‘Their skill at doing big projects is what governments now require,’ Beijer says, citing the infrastructure challenges that the ‘systemic transition’ to net-zero presents. ‘It’s not enough to tinker around with a subsidy level… I see [that governments will] take central control and all of a sudden those large companies, that know how to do large projects, are at the table. Because they have the expertise.’
Beijer, who worked as VP of Government Relations at oil major Shell until 2019, also cited the value of these company’s legacy assets and large balanced sheets to fund investment. Shell has a market cap of $185 billion dollars at time of press.
Big Oil’s Sincerity in Question
Christopher Caldwell, CEO of United Renewables and host of the Conversations on Climate episode that Beijer appears on this week, pushed back against the idea, asking ‘Isn’t it like asking Philip Morris how to give up smoking?’
Fossil Fuel firms have been widely criticised for resisting action on climate change, through lobbying, funding climate denial and spreading disinformation. Public attempts to rebrand by oil majors – such as BP’s ‘Beyond Petroleum’ campaign – have largely been judged a failure.
But this time is different for fossil fuel firms, argues Beijer, because ‘as long as you believe that there is an irreversible trend towards renewables… they realise it’s an existential crisis if they stick to their guns.’
Making use of existing infrastructure
Building out a hydrogen network to power clean industry was one use case discussed by Caldwell and Beijer. A 209 IEA report identified hydrogen as a transition fuel for industries that are difficult to decarbonise, such as chemicals, iron, and steel, as well as the lowest-cost option for storing renewable energy.
‘Hydrogen is just another gas… you can use some of the existing infrastructure that energy companies are actually operating at the moment, to distribute hydrogen,’ says Beijer. Without the cooperation and coordination of the fossil fuel companies who manage these networks, rolling out hydrogen distribution across the economy may prove prohibitively expensive or time-consuming. That alone is a reason for legacy energy firms ‘to stay involved in this particular transition, and be taken seriously.’
Conversations on Climate invites leading academics and business leaders to offer their expertise to bring a new angle to the climate change debate. Previous guests include Sir Andrew Likierman and Kritika Kumar.
The latest episode, featuring Paul Beijer, will be released on 29th July 2022. The full video of the interview will be available here.
All previous episodes can be found here.