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The Guardian - UK
The Guardian - UK
Business
Jillian Ambrose Energy correspondent

Shell boss under fire for saying cutting fossil fuel production is ‘dangerous’

Lorry with Shell logo on the side
Shell recently announced it is abandoning plans to cut oil extraction each year for the rest of the decade. Photograph: Nicolas Economou/NurPhoto/Rex/Shutterstock

Climate campaigners have condemned as “cynical” suggestions by the boss of the energy company Shell that cutting the world’s oil and gas production would be dangerous and irresponsible.

Wael Sawan claimed in an interview that reducing fossil fuel production, which is considered crucial in limiting the rise in global temperatures, risked worsening the cost of living crisis by limiting global energy supplies and pushing up bills.

The Shell chief executive, who took up the post last September, also argued that poorer countries would bear the brunt of a gas shortfall if they were unable to compete for shipments on the global market.

“What would be dangerous and irresponsible is cutting oil and gas production so that the cost of living, as we saw last year, starts to shoot up again,” Sawan told the BBC.

His comments defending ongoing oil and gas production, which experts say is incompatible with global climate goals, underline the shift in approach at Shell under his reign towards prioritising fossil fuels and increasing payouts to shareholders. Last month the FTSE 100 company announced it was abandoning plans to cut oil extraction each year for the rest of the decade.

Jamie Peters, the head of climate at Friends of the Earth, said it was “utterly ironic for Shell to be calling anything ‘dangerous and irresponsible’”.

“Let’s be clear, companies like Shell are fuelling both the climate crisis and the soaring cost of energy. They are profiting from the misery of ordinary people while destroying the planet, and they’re making a cynical case to continue locking us into the volatile fossil fuel markets that are the root cause of the energy crisis,” Peters said.

He pointed out that the comments follow news of the hottest June on record and searing heatwaves, and argued they “show just how incompatible and out of touch Shell is with the urgent need to invest in clean, cheap renewables and energy efficiency, so we can all benefit from lower prices and a safe, green future”.

Shell last month announced that it would hold its oil and gas production steady until 2030, after previously saying it would cut output by about 1-2% each year. Sawan is understood to have backtracked on the company’s modest climate goals in order to take advantage of lucrative fossil fuel prices which have been stoked by the war in Ukraine.

The surge in global energy prices following Russia’s invasion of Ukraine early last year helped Shell more than double its annual profits for the year to $40bn compared with $19bn in 2021.

Alice Harrison, a campaign leader at Global Witness, said: “Following a year of record-breaking £33bn profits, the only ‘danger’ Shell would see in cutting production is to their eye-watering profits.

“Whether blinded by the pound signs or simply wilfully ignorant, Shell’s CEO is wrong. Ending our dependence on fossil fuels and transitioning to green energy will serve both the planet and provide energy security for all. Shell have once again made their loyalties clear – profit over people and planet,” she said.

Sawan told the BBC that last year’s record high global gas market prices had meant poorer countries, such as Pakistan and Bangladesh, were unable to afford liquefied natural gas shipments, which were instead diverted to northern Europe.

“They took away LNG from those countries, and children had to work and study [by] the light of candles,” he said. “If we’re going to have a transition it needs to be a just transition that doesn’t just work for one part of the world.”

The claims contradict global scientific consensus that ongoing fossil fuel production is very likely to drive global temperatures to levels that would trigger catastrophic climate change and widespread loss of life in developing countries.

The International Energy Agency has said no new fossil fuel production can go ahead if global governments hope to limit global heating to less than 2C above pre-industrialised levels.

Claire Fyson, the co-head of climate policy at Climate Analytics, a global science and policy institute, told the BBC: “The idea that it’s a choice between our addiction to fossil fuels or working by candlelight is a gross misrepresentation of reality, when we know renewables are cleaner, cheaper and better for public health.”

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