Saudi Aramco’s CEO, Amin Nasser, delivered a striking message at the CERAWeek by S&P Global energy conference in Houston, Texas, stating that the current approach to the energy transition is faltering and policymakers need to rethink their strategies.
Nasser emphasized the importance of abandoning the notion of rapidly phasing out oil and gas, urging instead for investments that align with realistic demand projections.
“In the real world, the current transition strategy is visibly failing on most fronts as it collides with five hard realities,” Nasser asserted during a panel interview, prompting applause from the audience.
He stressed the urgency for a reset in transition strategy, advocating for a shift in focus from unrealistic goals towards adequately investing in oil and gas.
Nasser disagreed with the IEA’s prediction that demand for oil, gas, and coal will peak by 2030, saying it’s unlikely to happen anytime soon, especially in developing regions.
While acknowledging investments exceeding $9.5 trillion in alternative energy sources over the past two decades, Nasser highlighted the limited success in displacing hydrocarbons at scale. He pointed out that wind and solar combined contribute less than 4% to global energy, with electric vehicle penetration standing below 3%.
Contrary to expectations, hydrocarbons still dominate the global energy mix, with a marginal decrease from 83% to 80% in the 21st century. Nasser emphasized that global demand continues to soar, reaching record levels this year, with gas witnessing a significant 70% growth since the turn of the century.
Addressing concerns about carbon emissions, Nasser credited the transition from coal to gas for notable reductions. He underscored the necessity of oil and gas security, especially as developing nations in the global south drive demand amid rising prosperity.
Despite representing over 85% of the world’s population, these nations receive minimal investment in renewable energy.
Nasser emphasized the importance of balancing emissions reduction efforts across oil, gas, and renewables, highlighting the significant role of efficiency improvements in curbing energy demand.
“We should phase in new energy sources and technologies when they are genuinely ready, economically competitive, and with the right infrastructure,” Nasser concluded, advocating for a pragmatic approach to the energy transition.
