U.N. Secretary General: New Funding for Oil and Gas Production is 'Delusional'

The idea of lowering oil, natural gas, and gasoline prices by attracting new funding for exploration and production is ‘delusional,’ the Secretary General of the United Nations, Antonio Guterres, said Wednesday.

“New funding for fossil fuel exploration and production infrastructure is delusional,” Guterres tweeted. “Fossil fuels are not the answer. Renewable energy is.”

High energy prices are threatening to throw Europe into a recession and straining households and businesses in the U.S. The U.S. and OPEC+ nations are producing oil and petroleum near or at full capacity, leaving little room for expansion without additional investment.

Earlier this month, global head of commodities at Goldman Sachs Jeff Currie said that the only way to fix the energy shortage is increased investment.

“There is only one long-term fix to this problem and that is investment, harnessing large amounts of capital into this space to debottleneck it,” Currie said.

Currie said that investment funds and strategies focused on environmental, social, and governance goals had deprived the energy sector of investment worldwide. Most so-called ESG funds eschew investing in fossil fuel-related projects or companies. As well, investors and oil producers are still smarting from the collapse in oil prices during the pandemic that created billions of losses.

Global production has also been stymied by pressure on banks, from special interest groups and bank regulators, to reduce funding for fossil fuels. As well, leading Democratic politicians have threatened to stop the industry if it attempts to expand. On the campaign trail, then-candidate Joe Biden promised to wage a war on the American oil industry by terminating subsidies and drilling feasibility.

“I want you to look at my eyes. I guarantee you, I guarantee you we’re going to end fossil fuels,” he said in 2019.

“No more subsidies for the fossil fuel industry,” Biden said in 2020. “No more drilling, including offshore. No ability for the oil industry to continue to drill, period,” Biden said of his energy policies if he won the presidency. “It ends.”

The declaration that more investment is a “delusion” by the head of the U.N. will likely only discourage potential investors even further.