• Saudi executive says approach to energy transition must recognise role of conventional energy sources

Davide Ghilotti, Upstream

CALGARY
Energiesnet.com 09 20 2023

A premature phase out of fossil fuels supply will put global energy security at risk, according to Saudi Aramco chief executive Amin Nasser, who called for a new approach to address what he called the “shortcomings” of the energy transition.

Nasser was speaking during the 24th World Petroleum Congress in Calgary, Canada, on Monday morning, after being presented with the Dewhurst Award, in recognition for services to the petroleum industry.

The head of the world’s largest oil producer hit out at what he described as political targets for the transition that are removed from the needs of energy markets and from the realities of the existing supply/demand balance.

“I see many shortcomings [in the approach to the energy transition],” he said in Calgary, speaking of “unrealistic targets for the energy mix”.

“Despite concerted efforts to move to alternatives, coal demand is at a global record. And oil consumption [could] reach 103 million to 104 million barrels of oil per day in the second half of 2023, which would be a record [high],” he said.

Commenting on recent forecasts by the International Energy Agency that oil demand would peak within the next decade, he added: “This notion [of peak oil] is mostly being driven by policy rather than markets.”

Nasser said that renewable energy sources, specifically wind and solar, will be the “bedrock” of the transition process, but added that they supply only 5% of primary energy consumption today, and ignoring this to drive down fossil fuels would affect energy availability.

“Phasing out [fossil fuels] prematurely would put energy security at risk,” he said.

The executive called for a different approach to tackling the energy transition, one that would consider multiple solutions, as well as technologies and energy sources, that reflect the different economic situations of countries and regions.

He pointed out that access to energy and “economic survival” are the priorities for a large part of the Global South, while advanced economies are pushing for net zero.

He called for a “more realistic” and “multi-speed” set of strategies to address that imbalance.

In his view, transition plans must “recognise” the role of conventional energy sources – fossil fuels – while investment and capital allocation need to be directed towards both clean sources as well as conventional energy.

On Sunday evening during the opening ceremony of the Congress, Alberta Premier Danielle Smith struck a similar note when she said her government and the industry will work to continue providing hydrocarbons to consumers while reducing upstream emissions.

She remarked that the industry was working to “phase out emissions, not to phase out oil and natural gas”

upstreamonline.com 09 18 2023