HOUSTON (Reuters) - The oil and gas industry risks losing public support if progress is not made in the transition to cleaner energy, Royal Dutch Shell Plc Chief Executive Ben van Beurden said on Thursday.
The world’s second largest publicly-traded oil company plans to increase its investment in renewable energy to $1 billion a year by the end of the decade, van Beurden said, although it is still a small part of its total annual spending of $25 billion.
The CEO said that the transition to a low carbon energy system will take decades and government policies including putting a price on carbon emissions will be essential to phase out the most polluting sources of energy such as coal and oil.
“If we’re not very careful, with all the good intentions and advocacy that we have, we may, as a sector and society, not make the progress that is needed,” van Beurden said at the CERAWeek energy conference in Houston.
He said the “biggest challenge” the company faces is maintaining public acceptance of the energy industry.
“I do think trust has been eroded to the point that it is becoming a serious issue for our long term future,” he continued. “If we are not careful, broader public support for the sector will wane.”
The Anglo-Dutch company is one of the most vocal supporters of a carbon tax and has invested heavily in bringing on new supplies of natural gas, a cleaner burning fuel source.
“This is the biggest challenge as we have at the moment as a company ... The fact that societal acceptance of the energy system as we have it is just disappearing.”
Shell said on Thursday that its directors will from this year be rewarded in part on how well the company manages its greenhouse gas emissions and how much free cash flow it generates.
Reporting by Ron Bousso; editing by Gary McWilliams and Marguerita Choy