According to the top official of Saudi oil giant Aramco, the world needs a new, practical pathway for the energy transition that includes oil and gas because the current transition strategy is failing on most fronts due to its collision with five hard realities.
These harsh facts include the necessity of restarting international efforts to achieve climate goals, the failure of alternatives to date to replace hydrocarbons on a large scale, the expenses of alternatives, the need for energy in the Global South, and the possibility of additional emissions reductions from hydrocarbons, Amin H. Nasser, the Aramco President & CEO said at CERAWeek 2024 in Houston, Texas, USA.
CERAWeek is an annual conference. Every year, leaders, ministers, public policy officials, and CEOs from all over the world come together to exchange ideas, creative solutions, and insights about energy, climate change, and environmental issues.
At CERAWeek, which boasts over 1,400 knowledgeable speakers, over 8,000 representatives from the energy, utilities, automotive, manufacturing, policy, financial, and technology sectors are present.
“We should abandon the fantasy of phasing out oil and gas and instead invest in them adequately, reflecting realistic demand assumptions. We should ramp up our efforts to reduce carbon emissions, aggressively improve efficiency, and introduce lower carbon solutions,” Amin Nasser said, on reducing emissions from oil and gas, as reported by the Zawya.
“And we should phase in new energy sources and technologies when they are genuinely ready, economically competitive, and with the right infrastructure,” the official stated further.
“As the current transition strategy increasingly impacts the majority, not just a tiny minority, consumers around the world are sending powerful messages that can no longer be ignored,” Amin Nasser said, on the energy transition’s impact on consumers.
“We know they want energy with lower emissions, and rightly so. But many are struggling to afford the energy they need. And they worry about ample and reliable supply, which the recent energy crisis showed is not guaranteed…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,” he stated.
Amin Nasser also noted that the alternative energy sources have been unable to displace hydrocarbons at scale, despite the world investing more than USD 9.5 trillion over the past two decades.
“Wind and solar currently supply less than 4% of the world’s energy, while total electric vehicle penetration is less than 3%,” the official said further, while adding, “the share of hydrocarbons in the global energy mix has barely fallen in the 21st century from 83% to 80%.”
“Global demand has increased by 100 million barrels of oil equivalent per day during the same period and will reach an all-time high this year,” the Aramco boss observed further.
“Gas has grown 70% since the start of the century. The transition from coal to gas is responsible for two-thirds of the reductions in carbon emissions in the US,” Amin Nasser concluded.