Saudi oil delegation at World Petroleum Congress says we’re nowhere near peak fossil fuel

As lots of of oil and gasoline executives and authorities representatives descend on Calgary for the World Petroleum Congress, a delegation from Saudi Arabia is warning of the results of ditching oil and preaching the necessity for a extra real looking vitality transition and extra funding in oil and gasoline.

The nation has the most important delegation on the convention of any nation or firm, led by Vitality Minister Abdulaziz bin Salman Al Saud, who advised the group of delegates that the sector cannot solely give attention to local weather change.

“If we actually wish to be trustworthy to the concept we will likely be transitioning, now we have to additionally ensure that transitioning occurs whereby you find yourself attending to vitality safety, making certain that vitality remains to be reasonably priced, and doesn’t act as an obstacle to financial prosperity and progress,” he stated whereas onstage.

 “And for those who do not do the entire above, I am sorry, however I do not suppose you might attend to local weather change points.”

Web zero?

The pitch by the Saudi delegation runs considerably counter to the net-zero theme of this 12 months’s World Petroleum Congress, although it is shared by many in attendance. Alberta Premier Danielle Smith made related feedback this week, together with the top of ExxonMobil, one of many world’s largest publicly traded worldwide oil and gasoline firms.

However outdoors the partitions of the World Petroleum Congress there’s pushback to this narrative. A latest, bombshell op-ed from the Worldwide Vitality Company (IEA) suggests peak demand for fossil fuels will occur throughout the subsequent decade and that, whereas timelines fluctuate, oil, gasoline and coal are all on their means out.

The 2 views exemplify the basic debate that surrounds the oil and gasoline trade, as some governments and environmental teams stress firms to maneuver quicker on local weather change — particularly given their report income — whereas executives and some politicians warning the street to net-zero is a sluggish, windy path with no clear street map.

Simply days earlier than the World Petroleum Congress kicked off, the IEA warned how the world’s urge for food for oil and different fossil fuels could peak earlier than the top of this decade.

It is the primary time the worldwide vitality watchdog has predicted peak fossil fuels will arrive so quickly.

Fatih Birol, the IEA’s head, wrote in the Monetary Instances final week that the projections would present that “the world is on the cusp of a historic turning level.”

“Peaks for the three fossil fuels are a welcome sight, displaying that the shift to cleaner and safer vitality techniques is rushing up and that efforts to keep away from the worst results of local weather change are making headway,” he wrote.

Nonetheless, Birol warned the IEA’s forecast downturn is nowhere close to steep sufficient to place the world on a path to limiting temperature rises to 1.5 C above pre-industrialized ranges, which is taken into account vital to avoiding a local weather disaster.

However talking to convention delegates Monday, the president and CEO of Saudi Arabia’s state-owned oil and gasoline firm pushed again in opposition to the concept the world is anyplace near peak fossil gasoline demand. 

“The fact on the bottom is that regardless of concerted effort to maneuver to alternate options, international coal consumption is at record levels … with demand nonetheless sturdy,” stated Amin Nasser, the corporate’s president and CEO, whereas accepting an industry leadership award on the convention. 

Oil consumption additionally remains strong, he stated, whereas pure gasoline has turn out to be an more and more vital “bridge gasoline.” He stated renewables nonetheless solely account for a comparatively small share of worldwide vitality consumption and new options like inexperienced hydrogen are at the moment dear.

‘The world wobbles’

Whereas alternate options like hydrogen, wind and photo voltaic are vital, Nasser stated, he warned that phasing out standard fuels too rapidly may put international vitality and safety in danger. 

“Because the latest vitality disaster has proven, compounded by the battle in Ukraine, the world wobbles if these realities are ignored or wished away, and the general public anger now we have already seen may finally derail local weather ambition and motion themselves,” he stated. 

On-stage on the convention, Darren Woods, chair and CEO of ExxonMobil, made an analogous level. 

“There appears to be considerably wishful pondering that we’re gonna flip a change and we’ll go from the place we’re at in the present day to the place we’ll be tomorrow,” he stated. “If we do not preserve some stage of funding within the trade, you find yourself operating wanting provide, which ends up in excessive costs and a number of the results that Amin referenced.”

The IEA, for its half, agrees that demand for fossil fuels will nonetheless see peaks and valleys within the years to return, and that demand will fluctuate nation by nation. Nonetheless, it predicts the period of “relentless progress” for the fossil gasoline sector is coming to an finish. 

Totally different views on oilpatch

The IEA’s projection and trade feedback on the convention in Calgary present the totally different factors of view that exist about the way forward for the oilpatch, stated John England, an vitality analyst with Deloitte International.

Oil and gasoline producers are taking totally different methods to attempt to meet the world’s rising demand for oil, whereas additionally attempting to chop emissions.

“We will not cease investing in hydrocarbons. We nonetheless must spend money on these, however whereas we’re investing in these newer energies. And so I believe it is simply looking for the steadiness,” he stated in an interview with CBC Information.

North American oil costs surged Monday to greater than $90 US per barrel, a nine-month excessive.

These costs give the trade the monetary energy to make investments to cut back emissions and spend money on low-carbon sources of vitality. Nevertheless, the sector has faced criticism from environmental teams for not utilizing sufficient of its income to make significant investments to drive down greenhouse gases.

Environmentalists unimpressed

2023 was Canada’s worst wildfire season on report, whereas record temperatures have been reached this summer time across the globe.

Environmental teams have protested outdoors the gathering.

“Now that the proof is clearer than ever that demand for fossils will peak this decade, main oil producers will do something to delay that transition,” stated Julia Levin, affiliate director of nationwide local weather at Environmental Defence Canada.

The science is obvious about what must be performed, Pure Assets Minister Jonathan Wilkinson stated throughout a speech on the convention, urging the trade to prioritize local weather change.

“As a world neighborhood we have to obtain net-zero emissions by 2050 and we have to make significant progress by 2030. We can not get to net-zero by 2050 if we start our journey in 2040.”

The World Petroleum Congress is led by WPC Vitality, which is a company of practically 65 member nations from around the globe, together with each Group of the Petroleum Exporting International locations (OPEC) and non-OPEC nations.

The occasion, which has not been held in Canada since 2000, is predicted to attract in 15,000 guests from greater than 100 nations this week.