RIYADH: Global sustainability goals will not be met without considering the developments of different economies, alternative energy affordability and growing power demand, according to the CEO of Aramco.
Speaking at the Future Investment Initiative in Riyadh, Amin Nasser said while the rhetoric surrounding climate change is there, greener supplies are not ready to meet the demands of the market.
The CEO also used his address to warn about the economic impacts of moving away from fossil fuels before other energy sources are cost-efficient.
“One size fits all is not acceptable, you need a transition that takes the economic maturity of different countries, and a multi-speed transition, otherwise we are not going to meet what we are aspiring to by 2050,” Nasser said.
The CEO highlighted the inflationary pressures that swept across the globe in the aftermath of the COVID-19 pandemic, saying: “Prices went up, coal started increasing in terms of demand — coal is at its highest level today, 8.3 billion tons, so we added a lot in coal because its more affordable and the other alternatives are not ready.
He added: “Everybody talks about hydrogen, but it costs much more than traditional sources of energy. For blue hydrogen it’s $200 per barrel of oil equivalent, green hydrogen is $400 dollars per barrel. When you go to customers today, it will be very difficult for them to sign an offtake.”
Speaking alongside Nasser in a session titled “The Energy Matrix,” the CEO of TotalEnergies, Patrick Pouyanne, echoed this notion: “Yes, we have invested in the last 15 years in solar in wind, in low-carbon energies, but it was not enough to compensate the huge increase of demand. That’s why this transition is complex.”
“To make the (energy) transition, it’s not a matter of supply and demand. What is complex is to change the demand pattern… if we change the supply, but our customers don’t change their demand pattern, it will not work,” he added.
The Aramco CEO also outlined the linear perspectives that dialogues surrounding climate change are taking place, noting that they are largely focused on priorities of the Global North.
“Today, the energy transition does not really solve the priorities of the Global South, and we need to be clear about that.”
“Eighty percent of what we produce today in energy go to the Global South not to the Global North, by 2050, 90 percent of the energy we produce will go to the Global South. If we do not look at the Global South’s needs and priorities we will not meet the energy goals,” he said, while calling on a discourse surrounding the energy transition to become more inclusive of varying needs.
Nasser warned that when discussing emissions, there are no barriers or borders; even if emissions are reduced in the Global North, if they do not meet the affordability needs of those living in poverty in the Global South, the collective climate goals will not be met.
