Saudi Aramco's chief executive Amin Nasser on Monday pushed for a new global energy mode, arguing that the money spent on global climate action has yielded few tangible results.
Mr Nasser said about $10 billion in transition spending in the past 20 years included promises of cheaper and more sustainable energy that were “impossible to keep”. He said it would cost an estimated $6 trillion to $8 trillion annually to fund climate action properly.
“It has been a painful awakening for those who thought energy affordability and security could be taken for granted,” he said during a speech at the CERAWeek by S&P Global energy conference in Houston, Texas.
He also highlighted the “greatest transition fiction”, that conventional energy could be replaced entirely overnight by alternative sources. The Saudi Aramco chief said hydrocarbons account for more than 70 per cent of energy in Europe, more than 80 per cent of primary energy in the US and almost 90 per cent in China.
“That's why the current strategy of prematurely switching to immature alternative has been so self-destructive,” Mr Nasser said. “New sources cannot even meet the growth in demand, while the proven sources needed to fill the gap are demonised and discarded. It is a vast drive to dystopia, not utopia.”
The result, he said, was global spending of $10 trillion while not reducing its consumption of coal. “Not exactly mission accomplished,” Mr Nasser said.
Global electricity consumption is predicted to nearly double by 2050, according to the US Energy Information Administration. Driving this consumption, Mr Nasser said, was the increasing use of artificial intelligence, air conditioning and vitrification, the process of turning a liquid into glass without crystallising.
But the transition to electricity comes amid a slowdown in electric vehicle sales. JD Power, a consulting firm, lowered its forecast for EV market sales in the US for 2024 from 12 per cent to 9 per cent.
Some car makers have either dialled back or scrapped EV plans completely. Ford, General Motors and other car makers have scaled back their EV plans due to higher costs.
“We see growth growing pushback from consumers who value choice and affordability over mandates,” Mr Nasser said.
Push for new global model
Mr Nasser made the case for a new global climate action model in which all energy sources would support growth in meeting increasing demand “in a balanced, integrated manner”.
He also pushed for deregulation and greater incentives for financial institutions to deliver “unbiased financing”.
“Let me be absolutely clear: this does not mean stepping back from our global climate ambitions,” Mr Nasser said. “Reducing greenhouse-gas emissions must still get the highest possible priority.”
He also said goals must serve developed and developing nations, and focus on delivering “real results”.
Mr Nasser noted that the world's poorest seven billion people are accounting for most of the growth in energy demand, but only receive 3 per cent of energy transition investment.
The Saudi Aramco chief executive said AI will be a crucial driver in helping to enable technology that could help further reduce greenhouse-gas emissions from traditional energy sources. “It is time to stop reinforcing failure … there is a historic opportunity to change course,” he said.
Mr Nasser was among a large number of energy executives in the southern US state of Texas for CERAWeek, an annual energy conference. Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, and Cop28 President, was scheduled to address the conference on Tuesday.
