During a recent visit to Washington D.C., Shell CEO Wael Sawan highlighted the critical importance of policy stability for the energy sector, especially in the lead-up to the US presidential election. Speaking at the Center for Strategic and International Studies, Sawan underscored how political decisions in the US capital-the "energy capital of the world"-significantly influence global investment strategies and spending.
Sawan's visit comes at a pivotal moment as Shell adjusts its focus towards its core petroleum business amid the energy transition. With President Joe Biden and the likely Republican nominee Donald Trump proposing starkly different energy policies, the upcoming election introduces uncertainty that could reshape the industry's landscape. Trump advocates for loosening environmental regulations and boosting oil development, mirroring his first term's policies, while Biden emphasizes climate change mitigation through incentives for low- and zero-emission energy sources and has paused new LNG export authorizations.
This political uncertainty places a premium on adaptable energy solutions. Sawan highlighted LNG as a crucial component to counterbalance policy and geopolitical volatility, emphasizing its role in meeting Asia's burgeoning industrial energy needs and transitioning from coal to cleaner gas. Shell anticipates that LNG will increase from 12% to 20% of the total gas market share over the next two decades.
Shell boasts a significant global LNG portfolio, with 67 million metric tons sold last year. The company's extensive operations span across ten countries and several import terminals worldwide, reinforcing its leading position in the LNG market.
However, Sawan criticized the US halt on new gas export permits, suggesting it undermines investor confidence and hampers the US's potential to supply its allies and capitalize on LNG demand. He warned that other countries are ready to fill the supply gap if the US steps back.
This discourse on policy stability and energy strategy occurs as the oil market reacts to recent OPEC+ decisions, with prices dropping $3 per barrel on Monday and another 1% on Tuesday, reflecting the market's sensitivity to policy shifts.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More