CERAWeek: Saudi Aramco CEO highlights global energy crisis, energy transition woes
HOUSTON — Saudi Aramco CEO Amin Nasser put a spotlight on the impact of the war in Ukraine on the global energy market and production demands during the CERAWeek by S&P Global conference. S&P Global Vice Chairman Daniel Yergin hosted an executive plenary session with Nasser, who said the invasion in Ukraine worsened the global energy crisis, placing partial blame on flawed plans for alternative energy.
War collides with Energy Transition. “The global energy crisis has been accelerated by the tragic situation unfolding in Ukraine,” Nasser said. “It has exposed the limitations of current energy policies and is a bleak reminder of the impact that politics can have on fragile energy transition plans.” He said the primary shortfall with the energy transition is that it is being dominated by “groupthink,” which lacks an understanding of the energy business, or the scale and complexity of the challenges. “If alternative energy sources could have shouldered the burden, they would have. But ambition is still far ahead of reality,” he added.
Mixed policy signals. Nasser told CERAWeek attendees that the global crises expose the mixed signals delivered by policymakers to the oil and gas industry amid the energy transition. "As oil and gas investments are discouraged, demands are being placed on our industry to increase production," he said. Nasser noted this not only presents a direct threat to economic prosperity and energy security but leads to an assured path to end the supply of affordable energy. On that end, he highlighted that production capacity available to ease oil supply shortages is limited, estimating there are about 2 MMbpd, or 2% of world demand, of what he described as "effective spare capacity."
Role of oil and gas. Contrary to the consensus of a net-zero future, he said the world needs all energy sources to support a successful transition and stressed that the demonization of the oil and gas industry will be counterproductive to resolving the global energy crisis. “There are major gaps and real challenges that only our industry can help with,” he said. “We need consensus on the essential role of oil and gas with lower emissions working side-by-side with alternatives, to meet the rising global call on energy and deliver on net-zero ambitions." He continued, “We need to embrace new uses for hydrocarbons, such as blue hydrogen, combined with technologies like CCUS, without which net zero is unlikely to be reached.”
Nasser urged the industry to listen to young professionals’ concerns on climate change and develop solutions based on that information instead of mimicking strategies seen in countries like Norway.
“Let’s not pretend what works in developed countries will work in other developed or undeveloped countries,” he said. “Our industry must play its parts, too, which means listening to legitimate concerns about our industry … it means talking freely about the role of EVs, wind and solar in a sustainable energy future. And, it means intensifying and accelerating the reduction in greenhouse gas emissions from oil and gas as an urgent and strategic priority.”
