(Bloomberg) — Executives at Saudi Aramco and Exxon Mobil Corp. took the stage Monday at a major industry event to express support for the global transition to cleaner forms of energy, but one in which oil continues to play a major role for decades to come.
Most read on Bloomberg
Both CEOs touted carbon capture and storage — a climate solution viewed with skepticism by environmentalists — as one of the best ways to dramatically reduce emissions from burning fossil fuels. They also said it would be dangerous to reduce oil consumption too quickly, given growing global demand for energy.
“There seems to be wishful thinking that we’re going to flip a button and go from where we are today to where we’ll be tomorrow,” Exxon CEO Darren Woods said during a round table at the World Trade Center. Oil conference in Calgary. “No matter where the demand comes in, if we don’t maintain a certain level of investment in the industry, we end up running out of supply, which leads to high prices. »
The comments come as the oil and gas industry fights back against its critics and struggles to control the discourse surrounding transforming the global energy system to limit the impact of climate change.
The sector is a natural magnet for criticism from clean energy advocates, environmental activists and pro-green politicians. But after a difficult period at the height of the pandemic, when demand and profits collapsed, the industry bounced back amid rising oil and gas prices and took a common approach: yes, change Climate change is real and carbon emissions must be reduced, but Big Oil remains essential to meeting global energy demand, and they can do this while developing a solution to aggressively reduce pollution.
Woods and Saudi Aramco CEO Amin Nasser were optimistic about the outlook for oil demand and dismissive of other predictions about how quickly the world would wean itself off crude.
Nasser said he expects record usage of 103 million to 104 million barrels per day in the second half of this year, with demand climbing to 110 million by 2030. That puts the onus on the industry to continue to develop new sources of production, rather than reducing costs. return to production as environmentalists wish.
The lull in exploration and production spending after the pandemic-induced decline in energy demand in 2020 was partly blamed on the surge in oil and natural gas prices that shook the world last year after Russia’s invasion of Ukraine.
“We have to invest,” Nasser said at the conference, which coincides with Climate Week in New York. “Otherwise, in the medium to long term, we will experience another crisis and we will go backwards in terms of using more and more coal and other cheap products available today. And all these decarbonization efforts will be doomed to failure.
Read more: How carbon capture is getting new life with help from the US: QuickTake
Saudi Energy Minister Prince Abdulaziz bin Salman said the kingdom wanted to support the transition, but politicians needed to be honest about the challenges ahead and the risks if the change was not managed well. Prince Abdulaziz said he would like a session at the next World Oil Congress, scheduled for Riyadh in 2026, that would discuss how Saudi Arabia managed its transition without creating “havoc” in its economy.
Echoing these comments, Omar Farouk Ibrahim, secretary general of the African Petroleum Producers Association, said the economies of the countries he represents should not be jeopardized by the transition.
“Given our special situation in terms of socio-economic development and the fact that the problems of climate change have not been caused by us but by the economically advanced countries of the world using fossil fuels, it is unfair to call us to join the same fast train towards net zero emissions. and punitive,” he said at a press conference.
Alberta Premier Danielle Smith, whose province hosts the conference and holds the world’s third-largest crude reserves in its tar sands deposits, said energy must remain affordable and reliable. She also provided what may be a summary of the views of many conference attendees.
“We’re moving away from emissions,” Smith said, “we’re not moving away from oil and natural gas.”
Most read from Bloomberg Businessweek
©2023 Bloomberg LP
