Energy executives at transition conference still lean on fossil fuels

NEW YORK, (Reuters) - Energy company executives at a conference on the global transition insisted yesterday that fossil fuels, especially natural gas, are still needed at a time when global markets grapple with tight energy supplies and skyrocketing prices.

Oil and gas supplies have becomeconstricted in many countries since Russia invaded Ukraine on Feb. 24, prompting sanctions on Russia's energy. Governments worldwide have shifted their focus from sustainability and the energy transition to deep concerns about a global supply crunch and demands for more oil and gas.

Oil futures have climbed more than 50% since the beginning of the year. In the United States, United Kingdom and China, retail fuel prices have all hit records in recent days amid a broad rise in costs worldwide.

TotalEnergies' TTEF.PA Chief Executive Patrick Pouyanne, speaking at the Reuters Events' Global Energy Transition 2022 conference, said tight global fuel supplies are partly due to oil and gas companies listening to political leaders calling for less investment in fossil fuels.

In recent years, governments worldwide have encouraged investment in renewable fuels to achieve pledged reductions in carbon emissions. Oil and gas companies reined in exploration and production as investors pressed them to devote more capital to share buybacks and dividends.

Pouyanne said as companies have listened to policymakers' carbon emission reductions goals, that has left a lack of investment in fossil fuel production at a time when the world is calling for more energy supplies.

"We have to do all of it. Indexing on just one aspect of energy or another isn't really a sustainable long-term solution," said Bruce Niemeyer, Chevron Corp's CVX.N vice president of strategy and sustainability, to Reuters on the sidelines of the conference.