Oil executives talk down rapid shift to green energy as profits boom

Big Oil used an industry conference this week to argue against a rapid transition to green energy, as fossil fuel companies are emboldened by high demand and record profits despite rising alarm over climate change.

Executives attending the annual CERAWeek get-together in Houston expressed confidence that fossil fuel consumption would continue growing.

“The environment right now is very positive for the oil and gas industry,” Alan Armstrong, chief executive of Williams, the biggest US gas pipeline company, told the Financial Times. 

“Roll the clock back four or five years ago, they were like: ‘Oh, it’s all going to be renewables and batteries’ — and now they’re saying: ‘Wow, wow, this is going to be way too expensive.’”

The bullish comments at the event — which boasted a record attendance of more than 8,000 delegates.

Industry leaders argue consumers are unwilling to pay the costs associated with a rapid shift to wind and solar energy. Booming construction of power-hungry artificial intelligence data centres, population increases and sweeping electrification mean increases in all forms of energy, except coal, are needed to meet demand, they said.

Liam Mallon, head of ExxonMobil’s upstream business, said that the “brutal reality” was that the world was “not yet at a point where the big customers are willing to pay for the cost of this new energy and the consumers probably don’t really know the cost of it”.

“Until such time as there is a market-based economy and everyone understands the cost of it, consumers are paying more than they need to be paying for energy — simple, it’s not that complicated,” he said. “You can argue green all day and NGOs all day, but those are the facts. I think that message is beginning to resonate.”

US oil and gas production have smashed fresh records in recent months and the country now pumps more than any other nation in history. Meanwhile, surging prices in the wake of Russia’s invasion of Ukraine have propelled producers across the world to report record profits in the past two years.

“We should abandon the fantasy of phasing out oil and gas and, instead, invest in them adequately reflecting realistic demand assumptions,” Amin Nasser, chief executive of Saudi Aramco, the world’s biggest oil producer, told delegates to the conference this week.

The International Energy Agency anticipates global power consumption from data centres could surpass 1,000 terawatt hours by 2026, more than double 2022 levels and an increase equivalent to Germany’s total power use in the space of four years.

“These great things that civilisation is doing, the innovation that we’re developing, depends on our industry to deliver them,” said Toby Rice, chief executive of EQT, the biggest US natural gas producer. 

“When we’re talking about data centres, there’s not going to be: ‘Well let’s do wind and let’s do solar’ — this needs reliable, consistent power that can only be provided with hydrocarbons.”