RIYADH: Saudi Aramco CEO Amin Nassir on Monday rejected what he called a “deeply assumption” that the entire world can run on alternatives and the vast global energy system can be totally transformed, virtually overnight.
He was speaking at a global energy conference devoted to future technologies and low-carbon strategies in Houston.
The Aramco chief said several highly unrealistic scenarios about the future of energy are clouding the picture such as investments worth “roughly $115 trillion will be made in less than 30 years.”
“Energy security, economic development, and affordability imperatives are clearly not receiving enough attention,” he said.
“There are still no truly viable alternatives to conventional fuels in aviation, shipping, and even trucking.”
His global counterparts at the World Petroleum Conference also affirmed the need for more oil for decades to come.
“We in fact are going into a period of scarcity. And I think that for the first time, in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” said Jeff Miller, CEO of energy services firm Halliburton.
World fossil fuel demand has rebounded sharply in 2021, with natural gas already at pre-pandemic levels and oil nearing levels reached in 2019. That comes even as large global majors, especially those based in Europe, are limiting exploration and production in an attempt to shift to renewable power development and as governments promote efforts to reduce cut carbon emissions to deal with rising worldwide temperatures.
The Aramco chief said due to the mounting pressure to stop all investments in oil and gas, the upstream capex has fallen by more than 50 percent between 2014 and last year, from $700 billion to $300 billion.
“Consequently, supplies have started to lag. This is also hurting spare oil production capacity, which is declining sharply. Yet this is happening against the backdrop of healthy demand growth.,” Nasser said.
Oil rose 3 percent a barrel to about $72 on Monday on hopes the omicron variant would be less damaging to oil demand.