Former Bank of England chief says oil and gas can’t be ‘shut down overnight’

12/10/2023

MARK Carney says alternatives need built up to ensure a genuine transition, adding that “you can’t divest your way to net zero”.

The former Bank of England chief, who now serves as a UN special envoy for climate action and finance, was speaking at an event hosted by the International Monetary Fund (IMF) in Marrakech.

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Carney has previously questioned the security and reliability of the energy system, saying it’s “volatile, unreliable, and unsustainable”.

The comments come following Vladimir Putin’s indications that the pact between Russia and Saudi Arabia will continue to keep oil prices high.

The former Bank of England chief, who now serves as a UN special envoy for climate action and finance, was speaking at an event hosted by the International Monetary Fund (IMF) in Marrakech.

Carney has previously questioned the security and reliability of the energy system, saying it’s “volatile, unreliable, and unsustainable”, in an interview with The Telegraph.

“In economies that have conventional energy — so oil and gas production — you can’t shut those down overnight. That’s not right. That’s not a just transition.

“You need to build up the alternatives. You need to work with the communities, train people, undergo the transition and all elements of that need to be financed. And they are equally worthy.”

“You can’t overnight divest your way to net zero, you have to be investing all across the chain.” 

“We have a system that is expensive. It’s volatile. It’s unreliable, and it’s unsustainable. It reinforces the importance of not just sustainability in that energy system, but energy security,” he said.

Cuts to Saudi and Russian supplies will “most likely” be extended

Carney’s comments come following Vladimir Putin’s indications that the pact between Russia and Saudi Arabia will continue to keep oil prices high.

That’s despite market concerns that crude oil prices could be pushed to $100 a barrel due to the conflict between Israel and Hamas.

Russia’s gas sales to Europe have plummeted since their invasion of Ukraine last year.

The decision to withhold 1% of world demand from the market and impacting oil prices could frustrate other leaders struggling to contain inflation.

Putin told an industry conference in Moscow that Russia’s deal with Saudi Arabia to hold back oil supplies was “important for the predictability of the oil market, and ultimately for the wellbeing of all mankind.”

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