Saudi Aramco CEO says energy transition is failing, world should abandon ‘fantasy’ of phasing out oil

HOUSTON
—
Saudi
Aramco
CEO
Amin
Nasser
said
Monday
that
the
energy
transition
is
failing
and
policymakers
should
abandon
the
“fantasy”
of
phasing
out
oil
and
gas,
as
demand
for
fossil
fuels
is
expected
to
continue
to
grow
in
the
coming
years.

“In
the
real
world,
the
current
transition
strategy
is
visibly
failing
on
most
fronts
as
it
collides
with
five
hard
realities,”
Nasser
said
during
a
panel
interview
at
the
CERAWeek
by
S&P
Global
energy
conference
in
Houston,
Texas.

“A
transition
strategy
reset
is
urgently
needed
and
my
proposal
is
this:
We
should
abandon
the
fantasy
of
phasing
out
oil
and
gas
and
instead
invest
in
them
adequately
reflecting
realistic
demand
assumptions,”
the
CEO
said
to
applause
from
the
audience.

The
Paris-based
International
Energy
Agency

forecast
last
year
that
peak
oil,
gas
and
coal
demand
would
come
in
2030.
Nasser
said
demand
is
unlikely
to
peak
anytime
soon,
let
alone
by
that
year.
Nasser
suggested
that
the
IEA
is
focusing
on
demand
in
the
U.S.
and
Europe
and
needs
to
focus
on
the
developing
world
as
well.

Nasser
said
alternative
energy
sources
have
been
unable
to
displace
hydrocarbons
at
scale,
despite
the
world
investing
more
than
$9.5
trillion
over
the
past
two
decades.
Wind
and
solar
currently
supply
less
than
4%
of
the
world’s
energy,
while
total
electric
vehicle
penetration
is
less
than
3%,
he
said.

Meanwhile,
the
share
of
hydrocarbons
in
the
global
energy
mix
has
barely
fallen
in
the
21st
century
from
83%
to
80%,
Nasser
said.
Global
demand
has
increased
by
100
million
barrels
of
oil
equivalent
per
day
during
the
same
period
and
will
reach
an
all-time
high
this
year,
the
CEO
said.

Gas
has
grown
70%
since
the
start
of
the
century,
Nasser
said.
The
transition
from
coal
to
gas
is
responsible
for
two-thirds
of
the
reductions
in
carbon
emissions
in
the
U.S.,
he
said.

“This
is
hardly
the
future
picture
some
have
been
painting,”
Nasser
said.
“Even
they
are
starting
to
acknowledge
the
importance
of
oil
and
gas
security.”

Developing
nations
in
the
global
south,
meanwhile,
will
drive
oil
and
gas
demand
as
prosperity
rises
in
those
nations,
which
represent
more
than
85%
of
the
world’s
population,
the
CEO
said.
These
nations
receive
less
than
5%
of
the
investment
targeting
renewable
energy,
he
said.

Nasser
said
the
world
should
focus
more
on
reducing
emissions
from
oil
and
gas
in
addition
to
renewables.
The
CEO
said
efficiency
improvements
alone
over
the
past
15
years
have
reduced
global
energy
demand
by
almost
90
million
barrels
per
day
oil
equivalent.
Wind
and
solar,
meanwhile,
have
substituted
only
15
million
barrels
over
the
same
period,
he
said.

“We
should
phase
in
new
energy
sources
and
technologies
when
they
are
genuinely
ready,
economically
competitive
and
with
the
right
infrastructure,”
Nasser
said.