Saudi Aramco’s CEO, Amin Nasser, cautioned against the current approach to the energy transition, asserting that the endeavor is failing and policymakers should reconsider their strategies.
Speaking at the CERAWeek by S&P Global energy conference in Houston, Texas, Nasser emphasized the need to abandon the idea of swiftly phasing out oil and gas, given the anticipated growth in fossil fuel demand.
“In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities,” Nasser said.
“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.
Contrary to the International Energy Agency’s prediction of peak oil, gas, and coal demand by 2030, Nasser argued that such a peak is unlikely in the foreseeable future. He urged for a broader perspective, emphasizing the importance of considering developing nations alongside the U.S. and Europe.
Despite significant investments exceeding $9.5 trillion in alternative energy sources over the past two decades, Nasser noted their limited impact.
Wind and solar energy currently contribute less than 4% to the global energy supply, with electric vehicle adoption below 3%. Meanwhile, hydrocarbons maintain a substantial share of the energy mix, with global demand on the rise.
Nasser highlighted the pivotal role of gas in emissions reduction, particularly through the transition from coal to gas, which accounted for significant carbon emission reductions in the U.S.
“This is hardly the future picture some have been painting. Even they are starting to acknowledge the importance of oil and gas security,” he said.
He emphasized the growing demand for oil and gas from developing nations in the global south, underscoring their economic prosperity and minimal investment in renewable energy.
In advocating for a pragmatic approach, Nasser stressed the importance of focusing on emissions reduction from oil and gas, alongside renewable energy initiatives.
He emphasized the significant energy demand reduction achieved through efficiency improvements, contrasting it with the relatively modest contribution from wind and solar energy.
“We should phase in new energy sources and technologies when they are genuinely ready, economically competitive and with the right infrastructure,” Nasser said.
