Oil and gas service giant Baker Hughes CEO: energy transition, need to be aware of three "throes"

Fossil fuels will continue to exist. The message sent by Lorenzo Simonelli, chief executive officer (CEO) of oil and gas services giant Baker Hughes, to those who are concerned about the soaring gas prices in Europe, some people are frightened, others are fascinated. They stay here because they help ensure the energy security of a country.

Simonelli said in an interview that we believe that the energy transition has three major pains. First, we must work together to accelerate the decarbonization process while eliminating emissions. Secondly, hydrocarbons will continue to exist. In fact, natural gas is a key factor. Third, we must work together, cooperate and actually adopt existing new technologies.

Some people will say that the current energy crisis in Europe is enough to prove that the EU and the UK are doing something wrong in the energy transition. For example, Mohamed Barkindo, Secretary General of the Organization of Petroleum Exporting Countries (OPEC), said that a new premium has emerged in the energy market, which he calls a "transition premium." This essentially means that despite the promise that energy prices are affordable, the energy transition is making energy prices even higher.

However, others are cautious not to blame anything related to the energy transition from renewable energy. Earlier this week, the International Energy Information Agency (IEA) mentioned several weather-related factors in the reasons for the surge in natural gas prices in Europe. These problems include a particularly cold and long heating season in Europe last winter, and recent times. Zhou Feng's availability is lower than normal.

However, its person in charge, Fatih Birol, quickly pointed out that it is inaccurate and misleading to push responsibility to the door of the clean energy transition. This seems to be a perfect example of the increasing reluctance of international organizations to challenge the image of renewable energy, even if there is solid evidence that in some cases they cannot deliver on their promises.

Some go even further. For example, a CNN article argued that the solution to the British wind disaster is to build more wind farms in different places, because a professor of international politics at the University of Manchester stated that “the wind will blow somewhere”.

Leaving aside the issues surrounding the qualifications and expertise of different commentators on this topic, it seems that any challenge to the energy transition is highly disapproving. However, in the face of the energy crisis mainly caused by the insufficient supply of natural gas, it is difficult for us not to challenge this transition, or more precisely the method of transition.

Natural gas was initially regarded as a bridge fuel, a bridge between the fossil fuel era and the post-fossil fuel and renewable energy era. However, as warnings about climate change become louder and louder, governments around the world have also made reduction targets. Increasingly ambitious, energy plans in Europe and the United States have begun to eliminate natural gas. Given the current energy situation in Europe, this may be a premature move. This is not the first time, and it may not be the last. Because high natural gas prices have pushed up the demand for coal, the European Union’s ambitions to become the greenest country in the green world are disintegrating.

Helen Thompson, a professor of political economy at the University of Cambridge, wrote in the Financial Times this week: The carbon price of coal has pushed up the demand for natural gas. But now, high natural gas prices are pushing up the demand for coal. If there are no serious intermittent problems with wind, solar, and battery storage, it doesn't matter. In fact, it is inevitable that there will not be much wind in Northern Europe this summer.

This intermittency is a problem in the field of renewable energy. Ignoring it for the sake of political correctness, dragging the party’s line will produce and have had consequences. It is precisely because of these consequences that fossil fuels are likely to maintain their position in the global energy structure for a long time. If the energy transition is to be successful, this is a last word that needs to be digested.