Shell CEO Warns of Policy Instability Risks Ahead of 2024 US Presidential Election

Shell CEO Wael Sawan has cautioned the United States about the risks of volatile policy decisions, particularly in the lead-up to the 2024 presidential election. During a two-day visit to Washington, D.C., Sawan highlighted the importance of maintaining a stable policy environment for the energy sector, especially since the US remains the world's top liquefied natural gas (LNG) exporter.

Why this matters: The stability of the energy sector has significant implications for the global economy and climate change mitigation efforts. Volatile policy decisions could lead to uncertainty and instability in the market, affecting investors, consumers, and the environment.

Sawan's warning comes at a critical time when the US prepares for an election that could significantly reshape the country's energy framework. President Joe Biden and likely Republican nominee Donald Trump propose starkly different energy policies. While Trump advocates for loosening environmental regulations and boosting oil development, Biden emphasizes climate change mitigation through incentives for low- and zero-emission energy sources.

During his visit, Sawan stressed the importance of LNG as a vital component to counterbalance policy and geopolitical volatility. He noted that LNG plays a vital role in meeting Asia's growing industrial energy needs and in transitioning from coal to cleaner gas. Sawan also criticized the US halt on new gas export permits, suggesting it undermines investor confidence and hampers the US's potential to supply its allies and capitalize on LNG demand.

Sawan's remarks come as Shell adjusts its focus towards its core petroleum business amid the energy transition. Shell sold 67 million metric tons of LNG last year and operates across ten countries and several import terminals worldwide, reinforcing its leading position in the LNG market. The company anticipates that LNG will increase from 12% to 20% of the total gas market share over the next two decades.

In addition to his comments on policy stability, Sawan expressed support for President Biden's climate agenda, specifically the Inflation Reduction Act (IRA). He stated that the bipartisan infrastructure law and IRA are creating jobs and a clean energy supply chain. "You're creating jobs. You're actually starting to anchor new industries. And over time, what you will do is you will create supply chains locally that are able to satisfy the demands of many of these industries," Sawan said.

However, Sawan's main criticism of the Biden administration focused on its decision to pause new LNG export permits until it completes a thorough review of the climate impacts of the LNG building boom. He emphasized the need for stability and predictability in the energy system, stating, "My message is one of pleading for stability and predictability in the energy system."

With the 2024 US presidential election approaching, the future of the country's energy policy remains uncertain. Sawan's visit to Washington, D.C., highlights the critical importance of stable and supportive policies for the energy sector, which will have significant implications for the global LNG market and the broader energy transition.

Key Takeaways

• Shell CEO Wael Sawan warns of risks from volatile US policy decisions.
• Stable policy environment crucial for energy sector and climate change mitigation.
• US presidential election could reshape energy framework, impacting global LNG market.
• Sawan supports Biden's climate agenda, criticizes halt on new gas export permits.
• Stable and supportive policies essential for energy sector and energy transition.