There is a lot of talk from big oil companies about fossil gas being here to stay. Bloomberg recently reported that “(f)rom Shell Plc to Chevron Corp., the world’s top producers plan to accelerate investments in [gas].”
The companies are getting two things wrong about the outlook for fossil gas. First, they seem to think that Russia’s invasion of Ukraine means that Europe and Asia are happy to continue to rely heavily on gas. The thinking seems to be that they need to source their supply from anywhere other than Russia and carry on as if nothing happened. They are ignoring the huge shift toward renewables and efficiency taking place as Russia’s actions clarify that a gas-reliant energy strategy will forever be vulnerable to geopolitics and price volatility. While China is signing some long-term liquified gas (LNG) contracts, it’s also accelerating its shift to renewables, just like Europe.
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