Aramco chief says fossil fuels cannot be phased out until renewables can meet demand

Energy industry chiefs must work towards an orderly transition to renewables rather than follow the flawed plan currently in place, the chief executive of Saudi Aramco has said.

Speaking on the opening day of the Energy Intelligence Forum in London, Amin Nasser said if fossil fuels were phased out before enough forms of green energy were available, it would result in a gap opening up.

He said Aramco, the largest provider of crude oil to global markets, is committed to working with other companies to meet its net zero by 2050 goals, but called for a degree of realism.

“Alternatives are not ready yet to shoulder a bigger portion of the energy required,” he said.

“Until they are ready, we need to work it out, we need to [look to] oil and gas,” he said, while noting the need to invest further in technology such as carbon capture and hydrogen.

“We are for climate protection but … we need to make sure we don’t end up with shortages of supply.”

Mr Nasser stressed that forms of green energy must be cheaper and easily available if they are going to replace fossil fuels on markets.

“Affordability and availability is a must, so we need to invest to ensure gas, crude, decarbonised [energy] is available,” he said.

“And when renewable [energy] is ready, you can phase out crude, gas. But make sure that it is ready first. This is where we have a flawed transition plan.”

Mr Nasser also said global oil stocks were “extremely low”.

He said his company was “progressing very well” towards its net zero by 2050 goals and called for greater co-operation in the industry to find green alternatives to energy.

“We are for climate protection and we are committed to be part of the solution in energy investments,” he said. “We need to work together and we need to believe in an orderly transition.”

He also touched on the challenges facing Europe’s high demand for energy and upheaval in markets after Russia’s invasion of Ukraine.

Demand for oil and gas picked up “big time” after the Covid-19 pandemic, he said, driving the prices of energy up before the situation was intensified due to the war.

“The issue for Europe is gas and energy because there is no spare capacity available,” he said.

“These are all on long-term contracts. As you drop supply coming from Russia, no one does really step up and meet the additional demand. So, it is going to be a major issue in Europe when it comes to gas and energy.”