A former BP chief executive has called on government to stop 'demonising' the oil and gas sector as it seeks to raise $4trillion to invest in the energy transition.

Tony Hayward - who led BP for three years between 2007 and 2010 - has hit out at the stigma which is hitting investment in the energy sector at a time when it needs record levels of capital.

His intervention comes just days after Scotland's SNP-Green administration announced plans for a presumption against further oil and gas exploration in the North Sea - a move which has been described as "the worst form of opportunist populism" by a prominent member of the House of Lords this morning.

Writing in The Telegraph, Mr Hayward said that of today's high energy prices are not just a consequence of the war in Ukraine.

He said: "In the period since the Paris agreement in climate change, the allocation of capital to the fossil fuel industry has been dramatically reduced - it is currently running at around 60% of the level it was at in the decade prior to Paris and 60-70pc of the investment needed to satisfy current levels of demand - and the hydrocarbons industry has been progressively demonised to the point that it was not invited to COP 26 last year.

"The problem with this is that no one consulted the consumer. There was very little attention paid to the demand side of the equation and to the implications for energy security and prices of withdrawing fossil fuel investment before alternatives are in place."

Up to $4trillion needed

He continued: "Fossil fuel consumption reached an all-time high in 2022 with record consumption of coal, oil and gas and 2023 is projected to be even higher. Hence the high prices.

"Many will point to the pace of the build-out of renewable energy as the problem - and indeed more could be done. However, we also need to recognise that over the last decade renewable energy has penetrated the energy system faster than any new source of energy in history.

"Faster than coal replaced wood at the start of the industrial revolution, faster than oil replaced coal to usher in the modern world of mass mobility and faster than gas replaced oil as the world found a cheaper and cleaner fossil fuel in the 80s and 90s.

"The challenge is the scale required and continued demand growth. The world’s demand for energy continues to grow at between 1 and 2pc a year. According to the International Energy Agency, in order to sustain current levels of output the global energy system requires around $1.5trn a year of investment, principally in fossil fuels.

"But to transition to a low carbon system at the pace we want to, in order to meet the Paris goals, the necessary investment number is more than double that. The current investment into renewable energy is around $1.5trn a year vs a requirement of up to $4trn."

Mr Hayward urged governments to invest in unproven technologies to speed up the transition - and also had one other request.

He said: "The final area where we could all take a lead would be to stop, or at least scale back, the demonisation of the fossil fuel industry by activists, politicians and the media so that it can invest more as we navigate a very difficult transition - but that is probably too much to hope for."

Opportunism

Meanwhile, a prominent member of the House of Lords has hit out at the Scottish Government's latest energy strategy.

Addressing the Scottish Parliament last Tuesday, Cabinet secretary for net zero, energy and transport Michael Matheson said “unlimited extraction of fossil fuels is not consistent” with efforts to decarbonise, reinforcing that ‘maximum economic recovery’ is no longer government policy.

The published strategy document declares “there should be a presumption against new exploration for oil and gas” in the North Sea.

Writing in the Press & Journal today, Lord Bruce, who was the Member of Parliament for Gordon from 1983 to 2015, criticised the decision.

He said: "For the Scottish Government to push for an end to further oil and gas development, for which it is neither responsible nor accountable, is the worst form of opportunist populism.

"Every projection of transition to and achievement of net zero recognises a continued if declining use of fossil fuels, not just as a source of energy, but as an essential feed stock for other products."

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