Statoil to investors: climate fix possible with returns on oil for decades.

Letter to FT: Sir, In “A climate fix would ruin investors” (June 18), Martin Wolf addressed the potential impact of effective climate policies on the value of fossil energy companies. The key issue was to what extent current coal, oil and gas reserves will be burnable, and therefore valuable, to investors if future climate policies limit carbon emissions.”
“I believe oil and gas companies can continue to secure attractive shareholder returns in the context of globally effective climate policies and a long term sustainable energy mix.
There is without doubt a need to change world energy consumption patterns if we are to prevent an increase in global average temperatures of more than 2C above pre-industrial levels, with significantly lower greenhouse gas emissions.
By implementing a globally co-ordinated climate policy that secures a sufficiently high price on greenhouse gas emissions and stimulates energy efficiency improvements, the incentives would encourage a more balanced energy mix. This would lead to lower energy demand, lower carbon intensity and improve the chances of avoiding unsustainable temperature increases.
With such policies in place, the IEA, Statoil and other forecasters have demonstrated that we will still use significantly more gas in 2040 than today, and much more oil than can be produced from existing fields as they fall off their peak levels. Even if we are able to limit the temperature rise to 2C, between 60 per cent and 70 per cent of overall energy supply in 2040 must be delivered by fossil fuels.
This will require significant investments because existing reserves cannot deliver the required energy. Chosen investments will balance the considerations of risks, costs, commodity prices and profitability, and will deliver sustainable returns to investors.
I agree with Mr Wolf that we should worry about the climate but I also believe that climate policies that support sustainable development can satisfy investors in oil and gas companies. Those competing at the front will deliver the better returns over time.
Helge Lund, President and CEO, Statoil ASA, Stavanger, Norway”