A delegation from Saudi Arabia attending the World Petroleum Congress in Calgary has urged caution in ditching oil and emphasized the need for a realistic energy transition that includes continued investment in oil and gas. The delegation, led by Energy Minister Abdulaziz bin Salman Al Saud, argued that focusing solely on climate change without considering energy security and affordability could impede economic growth. These remarks come at odds with the net-zero theme of the conference, which promotes a shift away from fossil fuels. While many governments and environmental groups are pushing for faster action on climate change, some executives and politicians believe that achieving net-zero emissions will require a slow and uncertain path without a clear roadmap.
Recently, the International Energy Agency (IEA) issued a report stating that peak demand for fossil fuels could occur within the next decade. The IEA’s forecasts mark a significant turning point in global energy systems by indicating a shift towards cleaner and more secure energy sources. However, the IEA also cautioned that the projected decline in fossil fuel demand is not sufficient to limit temperature rises to 1.5°C above pre-industrial levels and prevent a climate catastrophe. Despite this outlook, Amin Nasser, the CEO of Saudi Arabia’s state-owned oil and gas company, disputed the idea of peak demand and cited the continued robust consumption of coal and oil. He claimed that renewables still represent a small share of global energy consumption and new solutions like green hydrogen are costly.
The president and CEO of ExxonMobil, Darren Woods, echoed similar sentiments at the conference, emphasizing the importance of maintaining investment in the industry to avoid supply shortages and high prices. The differing perspectives on the future of the oil and gas industry highlight the complexities and debates surrounding the transition to cleaner energy sources. While some argue for a gradual shift, others contend that delaying the transition poses risks to global energy security. Finding a balance between investing in hydrocarbons and newer energies will be crucial in meeting growing energy demands and reducing emissions.
The oil and gas sector’s financial strength, demonstrated by the recent surge in North American oil prices, provides an opportunity for the industry to invest in emission reduction initiatives and low-carbon energy sources. However, environmental groups have criticized the industry for not allocating enough of its profits towards meaningful climate action. Against the backdrop of record-breaking wildfires and rising temperatures worldwide, activists have protested outside the World Petroleum Congress, urging major oil producers to accelerate the transition away from fossil fuels.
Sources:
- CBC News: “Debates about energy transition occur at oil and gas conference”
- International Energy Agency: “World’s appetite for fossil fuels may peak within a decade as net-zero goals accelerate”
- Financial Times: “IEA warning marks major turning point on fossil fuels”