The Role of Oil and Gas Companies in the Global Energy Transition
The fossil fuel industry has come under scrutiny for its impact on climate change. However, Susannah Pierce, President of Shell Canada, believes that oil and gas companies cannot be solely held responsible for the pace of the global energy transition. Pierce made these comments during an interview in Calgary, where the 24th World Petroleum Congress is taking place. This prestigious conference brings together executives and government officials from oil-producing nations around the world.
The theme of this year’s congress is the energy transition and the industry’s net-zero greenhouse gas emission goals. Prominent figures such as Exxon Mobil CEO Darren Woods and Saudi Arabia’s Minister of Energy are scheduled to speak at the event. Pierce, recently named Business Leader of the Year by the Canadian Chamber of Commerce, will also be addressing the congress.
Shell is actively investing in electric vehicle charging, hydrogen, biofuels, and wind and solar energy, alongside its traditional oil and gas operations. However, Pierce emphasizes that the speed of global decarbonization relies on the transition of the entire economy and not just the fossil fuel sector.
While there has been a renewed demand for fossil fuels due to concerns about energy security following Russia’s invasion of Ukraine, some companies have been criticized for prioritizing short-term profits over long-term climate progress. Shell, for example, faced backlash for abandoning its plan to reduce global oil production, and Suncor Energy has also faced criticism for focusing on the present opportunities in the oilsands instead of transitioning to low-emitting and renewable fuels.
Pierce acknowledges that oil and gas companies provide a product that the global economy continues to depend on. She states that it is challenging for companies to deny their customers the energy they demand. However, she believes that transitioning to a lower-carbon economy requires government incentives across all industries, particularly in fossil fuel-intensive sectors like cement, steel manufacturing, shipping, and aviation.
Pierce expresses concerns about the upcoming federal government’s mandated emissions cap on the Canadian oil and gas sector. She argues that penalizing the industry and impacting its profitability will hinder its ability to invest in lower-carbon opportunities. She advocates for a Pan-Canadian framework for decarbonization rather than singling out one sector.
The government of Alberta, Canada’s main oil-producing province, opposes the emissions cap and vows to challenge any such legislation. However, recent polls suggest that most Albertans support some form of emissions cap on oil and gas production. Pierce believes that while Canadians want the energy sector to contribute to fighting climate change, they may be opposed to measures that could harm the oilpatch and potentially result in job losses and price increases.
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