Nasser made the controversial statement while speaking at CERAWeek in Houston, Texas, US, last week. Explaining his reasoning, he firstly pointed out that despite the world investing more than $9.5tn on energy transition over the past two decades, alternatives had been unable to displace hydrocarbons at scale, with wind and solar combined currently supplying under 4% of world energy while the share of hydrocarbons in the global energy mix had barely fallen from 83% to 80%.

He also noted that there is ‘significant demand growth potential in developing countries’, where oil consumption currently ranges from less than one to just below two barrels per person per year, compared with nine barrels for the EU and 22 barrels for the US; figures that see some predicting growth through 2045. Likewise, he said gas remained a ‘mainstay of global energy’, growing by about almost 70% since the start of the century. ‘Even coal is at record highs,’ he said. ‘This is hardly the future picture some have been painting; and even they are starting to acknowledge the importance of oil and gas security.’

‘All this strengthens the view that peak oil and gas is unlikely for some time to come, let alone 2030,’ he stated.

Nasser then said that despite the contribution of alternatives to reducing greenhouse gas (GHG) emissions, much better results were achieved when the focus was on reducing emissions from hydrocarbons. ‘For example, over the past 15 years, efficiency improvements alone have helped reduce global energy demand by almost 90mn boe/d, he commented. ‘The equivalent contributions from wind and solar have substituted just 15mn barrels.’

He also warned that many alternatives in play are ‘simply unaffordable for the majority of people around the world’, citing, for example, that ‘despite its significant long-term potential, hydrogen still costs in the range of $200–400/boe, while oil and gas remain much cheaper’. He also claimed that, without subsidies, electric vehicles are ‘up to 50% more expensive than an average internal combustion engine car’.

In addition, Nasser said that the energy transition narrative would ‘be written by the Global South’, where increasing demand for energy cannot be met by expensive energy solutions. ‘Despite representing over 85% of the world’s population, they currently receive less than 5% of the investments targeting renewable energy,’ he noted.

Stating that ‘these four realities help explain the growing political and public change in sentiment around the world’, Nasser said a ‘transition strategy re-set is urgently needed’.

‘We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately, reflecting realistic demand assumptions,’ he concluded. ‘We should ramp up our efforts to reduce carbon emissions, aggressively improve efficiency, and introduce lower-carbon solutions. And we should phase in new energy sources and technologies when they are genuinely ready, economically competitive, and with the right infrastructure, adjusting all of the above as needed, as we go.’

Nasser’s sentiments regarding the energy transition were echoed by other oil and gas executives at the event, although less directly. For example, Reuters reported that Shell CEO Wael Sawan said government bureaucracy in Europe was slowing the necessary development of clean energy. Meanwhile, media reports cited ExxonMobil CEO Darren Woods as stating demand for petroleum products was ‘still very, very healthy’.

Urgent global course correction needed to meet COP28 renewables goal

Meanwhile, the International Renewable Energy Agency (IRENA) has said that an ‘urgent global course correction’ is needed in order to meet the COP28 goal of tripling renewable power capacity by 2030.  

Highlighting that 2023 set a new record in renewable deployment, adding 473 GW to the global energy mix, IRENA’s latest report suggests that the global target is ‘technically feasible and economically viable’, but its delivery depends on ‘overcoming systemic and structural barriers’ to the energy transition and will require ‘determination, policy support and investment at scale’.

Evolving policies, geopolitical shifts and declining costs have all played a role in propelling the rapid expansion of renewable energy in markets worldwide. However, to triple renewable power capacity, ‘concerted efforts are required to enhance infrastructure, policies and workforce capabilities, underpinned by increased financing and closer international cooperation’, according to IRENA.

An average of almost 1,100 GW of renewables capacity must be installed annually by 2030 – more than double the record set in 2023, suggests the report. Furthermore, annual investments in renewable power generation must surge from 570bn in 2023 to $1,550bn on average between 2024 and 2030.

Achieving the tripling target is ‘far from assured’ as an additional 7.2 TW of renewable power would need to be deployed to reach the required 11 TW by 2030. However, current projections indicate the target will remain out of reach without urgent policy intervention.  

The report goes on to note that, despite considerable renewable potential, developing countries have received disproportionately low levels of investment. Although energy transition related investments have reached a record high, exceeding $2tn in 2023, emerging markets and developing economies accounted for just over half of global investments. Some 120 developing nations attracted only 15% of global renewable investment, with Sub-Saharan Africa receiving less than 1.5%, despite being home to the highest share of energy-deprived populations. In contrast, fossil fuels received $1.3tn in subsidies in 2022, equivalent to the annual investment required in renewable generation capacity to achieve a threefold increase by 2030.  

A key aspect of IRENA’s 1.5°C scenario is that the increase in renewable energy use must be coupled with a corresponding decline in fossil fuel reliance. However, ‘both aspects are lagging’, says the Agency. ‘G20 members alone disbursed a record $1.4tn in public funds to bolster fossil fuels in 2022, directly contradicting the commitment made at COP28 to transition away from fossil fuels.’