Aramco CEO Warns Of Social Discord And Rampant Inflation if Fossil Fuels Are Ditched Too Quickly, Bats For Continued Investments In Oil And Gas

Saudi Aramco CEO Amin Nasser has said that fossil fuels will play a key role in energy mix for a much longer time and urged the world leaders to continue investing in fossil fuels.

The chief of the world's largest oil company was speaking at the 23rd World Petroleum Congress currently underway in Houston.

Nasser warned of energy insecurity, rampant inflation, and social unrest if energy prices become "intolerably high" due to plummeting investments in fossil fuels and unrealistic energy transition plans.

Terming the existing energy transition strategy for the industry as “deeply flawed”, Nasser said that critical considerations like energy security, economic development and affordability imperatives are not receiving adequate attention.

"Publicly admitting that oil and gas will play an essential and significant role, during the transition and beyond, will be hard for some. But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation, and social unrest if prices become intolerably high. And net-zero commitments by countries may start to unravel." Nasser said,

Pointing out that capex in upstream sector fell by more than 50 percent between 2014 and last year (from $700 billion dollars to $300 billion), Nasser said that crude supplies have already started to lag despite healthy demand.

Climate Goals

Nasser reiterated Aramco's commitment to climate goals and a net-zero economy but cautioned that stopping oil and gas investments could prove to be more damaging.

He highlighted that more than 99% of the world's vehicles are still dependent on conventional fuels and the “combined share of solar and wind in the world's primary energy mix is still less than 2%".

“The urgent new quest for our industry is to chart a course that will continue to realistically meet the world's rising energy needs in a reliable, affordable and sustainable manner." he added

Nasser said that there is currently no credible course towards the climate goals that does not include Carbon Capture, Utilization, and Storage.

Energy Transition

Nasser termed the energy transition as "flawed" and "chaotic".

"Several highly unrealistic scenarios and assumptions about the future of energy are clouding the picture. For example, it is increasingly assumed that the entire world can run on alternatives, and the vast global energy system can be totally transformed, virtually overnight." he said

Arguing that energy transition can be achieved only through a stable, practical, and inclusive strategy is in place, Aramco chief urged the need for genuinely global engagement and willingness to discuss facts without stubbornness.