Answering extreme proponents of unconventional and renewable sources of energy who insist oil and gas is a dying industry, chairman and CEO of Total S.A., Christophe de Margerie, says he embraces compromise but adds that compromise does not come cheap.
“There’s still this debate on the energy mix, and we all know the problems,” de Margerie expressed at the recent IHS Energy CERAWeek 2014, held in Houston. “We need to fight climate change and global warming. We can, and we have to, consider other options like solar, which is being part of this concern about cleaner energy — it has a great future if we control our costs.”
De Margerie predicted oil and gas resources as well as renewables will eventually learn to coexist in the marketplace.
“Energy mix is an important challenge, but both sides of energy will remain,” he said. “The demand for energy will be mainly through oil and gas, whether we like it or not. So instead of saying it will not exist, let’s find solutions.”
De Margerie admitted Total, Europe’s third-largest oil producer, had been “quite vocal” regarding the “Peak Oil” theory, recalling previous company forecasts indicating gas and oil reserves would eventually deplete, but that theory had been proven wrong.
“We have said, ‘there will not be enough oil and gas,’ and now when we say there is plenty of oil and gas, [we are told] we are sending the message that nobody cares about the environment,” he said. “But that’s not true. We do care.
“First, the problem today is not the oil and gas presence, or resources. The problem is access to those resources. They are not always in ‘great, easy’ countries, to say the least.
“Second, there are a lot of concerns about environment, so there is new legislation and a lot of additional requests from all governments with, unfortunately, sometimes no clear view of the impact on the cost of producing those reserves.”
Regarding how the influx of renewable energy resources have affected Total’s business strategies, de Margerie indicated Total is “trying to do its best with unconventionals,” but tight oil and shale oil, particularly resources generated from North America, would continue to contribute to Total’s model.
“We use 9 million barrels per day of new, unconventional oil from North America,” he explained. “If we don’t invest in others, there will be a shortage of oil, a shortage of energy, to face the demand.
“Yes, renewables, we know, are important and are part of the global subject. All energies are. But renewables cannot meet the gap.
“At the same time, as a company, we are responsible for delivering cleaner energy. ‘We are committed to cleaner energy’ is Total’s new motto. Solar energy … has a real potential for challenging clean development of conventional and unconventional possibilities.”
Regarding Total’s 2011 acquisition of controlling interest in SunPower, a solar energy company based in California, de Margerie said that while stocks plummeted shortly after that acquisition, initially losing more than $1 billion, investors were currently seeing an accounting profit.
“It would have been easy to say, ‘Abort!’’’ de Margerie revealed. “But this is a long-term business, not just purely a financial investment. Are we going to sell? No. We are here to deliver.”
Crediting “the skills of those great people of Silicon Valley, and the capacity of Total to develop the company,” de Margerie predicted the company was on track to become the top solar company of the next generation.
“That’s what we are betting on,” he added.
For more information, visit www.ceraweek.com/2014.
