have grown at a pace close to economic growth, but now the the world has made “encouraging headway” in disconnecting these historic trends through energy efficiency and low carbon initiatives.
“But, the increase is still in excess of what scientists and governments say is needed to keep the temperature rise within 2 degrees,” he said.
