Aramco CEO urges unity on energy transition goals

Saudi Aramco's president and CEO Amin Nasser believes the world must agree on common goals to bring uninterrupted energy access to more of its citizens, while also mitigating the serious impacts of the climate emergency.

Speaking at Schlumberger's Digital Forum, just as Europe prepares for a winter that could cost thousands of lives, Nasser stressed a multi-lateral "recognition" would need to be reached to provide "affordable" and "conventional" energy to citizens longer-term, continuing in many cases well beyond the net zero targets stipulated by the UN agreement.

"As the pain of the energy crisis sadly intensifies, people around the world are desperate for help," Nasser said.

"In my view, the best help that policymakers and every stakeholder can offer is to unite the world around a much more credible new transition plan, driving progress on the three strategic pillars I have outlined this morning.

"That is how we deliver a more secure and more sustainable energy future."

Nasser's comments underscore growing industry concern that the energy transition could be unevenly biased toward new and emerging forms of energy production - chiefly renewables - that are too costly for developing countries to use effectively.

He is suggesting the road to net zero should instead focus on lessening the carbon footprint of traditional energy sources like oil and natural gas. For instance, carbon capture and storage could be installed at oil production facilities and power plants to massively reduce and even eliminate carbon emissions.

Global investors are tightening the supply of cash on hand to deliver new oil and gas projects, in many cases following environmental, social and governance objectives that massively favour renewables, regardless of the specific energy concerns of the country in question.

Nasser said funding for oil and gas infrastructure crashed by more than 50% from 2014 to last year, falling from $700bn to slightly above $300bn. The effect for the world could be disastrous, he added. "The increases this year are too little, too late, too short-term."

"The response so far betrays a deep misunderstanding of how we got here in the first place, and therefore little hope of ending the crisis anytime soon.

"So this morning I would like to focus on the real causes as they shine a bright light on a much more credible way forward.

Many of the planning scenarios for using less oil and gas were prepared as Covid rampaged over societies and economies. As a result, those forecasts are now being proved wrong.

For example, oil demand fell drastically with government-mandated shutdowns. Nasser says one strategy paper has suggested oil could be almost immediately replaced, as people would buy less of the fuel once Covid had ended.

Renewable sources like solar and wind today account for 10% of global electricity production, and less than 2% of the world's primary energy supply. Despite government backing, only 2% of the world's motor vehicles are electric, and electric motorists on the road are now burdened with soaring electricity prices.

"When you shame oil and gas investors, dismantle oil and coal-fired power plants, fail to diversify energy supplies (especially gas), oppose LNG receiving terminals, and reject nuclear power, your transition plan had better be right," Nasser said, adding that the cost-of-living fallout would be "severe and prolonged", affecting billions of citizens.

Meanwhile, the net effect of reduced investments in gas has meant there are no contingency plans in place. Coal power plants are predicted to generate some 8mn metric tons more emissions than they did last year, pumping far more carbon into the atmosphere than gas or even oil when burned. Meanwhile oilfields are being depleted at a rate of 6%/yr, meaning more money is needed to replace the oil barrels out on the field.

Nasser concluded: "This is why I am seriously concerned. Let me be clear: we are not saying our global climate goals should change because of this crisis. All of us have a vested interest in climate protection."