Energy transition strategy ‘visibly failing’, says Aramco CEO

Reuters/Maria Caspani

• ‘Still not scaled up sufficiently’
• No peak in oil and gas ‘for some time’
• Alternatives ‘currently unaffordable’

Saudi Aramco’s chief executive believes the current global energy transition strategy is “visibly failing on most fronts” and needs an urgent reset.  

Despite $9.5 trillion of investment in the past two decades, other energy sources have still not scaled up sufficiently to offer an alternative to hydrocarbons, Amin Nasser told the CERAWeek by S&P Global conference in Houston on Monday.

“A transition strategy reset is urgently needed,” he said.

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Nasser, who runs the biggest oil and gas company in the world, said that the hydrocarbon industry is “painted as transition’s arch enemy”. However, he said, “when the world focuses on reducing emissions from hydrocarbons, it achieves much better results, despite the contribution of alternatives to reducing greenhouse gas emissions.”

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Nasser, who has been at the helm of Aramco for nine years, said that many of the alternatives currently on offer were unaffordable for most people worldwide, endangered energy security and ignored consumers’ needs for reliable, affordable supplies.

He said global oil demand was expected to reach an all-time high in the second half of this year, due largely to the potential in developing countries.

“It is an important reason why some predict growth through 2045,” he said.

Nasser said wind and solar combined supplied under 4 percent of world energy today, while electric vehicle penetration was less than 3 percent.

Countries agreed last year at the Cop28 climate conference in Dubai to triple renewable power capacity to 11 terawatts by 2030.

Nasser said that the share of hydrocarbons has barely fallen in the 21st century from 83 percent to 80 percent, while demand has grown by almost 100 million barrels a day of oil equivalent over the same period.

He said that all this strengthened the view that a peak in oil and gas demand was unlikely to occur for some time, let alone by 2030. 

“It seems no one is betting the farm on that,” Nasser said. 

The International Renewables Energy Agency (Irena), which is based in Abu Dhabi, said a record 473 gigawatts of renewables was added to the global energy mix in 2023.

Irena’s director general, Francesco La Camera said in a statement on Tuesday that despite the new record, the 11 terawatt target was far from guaranteed.

La Camera said that Irena’s data confirmed that progress in renewables continued to fall short and the energy transition remained off track.

“We urgently need a systemic shift away from fossil fuels to course-correct and keep the tripling goal within reach,” he said.