MOSCOW (MRC) -- With its name change from Total to TotalEnergies amid its transition from fossil fuels, the major oil company is investing more in renewables and energy storage while decreasing emissions from its natural gas business, reported S&P Global with reference to CEO Patrick Pouyanne's statement Oct. 14.
"Everyone wants to transition, and there is huge pressure to quit fossil fuels, but fossil fuels represent 80% of the energy supply today on the planet," Pouyanne said in a fireside chat during the remotely held S&P Global Energy Summit.
It was 80.2% 10 years ago, and it is 80.1% this year, and in that time energy demand has increased, he said.
"We want to decarbonize energy, so we need to invest largely in renewables and decarbonized energy," he said, adding that TotalEnergies plans to invest 75% of its capital expenditures in hydrocarbons and 25% in renewables and electricity, "which is quite new."
Pouyanne said he is not sure that is the right balance, but it is the current strategy. Globally, the oil industry has not been investing enough in conventional oil production to fight against natural decline rates, he said.
The company said in late May during its shareholders meeting that investors had approved a resolution to change names from Total to TotalEnergies in order to represent the "strategic transformation into a broad energy company," according to the company's website.
Specifically, TotalEnergies has businesses focused on oil, natural gas, electricity, hydrogen, biomass, wind and solar power.
Pouyanne said the strategy is linked to the evolution of oil and power demand because the speed at which automakers are shifting to electric vehicles "is impressive" and is expected to lead to global oil demand declines, though it remains unclear when that will happen.
The company remains "quite bullish" on natural gas, and LNG in particular, because TotalEnergies sees gas as the right energy for the transition, he said.
"We are building today a multi-energy company with oil and gas, but also renewables and electricity, and tomorrow hydrogen and other technologies," Pouyanne said.
Asked about the role of gas in the energy transition and whether investing in gas-related assets locks in greenhouse gas emissions for the life of those assets, he responded that at first it is better to make electricity from gas rather than coal, which cuts the emissions in half, and power demand is increasing.
And while it is better from a climate perspective to generate power from gas instead of coal, the challenge for gas usage is reducing methane emissions, he said. Gas-fired power plants are controllable assets that can ramp up and down, which helps deal with renewable energy intermittency, and although batteries can help, long-duration energy storage remains a difficult challenge, Pouyanne said.
Regarding decarbonization strategies, Pouyanne said carbon offsets do not help and Total is focused on cutting emissions directly from its operations. Also, a certified and efficient carbon credit market that is clearly regulated is needed, "and we will work with that," he said.
As MRC informed before, TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.
According to MRC's ScanPlast report, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company rebranded itself from Total to TotalEnergies during Q2 2021. The French firm has announced allocating part of surplus revenues to share buybacks. Its 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.