Get used to a warmer climate, says CEO TotalEnergies

In 2040, the world will still consume more than 100 million barrels of oil, predicts Patrick Pouyanné, CEO of TotalEnergies. That policymakers must work on adaptation to a hotter climate.

Patrick Pouyanné, the CEO of TotalEnergies, has a businesslike and pragmatic view of the world. If his company, one of the world’s largest producers of oil and natural gas, is increasing investments in renewable energy, it is primarily for financial reasons. The energy transition will only make energy more expensive, and renewable energy will therefore become increasingly profitable.

But that does not prevent TotalEnergies from continuing to invest fully in new oil and gas fields, especially in Africa. Pouyanné aims for an annual increase in oil and gas production of 2 to 3 percent by 2030. Because that is the main reason why people buy shares in TotalEnergies, he believes. Pouyanné predicts that the world will still burn more than a hundred million barrels of crude oil per day by 2040. And so we better start preparing and adapting to a warmer climate, the CEO said in an interview with the Financial Press Agency Bloomberg.

Adaptation or mitigation

According to Pouyanné, it will take time to build a global, clean energy system that meets the demands of a growing world population. Policymakers must therefore demonstrate the necessary realism. “That doesn’t mean they have to give up on the Paris climate goals,” he says, “but it is their responsibility to work seriously on adaptation now.” The 2015 Paris Agreement agreed to keep warming below an additional 1.5 degrees above pre-industrial levels. But in 2023, oil consumption rose above 100 million barrels per day and the meteorological services recorded the hottest year on record since records began.

Adaptation or mitigation, it has been a matter of debate for a long time. Mitigation is reducing CO₂ emissions, adaptation is adapting to a warmer climate. Climate activists have always warned that too much emphasis on adaptation would take away the pressure to reduce the burning of fossil fuels in particular. International institutions such as the IPCC or the European Union believe that both strategies will have to go hand in hand.

Moving to New York

But Pouyanné’s statements are not intended to reduce the distrust of the climate movement. He criticizes European climate policy that encourages financial institutions to redirect their resources from fossil to green investments. According to Pouyanné, Europe is putting pressure on investors “to move faster than society” and American financiers are only too willing to take over. He warns that TotalEnergies is therefore considering moving from Paris to the New York stock exchange. The share would be valued much higher there.

High profits and dividends from oil and gas extraction are needed to keep shareholders satisfied and to finance investments in renewable energy until it produces positive cash flow in 2028. TotalEnergies now invests 5 billion annually in clean energy. Pouyanné sees the share of renewables growing further from 8 percent in 2023 to 20 percent of sales in 2030.