Amin Nasser, Saudi Aramco CEO, warned that a growing emphasis on climate change was jeopardizing investments in oil and gas to the extent that it now presented a threat to the world’s energy security.
“Proponents of the popular energy transition narrative paint a picture of a Utopian world where alternatives are ready to replace oil and gas almost overnight,” he told the Saudi Capital Market Forum in Riyadh.
According to BloombergNEF research, global investments in the transition to clean energy reached $1.1 trillion in 2022, surpassing for the first time the sum invested in the production of fossil fuels.
The amount represents a 31% jump from 2021 but is still a fraction of what’s needed to slash greenhouse gas emissions by enough to avert catastrophic global warming.
The shift is nevertheless raising alarm among top-tier oil executives, who’ve rushed in recent weeks to argue that more should be invested in fossil fuels because they’ll be needed for years to come.
Read more: Middle East ESG investments are going mainstream
Nasser said mounting pressure to curb new investment in oil and gas was based on “flawed assumptions.”
“If ESG-driven policies are implemented with an automatic bias against any and all conventional energy projects, the resulting underinvestment will have serious global economic implications.”
He said the focus on Environmental, Social, and Governance criteria in investment was raising the cost of capital for oil and gas projects — now perceived to carry higher risk.
Nasser’s comments echoed those made earlier by Haitham Al-Ghais, the secretary-general of OPEC, who said the oil and gas sector was plagued by “years of chronic underinvestment” and needs an annual $500 billion to 2045.
For more on energy topics, click here.
