The Energy Crisis Shows How The World Should Ditch Fossil Fuels: Granholm

LONDON. According to the US Secretary of Energy, renewables play an important role in ensuring energy security and protecting against price fluctuations associated with fossil fuels.

Speaking to CNBC’s Steve Sedgwick at the COP26 Climate Change Summit Friday morning, Jennifer Granholm stressed the importance of diversification “towards clean energy so that we don’t depend on fossil fuel volatility.”

Granholm’s comments came at a time when a variety of factors drove up the price of natural gas and oil. On Thursday, OPEC and its oil production allies agreed to continue their current production plan, deciding not to pump more oil in the face of multi-year highs in prices and US pressure to cool the market.

“We saw what OPEC did yesterday, which was sticking to its plan and not increasing production,” Granholm said. “The bottom line is that for us natural gas is very local… gas companies, oil companies have a number of lease agreements that they do not produce. And the question is, why is this so? “

“This is double why we need to diversify towards clean energy so that we do not depend on the instability of fossil fuels,” added Granholm.

Granholm was told that US domestic oil production has declined in the past couple of years, even before Covid, due to a lack of investment incentives.

“I don’t know why there is no such incentive at $ 80 a barrel,” she said. “During Covid, this was not the case – they retreated because there was no demand, because people stayed at home, we know that. Now that everything is in order, production should match this [demand], rigs have been added, but not completely, ”she added.

“The bottom line is … that’s why we, as the globe, have to focus on getting our resources from the sun, wind, the technology we’ve developed in electric vehicles, and so on.”

This represents a longer-term strategy, Granholm said, and also recognizes that Europe is currently experiencing a short-term crisis with soaring natural gas prices.

“However, a lot of this, again, is based on geopolitical adversaries or competitors – however you describe it – who can manipulate prices.

Between January and October, European gas prices rose more than 500%, with consumers expected to pay significantly more for heating this winter. Many officials have accused Russia of not pumping more gas and have accused President Vladimir Putin of using gas as a geopolitical weapon.

Putin denied these claims and said the crisis was partly caused by Europe itself, as the region opted for short-term spot deals.

Granholm’s remarks came as the first week of COP26 drew to a close. The main conference is held in the UK in the Scottish city of Glasgow from 31 October to 12 November.

– Natasha Turak from CNBC contributed to this article.