CEO Speaker Series With Patrick Pouyanné of TotalEnergies

TotalEnergies Chairman and Chief Executive Officer Patrick Pouyanné discusses evolving trends in the global energy market in a changing geopolitical environment, the potential for increased transatlantic energy cooperation, the role of gas and renewable energies in the transition, and TotalEnergies’ multi-energy strategy.

The CEO Speaker series is a unique forum for leading global CEOs to share their insights on issues at the center of commerce and foreign policy, and to discuss the changing role of business globally.

 

YERGIN: Hello, everybody. Greetings to those here in the room and also to those online. Welcome to the Council on Foreign Relations CEO Speaker Series. And we’re very pleased today to have as our guest Patrick Pouyanné, who is both chairman and CEO of TotalEnergies.

Patrick became—it’s been now a decade that he’s been chairman and CEO of Total. A lot has changed during that period of time in the energy world, in Total, which only became TotalEnergies in 2021. And a lot seems to be changing in Europe, too. And so, Patrick, I thought we’d start there. Patrick and I will talk for about a half an hour, then we’ll open it up to questions both in this room and for those online.

Patrick, we’ve heard recently from the President of the European Union and the head of the European Central Bank suddenly talking about competitiveness in Europe. That suggests that Europe is not competitive. What’s going on?

POUYANNÉ: It’s a good remark. Yeah, it’s true that the competitiveness is coming back in the agenda of European Union which has been dominated, as you know, for the last, I would say, ten years by more the green deal, which was supporting all the policies. Why does it come into the agenda? In fact, we are facing, I would say, three issues around competitiveness. The main one, of course, is the energy costs. And, you know, and it’s coming—of course, it has been revealed since the war with Ukraine, in fact, Europe was benefiting, in particular the German industry, from cheap Russian gas. Also, leaders have integrated that as being a resource for Europe, as it was European gas. But it was not. And we discovered in ‘22 when Vladimir Putin used the gas as a political weapon.

And then the wake up was difficult, because we discovered that the security of supply for a country like Germany was not really clear, because they had no gas terminal. But then we had to import LNG, in particular from the U.S. And between the U.S. LNG to Europe at $8, $9, $10 per million BTU, and you get the Russian gas at three (dollars), makes a big difference. On the top of that, people should not forget that we have established what we call the ETS, which is a CO2 market, which went, since between 2015, some ten, twenty euro per ton of CO2, to today, eighty euro per ton of CO2, because it’s a regulated market. And EU countries and EU Commission have decided to diminish the number of free quota, so it’s more expensive. So you are adding a higher price of gas, higher CO2 price, and you are fully desynchronized from the rest of the world. So that’s the first topic of competitiveness.

So gas, you cannot do a lot of things. We have added CO2. It’s, in the end, a political—

YERGIN: But what about regulation, in general?

POUYANNÉ: Yeah. So that’s the first point. Then you add, with the green deal, a flurry of regulations. You know, and everything is regulated now. Because the idea was with regulation we could go quicker to these net zero ambitions. So it’s true for finance. You know, after the 2008 crisis there were some—a lot of regulatory. But when I compare what happens for the U.S. banks and what is today in U.S.-European banks, the U.S. made some regulations. But then they drop them. The Europeans made the regulations, they are implementing them for ten years. And they are enforcing them. So you have regulation. Regulations for everything including deciding which technology we must use, with the car—the famous cars, EV cars. You know, you selecting your technology by—instead of just deciding what is the objective. So regulations. And then you have the famous CSRD, CS3D, and a flurry of regulations.

YERGIN: Explain the three C—what is it, three C—

POUYANNÉ: CS3D. CS3D, that’s a—but the idea was coming—it was coming from France. So I’m a little—(laughs)—

YERGIN: You’ll take credit.

POUYANNÉ: The intent is to say, OK, human rights are important, which is true. And so the intent, I would say, is somewhere good, at the base. But we must take care of human rights in the supply chain. And the global corporations are somewhere—should write their due diligence to make—should take actions in order that their values will be followed in their supply chain. So that’s the basic idea. Once you have said that, when do you implement that in a regulation? In France it was just five lines in the law which say—which put an obligation to us to—I would say, to put a sort of compliance program—to put something in place. At the European level, it became an incredible law, European law, with, I don’t know, 40 articles, plenty of details, where we become responsible for N minus one, minus two, minus three, where we could be penalized by 5 percent of all worldwide revenue—5 percent.

YERGIN: Not profits, but revenue?

POUYANNÉ: Revenue. And it’s not only applicable to European companies, but also to all be worldwide companies, international companies, who have revenue of, I think, one billion in Europe. Which means that a lot of U.S. companies are paying it. So of course, it becomes a sort of monster, as I said in interview, because it started from, I would say, a respectable intent to something which become an administrative mechanics, which is—and, in fact, an obligation which we cannot fulfill, because to believe that we can control all the supply chain, N minus one, N minus two, is just—we don’t have the capacity to do that. It is just a matter of being pragmatic.

And so that’s the type of things. And in fact, it went to—the initial idea—it’s interesting, I think, to understand the European dynamic, because in Europe the first text proposed by the commission was more or less acceptable. Then it goes to the parliament. And in the European Parliament there’s honestly plenty of lobbies, not really the corporate lobbies, but maybe other lobbies—NGOs—which transform the text in this monster. And it was no longer under control because then the council, which is supposed to be a counterpart of the parliament, in fact, on this type of good intent, it’s difficult for them to say this tax is going too far. And so at the end we had a law which is just problematic.

And I mean, it’s one of the expectations of the business, not only from European business but also international business—because of my colleagues have been very, I would say, outspoken on that. I remember my friend of Qatar—the European Qatar minister, said, I will not sell any more energy to Europe. Which, by the way, sometimes has more impression—it has more influence on European leaders when it’s come from abroad, not from European leaders, you know? And but—now, but I think it’s a serious matter. We are waiting for something which is called the omnibus directive, which is supposed to simplify. To be honest, I’m always afraid when people speak about—political leaders—simplification. (Laughter.) Generally when it’s simplified, you just add new regulations, you know?

So I’m waiting to see. The French president told us we will get rid of CS3D. I don’t know because, again, maybe they can say what they want, but at the end it’s a decision done not only by the leaders but also by the parliament. So it has to go again. And so I think it’s something—but it’s true that, to be honest, since September ’24 you have—the businesspeople are much more outspoken about these over-regulations. And of course, you had it on the question of energy over-regulations. Then, to be honest, wages in Europe are not very cheap. We know that for long. We have a social model. And then on the capital I would say as well you have to know about 300 billion euro of European savings are, in fact, going to the U.S. every year. By the way, it’s not taken into the commercial balance by the U.S. administration. They should not forget the 300 billion euro which, in fact, are today financing the Europe U.S. economy. But that’s a point. So there are many things.

YERGIN: So, Patrick, just on this topic, do you think Europe can reduce the over-regulation? I mean, we see the pledges.

POUYANNÉ: It’s difficult. I will tell you another reason why, is because, in fact, the European Commission does not have the fiscal power. And in fact, the only power they have is to regulate. (Laughs.) So they have—they don’t have a fiscal—so they are enabled because fiscals are handled by each country, you know? Or it’s a unanimity, which means that you never agree unanimous decision on fiscal matters. So, in fact, it’s a machine.

And we have created in Brussels, I don’t know if we need a DOGE program—(laughter)—but maybe a sort of—plenty of civil servant which are—in fact, you know, they are there to create regulations. So that’s a problem, you know? And we know that in our company, sometimes we have in our central services, in our holdings, you know, some entities, what they call governance. They begin to create themselves some jobs, you know, or some work, you know? And then you have a machine to create another regulation or another policy. And sometimes you must say, OK, let’s eliminate it. You know, we don’t have thousands, but, you know, that’s something.

So, it’s—in fact, it’s a question, can the Europeans really rethink somewhere their own model? But at the same time today, we’re clear, compared to the U.S. there is no—fundamentally, all that was the—there’s a strong belief that if we want to go to net zero you can do it not by voluntary demand, but you must do it by regulated demand. And this is a huge difference that I saw between, in fact, the U.S. approach and Europe. Europe wants to regulate the demand, to force the society and the economy to go to net zero. The U.S., with the IRA, wanted to promote the supply by innovation, et cetera, and more by the supply and the cost of the products. OK, with Donald Trump I’m afraid that all that is forgotten today. But, again, it’s—and so, with the European exit from this, I would say, mega objective, it’s not clear today whether they want to give up on that.

YERGIN: So you talked about the comparison between the U.S. and Europe. I was struck, when we’ve talked before, that Total is quite interested in making investments in the U.S. You’re the largest buyer of U.S. LNG. And you have set up—you have country chairmen for the different regions of the world. And apparently you have a country chairman, just for Texas. (Laughter.)

POUYANNÉ: Yeah, yeah. I love Texas. Texas is a country. Now, in fact, it’s because, you know, when we are an international company, we sit with the U.S. We want to invest in the U.S. But the U.S. is so big. It’s so huge that, in fact, we are completely lost, you know? And in fact, you know, for us, you know, we invest in the U.S. in LNG and in electricity. And in fact, the perfect land is Texas, where we are building a new plant, Rio Grande LNG, where we are developing gas plants and renewables. And there is a lot of space. So, yes, it’s a big country. It’s a growing demand of electricity. So it’s a nice place.

So when I met the governor of Texas I told him, OK, it’s a country. By the way, there was a Texas embassy in Paris in 2049 (sic), I think, which is a beautiful, old building next to Place Vendôme. It’s still there. It’s a hotel today. I invite you. And so he was happy. And I told him, OK, we have a country chair for Texas, you know? But that’s true. But in fact, it has been a consequence, by the way, for us of the Russian war. You know, we were heavily involved in Russia. And I decided to take actions. And we choose American, as I would say. I said, OK, look, my colleagues, forget Russia, because this war is just has some—many implication. We need to continue. We are one of the top three energy player. If we want to continue to be among the top three, it will not come—it will not come from Russia. Let’s go to the U.S.

So we have established—we had Cameron LNG. We have—(inaudible)—Rio Grande Energy in Texas. And now we are growing it. Today we export ten million tons of LNG from different—we uptake from different projects. Number one, ten out of eighty-nine, so more than 10 percent, will be at fifteen million tons by 2028. So we continue to grow it. And of course, it’s important in the relationship because it’s what I explained to the new administration, that not only we are the largest U.S. exporter of—LNG exporter, but we are also in Europe the largest holder of gas capacities. We control more than 20 percent of the gas capacities. So we are a perfect player to make—to fill the gap of the trade between the U.S. and Europe.

YERGIN: Well, let’s—I want to come back to the integrated strategy you have in Texas, but let’s pause for a second on LNG and natural gas. First, just in general, how do you see the evolution of the gas market?

POUYANNÉ: It’s interesting. There are many gas markets. You know, domestic gas markets, like Henry Hub, and then you have the LNG—the LNG gas market. The LNG gas market, I think, it’s quite easy to—it’s quite—it will be today until, I would say, end of ’26, the price will remain quite in tension today. It’s around $15-16 per bcm, because we don’t have much additional supply capacity. We have some. Of course, we have still the impact of Russian war. Recently the Ukrainians have decided to stop the transit of gas through their country from Russian gas. So it puts some tension. It’s cold. It’s winter. So we see we are in tension.

From ’27, there is a lot of new capacity coming on stream into—here in the U.S., but also in Qatar. Now we have all this. And that means that, in fact, it’s a market more or less of 400 million tons. We’ll add in three years something like more than 30 percent additional capacity. So it’s a shock of supply. It happens three times in the last twenty years. And each time that this type of addition supply come, of course, you see the price dropping because the demand cannot grow and absorb 30 percent more in three years. It will be absorbed. Why? Because the price will drop. The customer will be happy because of cheap gas. By the way, it’s good news for Europeans. They don’t need the Russian gas to come back quickly by ’28, ’29, 2030, we will benefit from the cheaper LNG price.

But it’s true. I’m convinced it will happen. Then it takes time to recover. It’s absorbed. It happened in 2010, in 2017-18, the same type of supply shock. So what does it mean for us? By the way, what we decided, and we have done it in in 2024, we signed a number of LNG contract, medium-term contract, with Asian buyers linked to oil, linked to Brent, in order to secure our revenues, our future revenue. So we signed from six million tons. You could tell me—ask me why these buyers are not thinking, as me, about—

YERGIN: Yeah, why are the buyers not thinking—

POUYANNÉ: Because, in fact, they draw some lessons from what happened in ’22. And they want to balance themselves as supply. They want to keep part on the stock, but also they prefer—they are not sure that another event like a Russian war or COVID could come. You know, it’s been so disruptions in this market, but they are—they want to protect themselves.

YERGIN: So let me follow up on that with a question that involves both foreign policy and, at the same time, involves the gas markets. Obviously, discussion in the last couple of weeks now, and President Putin has been sort of talking about it, do you see Russian gas coming back into Europe? And at what level? Or is it too soon to say?

POUYANNÉ: That’s a—that’s a—I mean, I will share with you I have no insiders of these guys. I think it’s a question. I would say, you know, before the war it was 150 bcm per year which were coming from Russia to Europe, 120 through pipes, thirty through—more or less 130—(inaudible)—energy. It’s quite clear that we will not come back to 150 bcm. That’s, I think, the over-reliance on the Russian gas. A number of countries have drawn some lessons and it will not be the case. I would also say that if there is a peace the U.S. will have a role in that peace. And I suspect that the U.S. will promote the U.S. LNG. And so they will not leave the Russian gas. I think then you have—Central Europe, I would say, all these land locked countries, is very difficult for them to avoid to be supplied by Russian gas. You’ve seen Hungary, Slovakia, Austria. So this piped gas, which is coming through Central Europe from Russia, I suspect we come back to supply Europe. It’s a third of what we had, little less than a third.

Then we have the Nord Stream, these two pipelines. The one which has been damaged, I would be very surprised that it will be rebuilt, to be honest. And it’s completely probably rotten, so you can forget. The other one, I don’t know. In fact, my view is that, of course, the German position will be a major, major thing, because will the Germans resist to the temptation to bring some Russian gas, some cheap Russian gas, back for their industrial competitiveness or not? It should be a big political debate. Of course, you see that Poland, the Baltics, you know, do they do not want that to come back. But what happens in Germany? I have no insiders there, but that will be a debate.

So I just can describe to you. France will become—I think, will be neutral in that debate. We don’t rely on Russian gas. And we have all—we are supplied by many over parts. We have the nuclear. So France’s position is not important in that debate. We could have one from political point of view. So I think it will be tense. And of course, we could imagine—because on the other side are the Russians, in fact, which has been a surprise to us, but they didn’t find any more outlet for their gas which is not coming to Europe.

YERGIN: Yeah, because the Chinese—

POUYANNÉ: The Power of Siberia 2 did not exist at all. The discussions are completely stalled. I think the Chinese have drawn the lessons, which is, OK, we don’t want to be the same situation as the Europeans, and to over-rely on the Russian gas. And in fact, these discussions did not progress. But I think, that many countries draw some lessons. And that’s what—I think why Vladimir Putin has damaged their position, which, when you use an energy which is fundamental for security of supply for customers as a as a political weapon, you afraid everybody. Not only Europeans.

So, that’s—I think it will be part of the discussion of any peace agreement, if there is one. It will be interesting. But my view is that the U.S. will want to push Europe in order to rebalance the trade deficit to take more gas from the U.S., which will be interesting to see up to which point it will go. The security of supply is less a problem for Europeans because, in the meantime, because of the war, the Germans are building a lot of the gas terminals. And so this part will be covered, which was not the case before. And so as I imagine, described to you, an oversupplied market, we could—we could play again. So a lot of politics. And we’ll see what comes of that.

YERGIN: But I think you are saying that the lesson of over-dependence on Russia will not be forgotten.

POUYANNÉ: I’m convinced of that. It’s not possible. And by the way, you have a lot of countries—yeah, no, that will not come back. That will not come back.

YERGIN: Right. Well, let’s turn back to Texas, and specifically you’re TotalEnergies. You’re not only—you do not only oil and gas. You do electrons as well. Just how this strategy has evolved, and how it’s working, and how it plays out in a place like Texas, or elsewhere in the world.

POUYANNÉ: Just first, I would like to say, with the U.S. administration, we are making addition of energy within our strategy. We never cut oil and gas. On the contrary, we continue to invest in oil and gas.

YERGIN: And, in fact, you have some big projects. We have a lot of projects. And in fact, we have a goal for 3 percent per year. We maintain our reserves, oil and gas, available life index more than twelve years. So we never said, because it’s a transition we forget oil and gas. Oil and gas is the energy of today. It’s our DNA. We love it. And we’ll continue to invest in oil and gas. But that’s true that we observed, and today, by the way, I spent two days here in the U.S. It’s all about electricity, electrons, datacenters. But for us, there is another energy which we should offer more opportunities of growth in the future. It’s electricity. Electricity, where we go to electricity from gas, gas to power, it’s the obvious way, by the way, in the U.S. to make part of the transition, because you avoid the coal, you go to gas. And you have a very flexible way to produce gas, but also from renewables.

So that’s the idea, positioning the company on a growing market, electricity. And I think, again, when I observe what happens, it becomes a reality. So some of our shareholders, we are asking questions today. In particular when it is in the U.S., they are happy. You know, we are participating too, and we benefit from this growing demand. In states like Texas it’s quite impressive. The demand for electricity has grown quickly. So being able—but at the end—and this is important. This where I agree with the new administration as well. It’s addition. And intermittent renewables do not give you the solution to what the customer wants. The customer, they want an available, reliable, and affordable energy, that’s sustainable as well, of course. But they wanted reliable, 24/7.

And when you have intermittent source, you need to complement that, right? And you need to have a backup. And that’s either batteries, but it’s still expensive, even if today in Texas each time we are building a solar plant we put batteries two hours, three hours, four hours.

YERGIN: Are they your own batteries these days, or?

POUYANNÉ: We are building, but we are also buying to others. And we have a company, battery company, within the group. But they are in—they are in competition with the others, so they have to be efficient. And also the gas fired power plant, because it’s very flexible.

So we build this, and with that, we sell to customers what we call the clean firm power, which is a product which is much better remuneration for us than just solar PPE. So it’s a mix. We need all of the above, I would say, of energies. We need more energy, fundamentally, for a growing economy, for meeting a new demand. And so it’s oil and gas and also electricity.

YERGIN: So can you just describe what—a little more about what an integrated power strategy—what it looks like?

POUYANNÉ: Integrated power, that means that—in fact, people try to return to renewables. No, because we want to make money, to be clear. So we are there to make profits. In fact, we—like in gas, or like in oil—we are investing and we are a player in all the elements of the value chain. So we produce from gas plants, we produce from renewables. We have batteries, because we need to store. We have some trading business. We have some customers’ business. And it’s all this value chain what we call the integrated power, which allow us to deliver a return of 10 percent, like last year, and so—which is quite good. We made $2.6 billion of cash after five years. We have $20 billion of assets. So I think it’s—for the time being, it’s a success.

And so I’m happy to see that other players will come to the electricity. So it’s a different energy than oil and gas, which is more complex because you cannot store it. So that’s a—but it offers, as well, a lot of opportunities. And in particular, our view is that the more you inject in the system an intermittent source of electricity you create imbalances. So if you have some assets to manage that, then you can make some—quite a good profits on it.

YERGIN: Right. So on—you talked about what you’re doing in terms of international oil and growing it. What are the geographies that are—where’s the excitement for you today?

POUYANNÉ: On oil, we are not in shale oil. Shale gas, yes, but gas in the U.S. we love, but oil, I leave that to my big competitors. We are too small there. No, in fact, for us, it has been, of course, Brazil. Brazil, where we have invested in the last ten years. Brazil is becoming our first country in terms of cash flow in ’25. So growing in deep water of Brazil with Petrobras, but we have been quite successful. It’s also Africa, of course, historically, Nigeria, Angola, and now we have Namibia. We have been successful in exploration in two countries—Suriname, where we launched a new project, Namibia, where we are working on a new one. So I would say we continue to—oil is the Atlantic basin, fundamentally deepwater, where we are going.

And the other part of the oil strategy is the Middle East—Middle East, North Africa, Libya, Abu Dhabi, Iraq, where we are investing in projects in oil and gas and solar project. It’s where we have—why Middle East? Because it’s very cheap. We produce oil at less than $5 per barrel, you know. So we like it. So that’s, I will say, our oil business, how do we develop it. And we have been successful to, again, replenish the reserves and to continue to produce.

YERGIN: So, in Iraq, is that an example of your integrated projects?

POUYANNÉ: Yeah. Yeah, but it’s an interesting story because we managed to convince—the first time I went to Iraq it was during the COVID, October 2020. I was not enough patient in my office. I went there. They spoke to me about gas and, in fact, electricity, because the problem of—and it’s typical of this type of producing countries. They are generating a lot of natural resources, but they have a lack of energy for their own population, a lack of electricity. And by the way, there was another debate, which was some electricity is coming from Iran, and which was a political—geopolitical issue.

YERGIN: That was an issue here.

POUYANNÉ: That was an issue here in Washington, but also there. And so they wanted us. And so I told them, gas. And the gas fields in Iraq are located in dangerous province. So I say, oh, I need to have—my security of my people is primary importance. But then we find another way to answer to their question, because—that’s why I spend a day in southern Iraq, in Basra, with the minister. And then I saw plenty of flares. You know, it’s incredible. You go there. When you go down out of the plane in Basra, you smell the oil, you smell—you have the impression you are in a—in a sort of—I said, why don’t—why don’t we try to stop flaring, capturing this gas, which could be a feedstock for your power plant? So let’s look at it. And tell me, OK, good idea. First project.

Then it’s a flat land, so I told him we could put plenty of solar there. So we have a one gigawatt solar farm. It came, it’s completely flat. And the land is owned by the Basra oil company. So it was no problem of—and then, of course, we need to finance all that. So we need an oil field, because at the end we do not make enough money with the stop flaring and the solar. But and that’s why we—so it was really the result of integrated approach, the fact that we are ready to speak about electricity, thinking about solar. We put together all that and we hoped—and we managed to sign a very good—a good contract, and today which is a model. And I see that one of my colleagues want to copy/paste what we’ve done, which is good. We need to invest in Iraq if we want to find the stability of this country.

So it’s a—so—

YERGIN: And that project—that project is up and running now?

POUYANNÉ: Yeah, yeah. The project—by end of ’25, the first phase of the solar plant will be delivered. The first phase of the stop flaring—the first—an early phase of stop flaring will be delivered. And also, the first phase of the old project. So we have phased it, but it’s moving on. It’s moving on, on the ground.

YERGIN: Well, we’re at halfway point. And I’d like to now open it up for discussion, both here in the room and, of course, anybody online. And when you—I see hands going up—when you stand up, please just identify yourself and short questions. And do we have mics somewhere? Right here. I think the first hand was right there.

Q: Thank you so very much for being with us. Itai Grinberg, Georgetown Law and former Biden Treasury.

So as a foreign investor into both renewables and non-renewables in the United States, and a big one, you have an interesting perspective on that marketplace. I would love to hear what you think the future of your investments into the renewable space is in the U.S., how the transferable credit market has affected those investments, and, given the legislative uncertainties, what you see as sort of the future of that when you talk about this combined supply for electrons, right, traditional and non-traditional? Do you keep building out that way if this stops, or not?

POUYANNÉ: No, we—again, the strategy of the company—we need to do—in energy, you need to keep consistency. You don’t—you can adapt sometimes the pace, but you need to keep consistency. So I will not abdicate on our model, I think, because it’s also meeting what the customers are looking for. So be careful. Then of course, to be honest, we have to listen. Offshore wind, no way to progress in the next four years. So I decided to stop the projects in New York, just because it makes no sense—zero sense to spend money. But the concession we have is for forty years. So we’ll come back this one. Then onshore solar. I think—I’m not sure there is a big debate. I know that Elon Musk, he loves solar and batteries. You know, he considers it the best energy. So I discussed with him.

I explained, by the way, yesterday to the U.S. administration, but in fact when you—the IRA somewhere was linked to the idea that you have the IRA’s—the fiscal support is more important if you are using U.S. solar panels. And in fact, what happens that the IRA was not taken by us, but was given back to the U.S. solar panels manufacturers, in fact, and you established it. So if they want, and this is the objective today to maintain this manufacturing activity, you need to find some support somewhere which will be transferred to them. That’s what happened. In fact, the IRA fundamentally was a support because you link it not only to solar development, but also to the origin of the panels, which was, by the way, quite smart in a certain way. We see what we should do in Europe if we want to have some European solar panels. You know, otherwise we are buying Chinese panels.

So there is—and, again, so I think—and what I observe as well is that these onshore renewables have been developed in many Republican states, you know. So there will be a very important reconciliatory act or law, I don’t know what we call it, a budgetary law in ’25. We need to observe—I think we have an uncertainty during six months, a year. We’ll see what we’ll get out. I’m quite optimistic that something will remain. And what I told—I remind—I reminded to be the new secretary of energy that, in fact, during Trump one there was some support which remained for solar—lower, but if there was some support.

So this is—there is an ideological debate, but then you have a pragmatic one. And I think—I’m confident that the governors and all these, I would say, states authorities are pragmatic somewhere, basically. So there is a debate about onshore wind in between. Maybe we’ll have to repo instead of installing—(inaudible). At the end what is clear, and it was interesting to look to the—I had the opportunity to ask a question to President Trump when I was in Davos. And if you look to what his answer is, he said we need more electricity from any source, any source of type. So we are fundamentally driven, but we need more electricity today for datacenters and this AI war. So I’m reasonably optimistic. And we’ll continue. So we have projects. We continue to work on them.

YERGIN: I see many hands. The lady there in brown.

Q: Great. Thanks, Dan. Alisa Newman Hood. I’m general counsel of Excelerate Energy.

We have owned and operated LNG regasification capacity worldwide for about the past twenty years, headquartered in the great state, or perhaps I should say, great nation of Texas. (Laughter.) You spoke in your remarks to the impact of tariffs and the potential trade war on LNG purchases in Europe. But I was wondering if you could expand that to speak to the impact of that on the international LNG trade, particularly in Asia.

YERGIN: Tariffs.

POUYANNÉ: (Laughs.) I don’t know. I mean, honestly, I’m—by the way, I think, you know putting tariff on LNG to China, at the end the Chinese will find LNG elsewhere. So now you can recirculate the—that’s why the reaction. The Chinese have put 10 percent, but they know it has no real impact because instead of buying U.S. LNG they will buy Australian LNG. And in fact, it’s a company like TotalEnergies. We have a portfolio of 40 million tons. We’ll have to arbitrate according to the tariff, you know, and we’ll optimize it for customers. So, I mean, I’m not sure. And I don’t see as the U.S., who want to have an idea of energy dominance, to use the energy—to establish an energy dominance is of the sort—if you begin to use tariffs to do it, it might be contradictory. You know, and including the tariff from the Canadian oil sands.

As a European refiner, I’m fine. No problem. I’m happy, to be honest. And we’ve seen, by the way, the European margins going up because of this threat of tariff, because it will be damaging the U.S. refiners, but not really the European one. So, I mean, on energy this tariff might have some strange consequences. So as I think at the end of the day, beyond, I would say, the global rhetorical objective, you have businessmen. They are all businessmen, the guys is in charge of the White House today. So then pragmatism will come back on this energy part. So you cannot have a will to use energy to dominate and, at the same time, to create plenty of imbalances. So let’s see. I’m not so—I’m not so afraid. And, by the way, for a large company, like TotalEnergies, again, generally, this type of dislocations are more opportunities than risks. We can use our portfolio to try to manage that, so.

YERGIN: I think there’s one question online.

OPERATOR: We will take the next question from Kimberly Reed.

Q: Hey. Kim Reed of the Export-Import Bank under President Trump during his first term, and just actually a transition team for Ex-Im.

So thank you for all you’re doing to support U.S. exports. But I guess, you know, actually, many of us, including myself, are on corporate boards. And just with all the changes that we’re seeing, your thoughts on how boardroom discussions and governance are going for companies like yours.

POUYANNÉ: The governance of boards, if I understand, was a question about?

YERGIN: If I understand.

POUYANNÉ: I’m not sure.

Q: Yes.

POUYANNÉ: I’m not sure to see what is the link—I mean what you are—what is a specific question of board governance.

Q: So with all the changes we’re seeing in the United States right now on reporting of environmental standards, of ESG, of DEI, we’re going to see a lot of changes. There’s going to be some changes on public company board and boardrooms. And just, from a CEO perspective, what are—what are you all thinking about and talking about right now?

YERGIN: Well, you’re a French company.

POUYANNÉ: Yeah. I’m a French company. But I have a board, yeah? (Laughter.)

YERGIN: Notwithstanding.

POUYANNÉ: I have a board. And, by the way, I’m chairman of the board and CEO, like most of my peers in the oil and gas—at least the U.S. oil and gas, not the European oil and gas. I would say, you know, a good—it’s a sum of people which have different points of view which are, I would say, mirrors, which help us to think, which are discussing strategy. I don’t see—I mean, honestly, it’s stable board. That is good. It’s not a question of fashion. So we resisted to have—I don’t like a board which represents each group of minorities. So the way we build the board, you know, we build a board with experienced people.

Our board is 50 percent French, 50 percent international. We have been a big evolution, some representative from North America, by the way. And I think it’s more a question of balance of experiences that we are looking for. But I’m against the idea that you need to have a specialized guard with a representative of, I don’t know, customers, specialized for AI, specialized for ESG. Does not work like that. At the end all—each board members will have its own experience, is bringing it to the governance of the company. So that’s the way you establish a board.

YERGIN: Right. Question, the gentleman in the red tie, at that table. Right there. Yeah.

Q: Yes. Good afternoon. My name is Bob Bestani, Georgetown University.

And I wanted to ask you about all the oil and gas finds in the Eastern Mediterranean, and how you see those developing. Is there potential for France from that quarter?

POUYANNÉ: We just made an agreement in Cyprus to try to develop the Cyprus gas through Egypt, and to bring the gas to Europe because, in fact, you have we have energy—some energy plants which are empty today. So we can bring some gas. And this gas is perfectly located to Europe. You know, it’s just next—across the Mediterranean Sea. So, of course, Egypt is—as it all need for gas. So it’s a domestic gas, again, LNG. But we just established that intergovernmental agreement with our friends of Eni which are leading the project. So it’s a good path. I think that—(inaudible)—is looking to that.

And of course, for us, historically it’s also the link with Algeria, where we continue to provide gas from Algeria to Europe. And we have Libya, where we have—which is a very important country, where you have plenty of oil. Some difficulties. So for us, yes, developing with Mediterranean business. For Europe it’s important—the security of supply of Europe—my permanent speech to European leaders, you need to diversify your sources because we are importing. We are like Japan now. You know, we have still the North Sea, but even with Norway, which is not in the EU, and U.K. as well is not, but it’s decreasing.

So if we want to ensure security of supply, we need to diversify different sources. Not to be over-reliant as well of the U.S., you know, with U.S. energy. But it’s the only answer to that. And to put competition between the different sources of energy. And it’s quite obvious that energy from Egypt, because it’s just a few hundred kilometers, will be cheaper than energy from the U.S. So it’s—but we need to diversify.

YERGIN: So there’s a lady way in the back. Yeah.

Q: Thank you. Hi. I’m Lesley Warner, formerly of USAID, more recently doing geopolitical risk consulting.

My question is, just given the decision of the United States to kind of take itself out of the foreign assistance game, I’m wondering from your vantage point as a CEO of a major energy company, how are you understanding the next two to three years of your business model in terms of—you know, how does the U.S. taking itself out of the foreign assistance game affect your ability to operate in some of the countries that you mentioned? For example, you mentioned Nigeria, Angola. I know you have investments in Mozambique. So just generally curious as to, you know, does this have any impact on your bottom line? Or how are you adapting to this, if there’s any impact whatsoever?

POUYANNÉ: No. It does not have an impact on our bottom line, for sure. It might have an impact on the stability of some of these countries where the USAID was quite an important part of their budget. It depends on different countries. Does it have an impact—direct impact on us? No. It’s not true. I mean, as it were, knowing that in many of these countries we have our own actions, societal actions. You know, for example, with Mozambique we have established quite a large foundation to be able to—in fact, we do more than the state of Mozambique is able to do itself. You know, for Mozambique, you know, for the population, because the security for us is going to, in fact, the—I would say we need to share the wealth with the local population to ensure our own security fundamentally. So of course, the programs of USAID has some impacts locally, but they are never related directly to our operation. So I cannot make the link.

YERGIN: Patrick, what does your foundation do in Mozambique?

POUYANNÉ: Oh, a lot of things. We are creating a lot of jobs, giving jobs, very simple ones, through agriculture, and farmers, coconuts, oil, and trying to diversify. It’s not a lot. It’s quite—we give—we have given $50 million per year to establish. And in fact, the fundamental idea is, OK, this region was devastated by a sort—by the war. So we need to attract people and to give them jobs to be able to have themselves, to be—to see somewhere a positive influence, even before we produce, of the fact that there will be a project. And so it’s part of what we do.

And I think, again, if they feel—we are convinced that the population, if they feel themselves having some positive, I would say, outcomes, then they feel themselves more secure, and they will be more advocate for the installation, et cetera. So trying to create a virtuous circle, knowing that, in fact, be clear, the Islamist move in the north of Mozambique, we are taking part of, I would say, advocacy with a very poor population. So if you can help this population in a large way, we need to do it. And again, with plenty of small action, creating very small businesses, you can create some sort of prosperity, you know? And that’s very important to engage on that.

YERGIN: All right. The lady right here. Wait, wait, wait, there’s a mic coming.

Q: Briefly, I’m with Bloomberg.

I was hoping if you could give us an update on the pending loan agreement with U.S. Ex-Im regarding Mozambique. And then also in regards to the U.S. sanctions against Russia, particularly for LNG, if you have any views in terms of—in light of the current discussions.

POUYANNÉ: OK, you know, U.S. Ex-Im, it’s U.S. Ex-Im. It’s an independent agency. I remind you that this support was approved by the Trump one administration. I have the impression that the U.S. administration wants to promote the role of gas throughout the world. So we are discussing. And we are waiting to have a—because the U.S. Ex-Im today, I would say, it’s not fully functional, because we are in transition. But as I said recently, I’m positive—the signals we received from the Trump administrations are positive about this project. Which, by the way, is just to honor the word of a contract which was signed, to be clear.

YERGIN: All right. Robin West. Wait, a mic is coming to you.

POUYANNÉ: No need for you to stand up if you need take the microphone.

Q: I’m Robin West, with Boston Consulting Group.

One issue that you have spoken about for a long time is methane. And your position is somewhat different than the U.S. industry has been historically. In fact, you withdrew from the American Petroleum Institute because you felt the American industry wasn’t aggressive enough on this. Do you still feel this is an important issue and is this something that the industry has got to address?

POUYANNÉ: Yeah, it’s a major issue. It’s a major issue because when you want to promote gas and LNG, you need to tackle with the methane emissions. We discovered with the Glasgow conference that it was really a strong emitter. And in fact, in our upstream activities it’s quite easy to stop—to go near zero methane emissions. By the way, I’m not alone. You know, today the largest U.S. companies and friends of Exxon publicly said—in fact, we have raised the bar, you know, for ourselves. And so our interest today is to have a level playing field where the industry is taking care of methane. And it’s really an easy way to contribute positively to the climate change. We—in Total we have managed to reduce—it was 50 percent between 2010 in 2020. I said, it will be minus 80 percent between 2020, and 2030. So 90 percent in twenty years. We have already done 50—more than 50 percent in the first five years, because it’s just a matter to think about it, stop venting, stop flaring.

There is no huge investment. The old facilities are a little more complex, but we can do it. So that’s why, by the way, I’ve taken the lead with, I mean—(inaudible)—from Morocco and Sultan Al Jaber for—(inaudible)—of the famous OGDC, which was created in Dubai. And methane is the top of the agenda. We can tackle it. And I know that some—that’s why in the API I was not comfortable because I had the impression it was dominated by the smaller independents, you know. And I think it’s not the level playing field we must establish since, by the way, I’ve seen, again, my—here there is a consolidation, by the way, in the U.S. shale, which is good. I’ve seen my main partners raising the bar right there. So I think, again, for me, and honestly, this is a topic where we in this industry, we can answer to the people we said gas is detrimental. No, we can manage it. Not only upstream, we can manage it also during the transportation phase. So let’s do it. That’s all.

So I said that publicly when the new administration came. I think you can deregulate, but sometimes deregulating is not helping you. You know, and it’s—and, again, this will come—this is part of, I would say, the normal way the permit to—the license to operate. Our license to operate is going today for the oil and gas industry without impacting the cost of our products. It’s not true, neither my profits, to be honest. I didn’t invest billions to do that. It’s just a matter—in fact, we discovered that if we say to engineers, you need to take care of these emissions, they find easily plenty of ideas which are not costly. So it’s just a matter to use the right KPI and then to implement it.

We went further within TotalEnergies. I decided, you know, today there is a revolution in all these—linked to the digital world and sensors, miniaturization. So we decided in last year that by end of ’25, all our assets will be covered by permanent networks of methane detectors. We installed 13,000 sensors. It’s not big cost. I think it costs us $40 million for the assets worldwide. But it’s a way—and the idea, again, is to say, OK, when you have an oil leak, you react immediately. When you will have a methane leak, you can react immediately. So it’s just a matter of culture. And we can do that.

And, by the way, all colleagues—my employees, my engineers, my technicians—they love it, because, in fact, when we move also—we have to understand from Total to TotalEnergies—it’s not just strategy. It’s not because of ESG. It’s not because of that. It’s because we have employees. And most of my employees, they approve to that. They want to be part—they are citizens as well. And today, the level of motivation in our internal surveys has never been so high. So it’s also very important to find a way in a company to keep our teams motivated, not to be afraid to become stranded in 2035, and so they contribute to these—also the environment.

So I think it’s not black and white, as could be described. It’s true that the transition will take long. I’m convinced that oil and gas will remain part of the mix for long. But there are also other ways to produce oil and gas. And in fact, I think it’s the first duty of all the oil and gas companies. So I will continue to advocate for that. And that’s it. And we’ll implement that.

YERGIN: So—oh, no question. I think there is a question. Josette.

Q: Hi, Dan. Thank you. Josette Sheeran, CEO of Firefly, former chief energy negotiator for the U.S. under Condi Rice, and Texan.

As you know, Texas loves our oil companies. And if we’re asked between national security and energy independence versus sustainability, even though they’re very innovative, that debate is kind of over there. I’m interested in how you see the balance that you’re striking now on this issue, when you said that, you know, never again depend on Russia. And also to bring into a current debate it is true the U.K. and Norway are not in the EU, but Denmark and Greenland are. And Greenland is up in those seas and has vast resources. Why do you think it’s been ignored?

POUYANNÉ: Well, we are far from my knowledge. I mean, I visited to Greenland as a tourist. It’s a beautiful country. But I have little understanding about the Greenland situation, to be honest. I think, again, OK, but your question is quite complex, going in different directions. There are many questions, and some questions.

YERGIN: There are about four questions—

POUYANNÉ: No, they are related. No, but again, fundamentally, there’s a debate around energy. That is true. For me, I mean, I spent twenty-five years. There is one word which is dominating all these free world, is, first, affordability. Affordability. It’s just fundamental to be able to deliver the affordable energy. Of course, it has to be reliable. Security of supply came back. It was obvious. We discovered the war, but it was maybe less—more complex. Some people do not have access to energy. So we know that is fundamental. And then you have the sustainability debate. But what I’m convinced is that we will not progress on the sustainability if we cannot, at the same time, ensure the affordability. And that’s one of the complexity, you know, because in the transition phase we must maintain the existing system, oil and gas, which you today, and at the same time build a new one. And so, of course, it’s another cost.

By the way, we know that as renewables are intermittent we need to have the backup of the existing one. So that’s the difficulty. And what I—what we face today in many countries, in the U.S. but in Europe, we cannot imagine the price of electricity is becoming one of the major topic of the political debate. And so—and we have to be—we have to be careful not to become an argument for the anti-sustainable guys or the most conservative, I would say, parties, who are using it against, I would say, the sustainability. But it’s a reality. Election after election. So we are democracy. You know, we cannot be considered that the elite is right, whatever the people think. But a democracy, we have to listen as well to the people. And so it’s true in the U.S. It’s true in Europe.

So finding this right balance is a huge—I mean, it’s really why, by the way, our job is incredibly—we have to be committed, because this is permanently what we have to do. So I’m far from your answer on Denmark and Greenland because I think I’m not personally there.

YERGIN: We’ll leave that for next time.

POUYANNÉ: OK. No. (Laughter.) I’m not invested—in to be clear, I’ve decided not to invest in oil and gas in Greenland when I became CEO. There was plenty of ideas. I say, OK, it’s too difficult. It’s too dangerous. I don’t want to have a Macondo in Greenland, you know? So I prefer to invest in safer areas, or safer countries, from the environmental point of view, or ecological point of view.

YERGIN: Kevin. We’ll try and get all the questions in, but it’ll be challenging.

Q: Thank you. Thank you, Dan. And thank you, Patrick. Kevin Book from ClearView Energy Partners.

You talked about the deregulatory bent here in the United States and the competitiveness trend in Europe. I guess the question I would ask is, there’s two schools of thought you’re hearing a lot, probably. This is a cyclical downturn in a march towards greenhouse gas emissions reductions, a slowdown maybe, or structural change. Maybe we’re headed to a different regime, maybe one where geoengineering or other mitigation benefits take place. Do you think this is a cyclical change, we’re just seeing a change in the appetites of government and publics? Or are we seeing a structural change, where the actual direction is changing? Thank you.

POUYANNÉ: I don’t think—you know, you don’t—structural in four years is difficult. You will have some pause, but I think you are—the there is an issue to solve. You cannot—maybe we need to go—I’m convinced, not maybe—to be more pragmatic on the way we tackle the issue. More pragmatic, that means that for me—and this is a debate in Europe—we don’t need today to give—to put into action or to invest in the ultimate solutions. I will take you an example. My team industry—shipping industry. People are speaking about methanol, e-methanol, ammonia. There is another way to diminish the emissions from the shipping industry during the next ten, fifteen years. It’s just LNG is available.

What should—if we want to be pragmatic, do we immediately go to the end solution, which is expensive? Because nobody in the shipping industry is ready to pay for e-methanol. Nobody. So it’s—but we could immediately abate by 20-25 percent the shipping industry emission by just using LNG gas on board. This is a pragmatic solution. So let’s do the transition in the right way. And I don’t want to invest my capital in expensive solutions. I prefer—it is the same for the sustainable aviation fuel. E-fuels is very expensive. I don’t need to put to invest in an e-fuel plant in 2025. Today I can produce stuff from used cooking oil, from animal fats, which is less expensive, which your customers can use.

What I need is mandate, because I can tell you on the soft story look to what happens in the U.S. It’s very impressive. I was discussing last week with the CEO of Signature Airports. There is no mandate in the U.S. So the voluntary idea that people are ready to spend more money with stuff in their jets is completely wrong. He told me there is another supply today. I don’t find the customers, except in California, where there is a mandate. So that’s—but, again, people want us to invest in e-fuels, but e-fuels is for 2040.

So we need to rank the solutions. And the problem that I see that we don’t progress enough quickly, because if we are stuck by having the ideal solution we don’t do what is available, because gas is a fossil that we cannot use energy for shipping. But again, we can abate the emission by 20-25 percent. So let’s do it. That, I think, is pragmatism. If we go back to pragmatism, then I think we can combine the progress in lower emissions and keeping the affordability of energy. And this is the only way to make it to progress clearly.

YERGIN: Right here. The lady right here.

Q: Merci beaucoup. Hi. Simone Williams, nuclear security and nonproliferation researcher.

My question for you is now transitioning to a different energy source, nuclear. It’s a reliable, very powerful energy source. I’m curious how you and your company think through translating that, and translating why it is a good source of energy to be used, knowing that nuclear also has a bad reputation. A lot of communities are fearful of it.

POUYANNÉ: No, I believe nuclear is part of the solution in the transition. That’s clear. It’s obvious. It’s a decarbonized energy. It has other issues with the nuclear waste. But we—in TotalEnergies, we know nothing about nuclear. And so I’ve decided that we don’t invest in nuclear because, again, it’s a real different technology. It’s very capital intensive. And I have another view, which is to combine the balance sheet of a publicly listed company with the liabilities of waste nuclear fuels is quite a challenge for the long term. And so that’s—but, again, I understand the efforts which are down. Maybe fusion—one day we could look to fusion, because you don’t have all this waste, you know? But it’s there are some progress.

But, again, I understand that some countries—of course, France, is doing it, but over—are looking to nuclear as part of the mix. But we cannot think that—and I’m more doubtful about the SMR story, because I’m not yet understanding what it—what is the real advantage of SMR. What I learned in energy is that size matters in terms of cost for customers. So I don’t understand—so why smaller would be more efficient? And I think the security of nuclear, the people around the SMR, will ask the same request for a small reactor for a larger one. So but, again, we are not experts. We decided that it’s too much an investment in terms of technology and know-how that we will not invest in it.

YERGIN: But, Patrick, you do use nuclear energy at home?

POUYANNÉ: Yeah, yeah. We use. Yeah, yeah.

YERGIN: OK. (Laughter.) Just to make that clear.

POUYANNÉ: No, no, no. Not only—no, no, not only I’m using, but I said to the French government—but they want us—we are an electricity supplier. I’m ready to make a big PPA with my friends over at Électricité de France to find they could—like we do, by the way—we are taking U.S. energy. I could have take nuclear power, being an off-taker, and they could finance their new nuclear somewhere, thanks to our balance sheet, like, next decade, and doing that, and we are ready. So I have no problem to buy, but to—but to invest or to produce, no, we know nothing about it.

YERGIN: So, Patrick, this has been a very insightful and wide-ranging conversation. And please, everybody, join me in thanking Patrick Pouyanné. (Applause.)

POUYANNÉ: And just—I just want you to remember, at the end, that TotalEnergies has chosen America.

YERGIN: Right, exactly. Welcome. (Laughs.) Thank you.

(END)

This is an uncorrected transcript.