The CEO of Shell has said that it’s wrong to cut oil and gas production this decade, as we’re not ready for the transition to alternative energy.

The company Shell is run for the benefit of its shareholders, and the generation of cash and dividends remains the company’s core objective. From Mr Sawan’s perspective, he is saying and doing precisely what traditional shareholder theory says he has to do: Shell being the second largest company in the FTSE 100 index, he would struggle to justify anything other than “we’ll keeping pumping oil as long as we can get away with it” to his shareholders. Read the full article here.

We all know the other side of the coin. We are in a global energy transition and over the coming decades will unquestionably decarbonise the energy system, even if political and corporate actors remain firmly focused on the short-term.

The bizarre state of energy production is that solar and wind energy are now so much cheaper than fossil fuel-generated power that pure financial incentives – leaving the planetary arguments aside – are strongly in favour of alternative solutions. Yes of course there’s the matter of continuous supply (nuclear and nascent storage solutions are growing fast to fill the gap) and a more robust grid, but it seems a compelling logic that most economic growth (e.g. in China and India) will be powered by non-fossil solutions.

In the early 20th century, to the best of my knowledge, there were no horse transportation businesses deciding that cars were the future and as a result changing their business model. One century later, the world’s biggest oil & gas companies, with few exceptions, have their corporate heads in the sand and, despite beautifully greenwashed websites, are investing so little in alternative solutions that they seem to be writing themselves out of the energy systems of the future.

One day a major economy will respond fully to what scientists have been saying for decades and will create a political, regulatory and societal environment that not only embraces, but thrives under, a rapid transition to a cleaner world. When that day comes, history will record those who tried to hinder such progress.

Written by Nicholas Blain, Chief Executive.