Global energy transition ‘visibly failing’ – Aramco CEO

SINGAPORE (ICIS)–The global energy transition is failing and the “fantasy” of phasing out oil and gas should be abandoned as demand for fossil fuels will continue growing, Aramco President and CEO Amin Nasser said on 18 March.

“In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities,” Nasser said at the CERAWeek 2024 energy conference in the US.

These include the need to reset global efforts to meet climate ambitions, the limited scalability of alternatives, the high costs of green energy alternatives, the needs of developing nations and the potential to further reduce emissions from traditional hydrocarbons, Nasser said.

“We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately, reflecting realistic demand assumptions,” said the CEO of the Saudi Arabia-headquartered energy and chemical company.

“We should ramp up our efforts to reduce carbon emissions, aggressively improve efficiency and introduce lower carbon solutions,” Nasser added.

New energy sources and technologies should enter the market only when commercially viable, cost-competitive and supported by adequate infrastructure, Nasser said.

Despite ongoing energy transition efforts, hydrocarbons still dominate the global energy mix, with their share declining only marginally from 83% to 80% in the 21st century, Nasser noted.

Peak oil and gas demand is also “unlikely for some time to come”, with crude demand expected to reach an all-time high in the second half of this year, he said.

The International Energy Agency (IEA) said in an October 2023 report that global demand for oil, coal and natural gas is set to peak by 2030.

Likewise, gas remains a mainstay of global energy, growing by about almost 70% since the start of the 21st century, Nasser noted.

“Despite the world investing more than $9.5tr on energy transition over the past two decades, alternatives have been unable to displace hydrocarbons at scale.”

The current energy transition is neglecting the needs of consumers who rely on affordable and dependable energy sources, Nasser said.

“Unfortunately, the current transition strategy overlooks these broader messages from consumers. It focuses almost exclusively on replacing hydrocarbons with alternatives, more on sources than on reducing emissions.”

Focus article by Nurluqman Suratman