Saudi Aramco CEO warns of social unrest if new investment in fossil fuels ends too quickly

Amin Nasser, the chief executive of Saudi Aramco, the world’s biggest oil producer, urged global leaders on Monday to continue investing in planet-warming fossil fuels in the years ahead, arguing that the assumption the world could transition to clean energy “overnight” was “deeply flawed.”

Nasser, during remarks at the World Petroleum Congress in Houston, Texas, claimed that transitioning to cleaner fuels too rapidly could prompt uncontrolled inflation and social unrest, and ultimately upend nations’ emissions targets to curb carbon pollution.

“I understand that publicly admitting that oil and gas will play an essential and significant role during the transition and beyond will be hard for some,” Nasser said during the conference, which has focused on low-carbon strategies and technology.

“But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high, and seeing net-zero commitments by countries start to unravel,” he continued.

Nasser’s remarks come amid mounting pressure on the oil and gas industry to limit exploration and production of fossil fuels and shift to renewable power development, as countries set new carbon emissions reduction targets to battle climate change.

The International Energy Agency in May warned that investments in new oil and gas projects must immediately stop in order for the world to achieve net-zero emissions by 2050 and avoid the worst consequences of climate change.

Keeping global temperatures from surpassing 1.5 degrees Celsius of warming will require the world to slash greenhouse gas emissions nearly in half within the next decade and reach net-zero emissions by 2050, according to the Intergovernmental Panel on Climate Change. The Earth has already warmed about 1.1 degrees Celsius above pre-industrial levels and is set to see a temperature rise of 2.4 degrees Celsius by 2100.

But other world energy leaders at the conference, including the chief executives of Exxon and Chevron, also argued that demand for oil and gas will remain high in upcoming years despite efforts to transition to a clean energy economy.

“Oil and gas continue to play a central role in meeting the world’s energy needs, and we play an essential role in delivering them in a lower carbon way,” Chevron CEO Mike Wirth said at the conference. “Our products make the world run.”

Exxon on Monday unveiled plans to reach net-zero emissions from its operations in oil and gas fields in West Texas and New Mexico by 2030 as part of an effort to curb emissions across its business. During the conference, the company’s CEO Darren Woods stressed the continued need for fossil fuels amid the clean energy transition.

“The fact remains, under most credible scenarios, including net-zero pathways, oil and natural gas will continue to play a significant role in meeting society’s need,” Woods said.

Worldwide demand for fossil fuels rebounded sharply this year as world economies recovered from the coronavirus pandemic. And global carbon emissions from burning fossil fuels is forecast to rise to 36.4 billion tons this year compared with 2020, marking an increase of 4.9%.

President Joe Biden last month announced that the U.S., in coordination with China, India, Japan, South Korea and the United Kingdom, will tap the Strategic Petroleum Reserve and release 50 million barrels in an effort to calm this year′s rapid rise in fuel prices.

“While there may be pushback on my remarks today, I know that if we do not speak out as an industry, no one else will on our behalf,” Nasser said.