In a bold statement, Saudi Aramco CEO Amin Nasser criticized the current trajectory of the energy transition, urging policymakers to abandon the idealistic notion of phasing out oil and gas. Nasser’s remarks were delivered during a panel discussion at the CERAWeek by S&P Global energy conference in Houston, Texas.
Addressing the audience, Nasser highlighted what he perceives as the failure of the current transition strategy, asserting that it clashes with five harsh realities. He emphasized the urgent need for a reset in transition strategy, proposing a shift towards investing in oil and gas, aligned with realistic demand projections.
Referring to forecasts from the International Energy Agency (IEA), Nasser contested the notion of peak oil, gas, and coal demand by 2030, suggesting that demand is unlikely to peak in the foreseeable future, especially considering the growing needs of the developing world. He criticized the IEA’s focus on demand in the US and Europe, urging a broader perspective encompassing the developing nations.
Nasser underscored the limitations of alternative energy sources in displacing hydrocarbons at scale, despite significant global investment. He highlighted that wind and solar energy currently contribute less than 4% to the world’s energy supply, with electric vehicles accounting for less than 3% of total penetration.
Contrary to expectations, Nasser pointed out that the share of hydrocarbons in the global energy mix has only marginally decreased from 83% to 80% in the 21st century. He noted a significant increase in global energy demand, with an all-time high expected this year, emphasizing the vital role of gas in reducing carbon emissions through the transition from coal.
Highlighting the future trajectory of oil and gas demand, Nasser emphasized the pivotal role of developing nations in driving consumption growth. He expressed concern over the disproportionate investment in renewable energy in these regions, calling for a more balanced approach.
Nasser advocated for a comprehensive strategy that focuses not only on renewable energy but also on reducing emissions from oil and gas. He highlighted the significant impact of efficiency improvements in curbing global energy demand, suggesting a phased approach towards integrating new energy sources and technologies.
The CEO’s remarks underscored a call for a pragmatic approach to the energy transition, emphasizing the importance of acknowledging the enduring significance of oil and gas in the global energy landscape.