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The energy transition needs to happen in an orderly fashion, BP's chief executive Bernard Looney said on Tuesday, warning of renewed oil and gas price spikes if supply is cut too quickly without a drop in demand.
"Reducing supply without also reducing demand inevitably leads to price spikes – price spikes, leads to economic volatility," Looney said at the International Energy Week event in London today, weeks after BP scaled back its emissions targets and said it would produce more oil and gas for longer.
In early February, Looney stressed "an orderly" transition when he announced that the supermajor would be producing more oil and gas for longer, and now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%.
At Energy Institute's International Energy Week today, Looney once again highlighted the need for an "orderly transition" – affordable energy flowing "where and when it's needed... Investing in energy security and the energy transition."
"People today want an energy system that works. That provides secure, affordable and low-carbon energy - what the Energy Institute calls the triple energy crisis," Looney said at the event.
While saying that "Net zero is a massive opportunity for companies like ours," BP's top executive also called for an orderly transition with investments in all kinds of energy to avoid – as much as possible – the next spikes in prices.
"There's a risk that volatility will undermine popular support for the transition, an outcome which nobody wants," Looney said as carried by The Telegraph.
"We avoid that outcome by investing in today's energy system, as well as investing in the transition. And, not or."
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com