Coal becomes ‘King’ as gas prices fly high, says Total CEO; rebound on cleaner energy targets
Points to be noted:
- As gas costs have risen, so has the use of coal, one of the most polluting fuels that Europe has been attempting to phase out.
- During a Russia Energy Week event in Moscow, Total CEO Patrick Pouyanne told reporters, “High price is not good news.” Isn’t it true that “rapid results are better for my firm, but for customers”?
- Pouyanne, like many other oil and gas CEOs, has warned about the perils of relying on renewable energy whose effectiveness is reliant on the weather.
Hike in prices, boon or bane?
Soaring natural gas costs have triggered a comeback in coal use, with industries in Europe and Asia resuming operations as temperatures drop and the world grapples with severe gas shortages.
Total Energies CEO Patrick Pouyanne emphasized the significance of price stability on Wednesday, claiming that lower gas prices will reduce the need for higher-polluting coal, but that the shift to cleaner energy has created a market imbalance.
During a Russia Energy Week event in Moscow, Pouyanne told reporter, Hadley Gamble, “High pricing is not good news.” “Of course, immediate results are great for my firm, but for customers,” isn’t it?
The CEO stated that replacing coal with gas is “good for climate change,” but that it must be done at a cheaper cost. “Because coal is today’s king, and coal is less expensive than all other energy sources.”
Electricity generated by coal has increased dramatically in Europe, with European coal futures more than doubling since the beginning of the year. The irony is obvious, given this occurs at a time when Europe is attempting to lessen its reliance on the polluting fuel. Meanwhile, since the start of the year, gas prices in Europe have virtually doubled.
How does demand energy affect climate change?
“As a result, today’s prices are too expensive for us.” “We need to establish stability and return to a more normal state,” Pouyanne remarked.
He went on to say that this is a global gas issue, arising from both a “big increase in gas demand from China and Asia,” as well as “increased demand for gas because of the energy transition, going from coal to gas, which is beneficial for climate change.”
“I believe there is a lesson,” Pouyanne remarked. “Another is that the more renewable goods we include into our electric grid, the more intermittent and weather-dependent sources we introduce.”
Other energy commodities, such as oil, have risen in recent weeks, with international benchmark Brent crude trading at $83.37 at noon ET, its highest level since 2018 and up 64 percent since the beginning of this year.
Energy prices have risen sharply as a result of supply chain interruptions and a shipping container scarcity, both of which have led to quickly rising inflation.