Oil CEO Urges Scrapping Economic Model Based on Fossil Fuels

  • Eni's Descalzi seeks policy certainty from UN climate talks
  • Oil and gas companies `realize they have to be proactive'

A week before world leaders meet in Paris to adopt a global strategy on climate change, yet another expert says it’s time to scrap the planet’s reliance on fossil fuels.

The twist? He’s also head of one of the world’s biggest oil and natural-gas explorers.

The industry wants to be part of the solution to global warming but needs a consistent set of policies out of the Paris conference that encourages more climate-friendly fuels, Claudio Descalzi, chief executive officer at Eni Spa, said during a forum Monday in New York.

“We have to change the model, a model we’ve built over the last 200 years, which is based on fossil fuels,” said Descalzi, whose Rome-based company is the world’s seventh biggest oil producer by market value. He spoke at a Council on Foreign Relations panel discussion previewing the climate talks.

The two-week Paris conference will bring together almost 200 nations to hammer out a pact committing them to rein in greenhouse-gas pollution, including carbon dioxide released from burning coal, oil and gas. Descalzi said the industry can be part of the answer by replacing high-carbon coal with less polluting gas, while also investing in renewable power and energy efficiency.

“There is a new perception about the climate issue,” he told the audience. “For the first time, oil and gas companies that created CO2 emissions realize they have to be proactive.”

Stranded Reserves

Warnings that oil and gas companies will be stuck with millions of tons of unburnable reserves are unfounded, he told the audience, saying much of those supplies are likely to be tapped within 20 years. “It’s clearly inside the 30, 40, 50, 60 years where we have to change our energy mix, so I don’t think we have a problem at all with stranded reserves.”

The world needs a global strategy to reduce emissions that doesn’t put one region at a disadvantage to others, Descalzi said. He criticized what he called Europe’s inconsistent policies that subsidized wind and solar power while at the same time allowing coal imports to soar.

“We created a monster,” he said. “We spend a lot on renewables and our energy costs are very high. We have to avoid distortions that affect the competitiveness of our industries. Otherwise, we destroy ourselves.”