The answer from Aramco’s President & CEO is no.
At CERAWeek – the world energy conference hosted by S&P Global – Amin Nasser argued that despite the $9.5 trillion in investments made towards the global energy transition in the 21st century, the share of hydrocarbons in our collective energy supply has only fallen from 83% to 80%.
In contrast, he pointed out that both solar and wind energy combined supply a meagre 4% of world energy usage.
The problem of affordability is insurmountable according to Amin. For instance, hydrogen fuel – a highly anticipated alternative to oil and gas – remains 2-4 times more expensive than an equivalent barrel of oil on current energy markets.
Equally, without government subsidies, EVs are 50% more costly than the average internal combustion vehicle. This is arguably reflected in the total penetration of electric vehicles, at less than 3%.
He urged the conference to abandon the “fantasy” of phasing out oil and gas, instead investing in them so that they reflect realistic demand assumptions.
While Amin does raise important concerns about the current cost of alternative energy sources, it can be argued that he misses the long-term economic benefits and associated cost reductions that continued investments into the energy transition could provide.
Similarly, highlighting the effects government subsidies have on price without the role they play in broader market transformation could be seen to be omitting the truth at best.
It’s clear that oil and gas will remain a significant part of our energy supply for the foreseeable future. Whether we should give up on our ambitions towards net-zero appears to depend on who you ask.
Read the full article by ZAWYA here.
- John Barker