High fuel prices could erode public support for energy transition, Chevron CEO says
By Sabrina Valle
HOUSTON (Reuters) – Europe’s plan to double down on renewable fuels in response to rising gas prices may have the unintended short-term impact of accelerating costs and decelerate the vitality transition, Chevron Corp Chief Government Michael Wirth stated on Tuesday.
“That may erode the general public help that will likely be vital for the vitality transition”,” Wirth stated. “There’s a little bit of a paradox that I observe.”
Gas costs have been hovering around the globe amid declining investments in fossil gas tasks. Costs have accelerated since sanctions had been imposed this yr towards vitality exporter Russia following its invasion of Ukraine.
Gasoline and diesel costs are a high electoral matter in several international locations of the world, together with U.S. Congressional elections and a Brazil presidential run, each later this yr.
A persistent interval of U.S. diesel at $6 per gallon and pure fuel costs nearing $10 per million British thermal unit may have political implications for coverage makers, Wirth stated.
“One of many issues I fear essentially the most about is a interval of excessive costs that voters start to determine with vitality transition ambitions,” Wirth stated.
The CEO referred to as for coverage that might incentivize carbon emission reductions as an alternative of limiting oil and fuel provide earlier than renewable fuels comparable to photo voltaic and wind energy have scale to exchange conventional fossil fuels. Wirth defended the necessity of a pricing mechanism for carbon in the USA much like the one set in Europe.
“A value on carbon is a straightforward option to create a value sign that might create a enterprise mannequin that might mobilize capital,” Wirth stated. “We have to discover some form of a industrial framework. And it must be enabled by coverage.”
(Reporting by Sabrina Valle; Enhancing by Marguerita Choy)
