The biggest contribution Royal Dutch Shell plc can make to reducing global emissions in the near term is to grow the role of natural gas, the CEO said Thursday.

“True, the world needs more energy,” but it has to be produced by emitting fewer carbon dioxide (CO2) emissions, said CEO Ben van Beurden, who keynoted the morning activities at CERAWeek by IHS Markit. “This is, of course, a key driver behind the energy transition.”

How the transition unfolds remains a question, which van Beurden admitted he could not answer. “But I am pretty confident that this century’s energy system will be an evolving mix of renewables and hydrocarbons.”

Shell’s biggest contribution globally will be to grow the role of gas, which now makes up about half of total company reserves. In a report reviewing the outlook for liquefied natural gas, which was issued last month, Shell predicted strong supply growth for the rest of the decade and “a very positive outlook for demand, driven by a strong outlook for gas demand growth, driven by gross domestic product growth, favorable policy and gas’ role in decarbonization and being part of the solution.”

“As the U.S. has demonstrated, using gas in the power sector is a fast and relatively cheap way to reduce CO2 emissions in the short term,” the CEO said. Adding gas reserves was one of the main reasons Shell acquired BG plc, and today integrated gas is one of the company’s driving metrics.

“But of course Shell is also taking other actions to help lower emissions,” said van Beurden. The actions range from research and development to reducing emissions from operations and sharing knowledge with others.

Electricity is only about 20% of today’s final energy consumption, “and contrary to some beliefs, a quick and affordable way to grow the share of electricity in certain sectors is yet to be found. To make essentials like iron, steel and cement, for example, you still need hydrocarbons that can produce extremely high temperatures.

“In other words, cleaner electricity alone is not enough to meet the challenge of producing more energy with less CO2. And this, like it or not, leaves us with an evolving mix of renewables and hydrocarbons.”

An energy system based on renewables and hydrocarbons implies that some level of emissions will remain for the duration. He pointed to the United Nations climate accord signed in Paris in late 2015 by more than 200 nations, which “acknowledges that emissions will continue in different sectors at different levels. These emissions will need to be offset elsewhere in the energy system.”

Emissions will not fall simultaneously in all sectors, nor will all sectors reduce emissions. “What’s important is that overall emissions fall. Rather than focusing on individual parts of the system, an overarching approach is needed. Shell strongly supports this as it strongly supports the overall ambition of the Paris agreement.”

The next step should be for governments to put in place policies that drive action for both supply and demand, he said, making a pitch for a carbon pricing mechanism, which is supported by Big Oil and many large independents.

“And they should include regulations that speed up investment in low-carbon technologies and — at the same time — move consumer demand away from high-carbon energy,” van Beurden said.

In the “immediate future,” the company plans to do four things: expand its low carbon energy offerings, reduce carbon intensity, help others to decarbonize and “explore the opportunity to offset emissions from our own operations and those of customers.”

Shell recently established a “New Energies” business that may see up to $1 billion of investments by the end of the decade.

“In our remuneration policy, we’re including new metrics for the management of greenhouse gases. And we’re willing to continue to invest in commercially viable carbon capture and storage projects linked to our operations,” he added.

The industry is facing uncertainties about how government policy and consumer behavior may shape the energy system, as well as which technologies and business models may prevail. The energy transition is likely to play out in a different way in different places. However, despite the uncertainty, Shell plans to work in step with global efforts to create a sustainable energy future.

“To be clear: Shell is already involved in new energies, like our wind parks here in the U.S. But I expect new energies to grow as part of our portfolio over time,” said the CEO.

Shell had established eight strategic themes around conventional oil and gas, integrated gas, oil products, deepwater, chemicals, shales, new energies and oilsands. That is, until Thursday, when Shell announced it was selling most of its Canadian undeveloped in-situ and oilsands portfolio. Shell now owns a 60% stake in the Athabasca Oil Sands Project (AOSP), with Marathon Oil Corp. holding a 20% stake and Canadian Natural Resources Ltd. with a 10% stake.

On Thursday the companies announced that Marathon would sell Shell and Canadian Natural equal shares of AOSP. Shell will keep a 10% stake but has sold its current 60% to Canadian Natural. Shell also is selling Canadian Natural nearly all of its undeveloped in-situ and oilsands holdings for $8.5 billion (C$11.1 billion). The move follows a writedown announced last month by ExxonMobil Corp. of its entire 3.5 billion bbl of proved undeveloped reserves at the Kearl oilsands development in Western Canada.

Included in the sale is Shell’s 100% interest in the Peace River Complex in-situ assets, including Carmon Creek, and several undeveloped oilsands leases in Alberta. Shell would continue as operator of the Scotford upgrader and the related Quest carbon capture and storage project.

The deal would pay Shell $5.4 billion in cash and give it about 98 million shares of Canadian Natural currently valued at $3.1 billion. Including the Marathon purchase for $2.5 billion (equally split), the transactions once completed would hand Shell $7.25 billion. The transactions with Canadian Natural are expected to close by mid-year.

The transactions “contribute to reshaping Shell and setting portfolio priorities,” van Beurden told the CERAWeek audience. “It also demonstrates, following the successful consolidation of BG into Shell, how we continue to drive a world class investment case. Shell makes these choices to thrive in the business environment of today and to be ready for the business environment of tomorrow…Or, to put it differently, our approach is: ‘Deliver today, prepare for tomorrow.’”