Though Saudi Aramco and Exxon Mobi have thrown their weight behind global transition to cleaner forms of energy, they said oil would continue to play a major role for decades to come.
Both chief executive officers touted capturing and storing carbon as a climate solution viewed sceptically by environmentalists as one of the best way to significantly reduce emissions from burning fossil fuels.
They also stated that cutting oil usage too quickly would be dangerous, given the growing global demand for energy.
“There seems to be wishful thinking that we’re going to flip a switch and we’ll go from where we’re at today to where it will be tomorrow,” Exxonmobil chief executive officer Darren Woods said during a panel discussion at the World Petroleum Congress (WPC), in Calgary.
“No matter where demand gets to, if we don’t maintain some level of investment in the industry, you end up running short of supply, which leads to high prices, “ he stressed.
The comments come as the oil and gas industry hits back against its critics and fights for control over the narrative surrounding the global energy system’s transformation 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 tough spell at the height of pandemic, when demand and profits collapsed, the industry has bounced back amid higher oil and gas prices, and landed on a common approach:
Yes, climate change is real and carbon emissions must be cut, but Big Oil is still essential in meeting world energy demand, and it can do that while engineering a solution to aggressively slash pollution.
Both Woods and Saudi Aramco CEO, Amin Nasser were bullish on the prospects for oil demand and disdainful of other forecasts for how quickly the world will wean itself off of crude.
Nasser said he expects record usage of 103 million to 104 million barrels a 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 developing new sources of production, rather than paring back output as environmentalists want.
The lull in exploration and production spending after the pandemic-induced retreat in energy demand in 2020 has been blamed in part for the soaring oil and natural gas prices that shook the world last year after Russia’s invasion of Ukraine.
“We need to invest,” Nasser told the conference, which is being held at the same time as Climate Week in New York. “Otherwise in the mid to long term, we will have another crisis and we will go backwards in terms of using more and more coal and other cheap products available today. And all these decarbonisation efforts will go down the drain.”
Saudi Energy minister, Prince Abdulaziz bin Salman said, the kingdom wants to support the transition but politicians must be honest about the challenges ahead, and the risks if the shift isn’t managed well.
Prince Abdulaziz mused that he would like a session at the next World Petroleum Congress, scheduled to be held in Riyadh in 2026, that would discuss how Saudi Arabia managed to transition without creating “havoc” in its economy.
Echoing those comments, secretary general of the African Petroleum Producers Association, Omar Farouk Ibrahim, said the economies of the nations he represents shouldn’t be jeopardised by the transition.