Saudi Aramco CEO says energy transition is failing, gives up ‘fantasy’ of phasing out oil

HOUSTON – Saudi Aramco Chief Executive Amin Nasser said Monday that the energy transition is failing and that 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 many fronts as it collides with five harsh realities,” Nasser said during an interview at the CERAWeek energy conference in Houston, Texas.

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

The Paris-based International Energy Agency predicted last year that peak demand for oil, gas and coal would come in 2030. Nasser said demand was unlikely to peak anytime soon much less within that year. Nasser suggested that the IEA is focusing on demand in the United States and Europe and must also focus on the developing world.

Nasser said alternative energy sources have not been able to replace hydrocarbons on a large scale, despite the world investing more than $9.5 trillion over the past two decades. Wind and solar energy currently provide less than 4% of the world’s energy, while the total penetration of electric vehicles is less than 3%.

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

Gas has grown 70% since the turn of the century, Nasser said. The transition from coal to gas is responsible for most of the reduction in carbon emissions, he said.

“This is certainly not the picture of the future that some have painted,” Nasser said. “They too are starting to recognize the importance of oil and gas safety.”

Developing nations in the Global South, meanwhile, will drive demand for oil and gas as prosperity increases in those nations, which represent more than 85% of the world’s population, the CEO said. These nations receive less than 5 percent of renewable energy investments, he said.

Nasser said the world should focus more on reducing emissions from oil and gas, as well as renewable energy. The CEO said efficiency improvements alone reduced global energy demand by nearly 90 million barrels of oil equivalent per day.

“We should gradually introduce new energy sources and technologies when they are truly ready, economically competitive and equipped with the right infrastructure,” Nasser said.