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At Energy Summit, Climate Pits U.S. Against Europe


March 7, 2018, by Ron Bousso

HOUSTON (Reuters) – The U.S. energy secretary blasted renewable fuels champions on Wednesday while the head of Royal Dutch Shell Plc (RDSa.L) urged the energy sector to focus on global efforts to cut carbon emissions, reflecting a yawning trans-Atlantic gap on climate issues.

 Speaking at the CERAWeek conference in Houston, Shell CEO Ben van Beurden outlined an ambitious plan to reduce the Anglo-Dutch company’s carbon footprint and expand in renewables, and called on others to follow.

“The energy landscape is changing fast. So we must change, where change is what the world needs,” van Beurden said.

Shell and European peers including BP Plc (BP.L), France’s Total SA (TOTF.PA) and Norway’s Statoil (STL.OL) are becoming increasingly active in low-carbon energy and are vocal supporters of the 2015 Paris Climate Agreement. Until recently, climate has been less prominent in strategy presentations from U.S. rivals Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N).

The United States, under former President Barack Obama, helped negotiate the Paris agreement which calls for a gradual shift to renewable energy by the end of the century. President Donald Trump decided to withdraw last year.

Van Beurden gave an unusually strong-worded speech calling climate the biggest challenge facing the energy sector.

“There may not be total unity behind the Paris Agreement any longer, but there is no other issue with the potential to disrupt our industry on such a deep and fundamental level.”

U.S. Energy Secretary Rick Perry struck a starkly different tone, blasting the 2015 agreement to limit global warming. Perry said it was “immoral” to say people should live without fossil fuels.

“We are passionate about renewable energy. But the world, especially developing economies, will continue to need fossil fuels, as over a billion people on the planet live without access to electricity,” Perry said.

Perry extolled growing U.S. energy independence, as a boom in onshore shale drilling led to a rapid growth in oil as well as natural gas, the least polluting fossil fuel.

The rise of gas at the expense of dirtier coal helped the world’s biggest economy sharply reduce its carbon emissions over the last decade, as gas displaced much domestic coal demand.

“The lesson is clear (that) we don’t have to choose between growing our economy and caring for our environment, by embracing innovation over regulation we can benefit from both,” Perry said. Perry said at a later panel that Trump thought that the costs were not worth staying in the Paris agreement.

Executives at the Houston conference repeatedly noted growing demand for fossil fuels, and downplayed the overall viability of renewable energy or electric vehicles, noting emissions would continue to rise even if there was 100 percent adoption of electric vehicles.

On Wednesday, Mary Barra, chief executive officer of General Motors Co (GM.N), said the company’s “commitment to an all-electric, zero-emissions future is unwavering, regardless of any modifications to future fuel economy standards.” She said Congress should expand tax credits for electric vehicles.

Other executives spoke of moving to carbon capture technologies and carbon taxes. Robert Dudley, president of BP, said Tuesday that “at some point in the future a price on carbon has to be part of this answer.”

The projected growth of oil demand is “definitely not in line with the Paris climate goals,” said International Energy Agency Executive Director Fatih Birol, saying the industry must start using carbon capture sequestration (CCS) technologies.

In New York on Wednesday, Exxon Mobil Chief Executive Officer Darren Woods echoed Perry’s words at the company’s investor day, noting developing nations need solutions to generate more electricity.

Like others, Woods said Exxon advocates a carbon tax to limit emissions.

“By and large, we don’t see enough incentives to grow CCS in the marketplace,” Peter Trelenberg, Exxon’s manager of environmental policy and planning, said.

Few in Houston were as emphatic as van Beurden, who outlined how Shell is moving to meet its targets to halve carbon emissions by 2050. Steps include limiting emissions from operations and boosting natural gas production to reach 75 percent of company oil and gas output.

“Over time, this net carbon footprint ambition will transform our company’s product mix,” van Beurden said.

Reporting by Ron Bousso; additional reporting by Ernest Scheyder in New York; Writing by David Gaffen and Ron Bousso; Editing by David Gregorio and Lisa Shumaker



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