The top oil exporter in the world, Saudi Arabia, reaffirmed Nigeria’s stance on the energy transition drive Tuesday, claiming that the existing transition plan is defective and not working.
Amin Nasser, the CEO of oil giant Saudi Aramco, specifically argued in favor of using conventional hydrocarbons in conjunction with the creation of cleaner and lower carbon resources, saying, “the problem is that we are looking at it as if we are living in a bubble. We are looking at it from a western point of view, and the rest of the world needs to adapt. No, it’s not going to work like that. One-size-fits-all does not work.”
The transition away from hydrocarbons, according to Saudi authorities, might take decades, necessitating ongoing investment in conventional resources.
Members of OPEC had advised against underinvesting in fossil fuels, particularly at a time when there is little room for output expansion and demand is still generally strong despite economic headwinds.
Yemi Osinbajo, the vice president of Nigeria, recently stated that proposals for defunding gas projects in order to compel gas-rich nations like Nigeria to switch to renewables will be avoided by a just energy transition.
According to Osinbajo, the request to forgo funding fossil fuel projects applies to both gas power plants for grid balancing and upstream coal and oil exploration.
“Also no economy in the world has been known to use renewables, solely, to industrialise. Solar power simply does not have the base load capacity yet for industry,” he said.
Fossil fuels are necessary for the economic development of developing nations like Nigeria, which have contributed a negligible contribution to global carbon emissions. In order to substitute dirtier sources like firewood when cooking, gas is crucial. For this reason, many people have objected to the idea of stopping the production of fossil fuels.
“Stopping the use of gas means that we cannot use LPG for clean cooking stoves to replace the use of kerosene, firewood, and charcoal which are dirtier fuels that are widely used for cooking and other domestic purposes, particularly in the rural areas. The use of firewood means deforestation, cutting down trees and of course desertification and then the loss of our carbon sinks,” he said.
“Double standards that wealthier countries have established on this subject,” he criticized. Following the energy crisis, numerous European countries have announced that they would increase or prolong their reliance on coal-fired power generation through 2023 and possibly beyond.
“This is in violation of their climate commitments, and analysis suggests that this will raise power sector emissions of the EU by 4O degrees – a significant amount, given the high base denominator of EU emissions,” he said.
He claimed that the present alternatives to fossil fuels and renewable energy sources are now unable to properly meet the world’s expanding energy needs. “We need to work in parallel until alternatives are ready to shoulder a bigger chunk of the growing energy demand in the future,” Nasser said, adding that if not, customers would turn back to coal due to concerns about price, availability, and energy security.
The Aramco CEO also backed carbon capture and sequestration as a method of decarbonizing existing resources, supported energy firms as a transitional solution, and acknowledged that different nations had different capacities for decarbonization.
He estimated that the current anticipated worldwide investment in fossil fuels is between $300 billion and $400 billion, which is significantly less than the $700 billion spent on upstream activities in 2014, both nominally and in real terms, due to severe inflation.
If the world wants to attain net zero CO2 emissions by 2050, no new oil and gas fields should be permitted for development past pledges made by 2021, according to the IEA’s net zero emissions 2050 scenario published in May 2021.