‘We should abandon the fantasy of phasing out oil and gas’: Saudi oil CEO

March 18, 2024 Canuck

The head of the world’s largest energy company on Monday urged the world to accept the “hard realities” that oil and natural gas will be around for a long time to come and consumption of both sources of energy are likely to grow for at least the next decade or two.

In a speech at a Houston energy conference, Saudi Aramco CEO Amin Nasser described the ambitious timetables of environmental groups as failing because the world continues to consume record amounts of fossil fuels every year.

“We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately reflecting realistic demand assumptions,” he said.

Oil consumption will reach a new record of 104 million barrels per day this year, Nasser said, and could keep growing through 2045.

“All this strengthens the view that peak oil and gas is unlikely for some time to come, let alone 2030,” he said. “No one is betting the farm on that.”

Nasser’s comments come just a few months after countries around the world, including Saudi Arabia, reached a new climate agreement, which specifically calls for the “transitioning away from fossil fuels in energy systems” to achieve net zero emissions by 2050.”

After the agreement was passed in December during the UN climate conference, the president of the two-week summit in Dubai, Sultan al-Jaber, said the new deal would “set the world in the right direction.”

The agreement was considered groundbreaking as it marked the first time that countries agreed to explicitly address fossil fuels and the need to move away from oil, natural gas and coal in order to limit global warming.

The most recent World Energy Outlook report from the International Energy Agency (IEA) predicts that way the world is powered will change dramatically by the end of the decade, thanks to surging demand for electric vehicles and clean energy technologies.

The report also included a stark warning: much stronger policies are needed to limit fossil fuel emissions to keep warming to 1.5 C by the end of the century.

In Houston on Monday at the CERAWeek by S&P Global energy conference, some other CEOs of oil companies also cautioned how it will take time for the world to shift to low-carbon sources of energy, such as hydrogen.

“We’re not on the path to make net-zero by 2050 currently and one of the challenges here is that while society wants to see emissions reduced, nobody wants to pay for it,” said Darren Woods, chief executive of ExxonMobil.

The International Energy Agency continues to forecast global oil demand to grow this year, although last week updated its outlook to project a slight supply deficit. The report boosted oil prices above $80 USD per barrel.

“The exciting truth is that we already have cheaper alternatives for oil and gas in transportation, home heating and cooling and electricity generation, and are inventing new ways to replace it for other uses,” said Keith Stewart, senior energy strategist at Greenpeace Canada, in an email.

“The only questions are if we will make the transition off fossil fuels fast enough to avoid the worst impacts of climate change and how we can support workers and communities in oil-producing regions through the transition.”