Global energy transition targets are based on “unrealistic” scenarios, the head of Saudi oil giant Aramco said Tuesday, calling for an acceleration of fossil fuel investments in light of energy shortages.
“When you ostracize oil and gas investors, dismantle coal and oil-fired power plants, fail to diversify your energy sources … oppose LNG (liquefied natural gas) terminals and reject nuclear power, you better have a good energy transition plan,” Aramco CEO Amin Nasser said at a conference in Switzerland.
However, the current crisis has shown that this plan was only a “succession of sand castles washed away by the waves of reality. And billions of people around the world are now suffering the consequences in terms of access to energy and cost of living, which are likely to be severe and prolonged,” added the head of the world’s largest crude producer.
Consumers are affected by the surge in energy prices following Russia’s war in Ukraine and the post-pandemic rebound in global demand. The situation is particularly serious in Europe, where electricity bills are likely to skyrocket this winter due to the decline in Russian gas supplies.
Since the beginning of the year, the Organization of the Petroleum Exporting Countries (Opec), led by Saudi Arabia, has resisted Western calls to pump more crude to try to calm prices, citing limited additional production capacity.
In August, Opec decided instead to lower its production in response to the risk of a global recession.
The origins of the energy crisis run deeper than the war in Ukraine, Aramco’s boss hammered on Tuesday, criticizing the “unrealistic scenarios” on which global energy transition goals are based, whether it’s the speed of deployment of renewables or the shift to electric vehicles.
“We are not saying that global warming goals should be changed,” he said, but policymakers must “recognize that an abundant and affordable supply of conventional energy is still needed over the long term.”
Aramco, which is mainly owned by the Saudi state, announced in August a record second quarter net profit of $48.4 billion.
