World must invest in both fossil fuels and renewables to ensure orderly transition: BP CEO
energy system as well as in renewable energy sources to ensure an orderly transition, BP CEO Bernard Looney has said.
“We must make sure that the energy transition is both rapid and orderly,” he told the B20 summit. “It needs to be rapid because every year since Paris (climate agreement), the emissions have risen in the world with the exception of the pandemic,” Looney said, adding that if the transition is not orderly, it would “impact the pace of the transition”.
Looney cited last year’s natural gas market shock when prices rose 7-fold, forcing people to spend a higher share of their disposable income on energy.
“Normally, governments spend between 10 and 12% of their GDP on energy, but last year that number was 20%. And if that number is that high, that's going to leave very little for investment in the transition,” he said.
High prices and tighter gas supply also pushed up consumption of cheaper but more polluting coal last year, Looney said.
He also stressed the need to work with the hard-to-abate industries like steel, cement and shipping.
“We have to go where the emissions are,” he said, arguing that merely setting up solar and wind farms won’t help those sectors.
BP has the operational and financial capability to set up new value chains for sustainable fuels for aviation and other industries, he said.
BP plans to invest $55-65 billion this decade in energy transition, Looney said. In 2019, BP spent just 3% of its capital outside the oil and gas sector.
