THE CARBON WAR

London, 29 th October 2014
Seven percent by 2035 109
Last week Occupy Democracy. This week Oil and Money. I lead a strange life,
it sometimes occurs to me.
Four hundred and fifty suits and twin sets from oil and gas companies in
40 countries assemble in the Park Lane Intercontinental to hear the captains of
their industry hold forth on their latest preoccupations. Today, there is a clear
and present danger, it seems. The oil price has fallen to $80 a barrel. I am going
to be very interested to see how they deal with this little wrinkle in their market.
But first, a tragedy. Christophe de Margerie, charismatic CEO of Total,
has been killed in an air crash in Moscow. The conference organisers call for
a minute’s silence.
I take the time to remember my own memories of de Margerie. All
I experienced of him was a panel debate at an oil industry retreat in Norway.
I had the firm impression of a man who was his own master. And I would have
liked to have known him better – to try and understand how his brain worked.
Why? Because of all the oil bosses, he seemed closest to an honest appraisal –
as I see it – of both oil-depletion threats and solar-energy opportunities. Total
has talked openly of pressures on global oil supply, and have invested billions
in solar, where ExxonMobil, Shell, BP and the rest talk of a “new age of oil”
and badmouth solar despite all evidence and converts to the contrary. Total
adverts festoon Heathrow at the moment: “Committed to Better Energy,” the
headlines read. The strap line, in smaller print, makes it clear what is meant by
“better”: Oil, natural gas, and solar energy – 100,000 women and men.” It’s a start.
First up is the OPEC Secretary-General, Abdal Salen el-Badri. He is very
clear on what $80 oil means. Fifty percent of US shale oil production is so
uneconomic it will have to be shut down.
I always learn so much at these industry conferences. I am particularly
looking forward to the first discussion of Kashagan this morning. Eni’s Franco
Magnani provides it. We are going to have this kind of problem again & again,
he says.
Not if investors spit the dummy, I think.
Bob Dudley, BP CEO, speaks just before lunch. He is the first speaker to
even mention climate change.
He gives BP’s view of the most likely energy mix by 2035. Oil, coal and
gas will each be at 27% of primary energy by then. Renewables are 2% today,
and will be 7% by 2035. This is not the most desirable outcome, he says, but
the most likely.