The world could still use more than 100 million barrels per day of oil by 2040, making it vital to start preparing for and adapting to a warmer climate, said TotalEnergies SE CEO Patrick Pouyanne.
TotalEnergies is investing $5 billion a year in low-carbon fuels and renewable energy, while continuing to be a major supplier of oil and gas. The fact is that “it will take time” to build a clean global energy system that can meet the demands of a growing population, Pouyanne said.
“The responsibility of political leaders is to work seriously now on adapting” to higher temperatures, the CEO said in an interview at TotalEnergies headquarters near Paris on Wednesday. “That doesn’t mean you should give up” on Paris climate goals, but policymakers must face reality, he said.
Time is running out to keep the rise in global temperatures above pre-industrial levels below 1.5°C – the target set at 2015 intergovernmental talks in the French capital.
Global oil consumption surpassed 100 million barrels per day in 2023 and is expected to continue to increase this year and next, according to the International Energy Agency.
Achieving net-zero emissions by 2050 requires tripling renewable energy capacity by the end of the decade and more than doubling green investments to $4.5 trillion a year globally by the early 2030s, the IEA said in last year.
“It may be achievable,” Pouyanne said, but it requires global coordination. Europe’s current policies do not support the efforts of companies like TotalEnergies, which has been criticized by governments, investors and climate groups despite directing a third of its annual capital expenditure towards clean energy and low-carbon fuels such as biogas. .
Although the French company’s $5 billion annual investment in clean energy dwarfs that of its North American peers, European investors still “see the glass as half empty” and have been selling some of their stakes in oil companies, Pouyanne said.
European regulators are putting pressure on financial institutions “to be faster than society” in moving to net-zero emissions, making the region’s banks reluctant to finance fossil fuel projects for fear of being caught on the wrong side of the rules. of sustainability and climate litigation, said Pouyanne. However, US creditors will be happy to pick up the baton, he said.
TotalEnergies, which celebrates the 100th anniversary of its founding this year, needs to continue producing fossil fuels and clean energy for many years to come, Pouyanne said.
The company is expected to continue to increase its oil and gas production with new projects in locations such as the US, Qatar, Iraq, Brazil and Uganda. Strong earnings and dividend payments from fossil fuels are needed to keep investors happy and finance the growth of clean energy until this business can become cash flow positive in 2028.
TotalEnergies predicts that renewable energy and synthetic fuels will represent 20% of total energy sales by 2030, up from 8% last year. This can be achieved without large, expensive acquisitions, Pouyanne said.
Still, the company’s strong balance sheet puts it in a perfect position to buy parts of projects from wind and solar farm developers who are currently facing large increases in financing costs.
2024-04-28 23:08:50