Getting rid of oil and gas is "far-fetched and unrealistic," Saudi Energy Minister, Prince Abdulaziz bin Salman, said on Monday, adding that companies and governments should be thinking about how to reduce emissions from fossil fuels instead.
"Let's not focus on the fuel of choice but rather how we can mitigate and adapt to these realities without showing any preferences," Prince Abdulaziz bin Salman said at the Singapore Energy Summit, as carried by Reuters.
Saudi Arabia and its oil giant Aramco continue to say that peak oil demand is still nowhere in sight and that the world will need oil and gas for the foreseeable future, regardless of estimates by analysts and even OPEC that global oil demand will start to plateau and decline at some point in the late 2030s.
Aramco doesn't fear peak oil demand as it doubles down on boosting oil production in the long term to beat its competitors, many of which are pledging significant investments in low-carbon energy.
In a statement to Reuters earlier this month, Aramco said:
"We expect oil demand growth to continue in the long term, driven by rising populations and economic growth. Fuels and petrochemicals will support demand growth ... speculation about an imminent peak in oil demand is simply not consistent with the realities of oil consumption."
Globally, we may have passed peak oil demand last year, as fuel consumption may never recover from the pandemic-inflicted decline, BP said in its annual outlook last month.
Aramco, however, has been dismissing for years the notion of peak oil demand, especially forecasts that it could occur before 2040.
At the beginning of 2020, before COVID-19 upended all forecasts, Aramco's chairman Yasir Al-Rumayyan said that energy transitions "take decades, even centuries" to complete, and the industry should continue to think in decades.
Speaking at the Singapore forum today, Prince Abdulaziz bin Salman said that the current number-one fear on the global market was the second wave of coronavirus cases in the world.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
Comments
Environmental activists and divestment campaigners have been for years subjecting oil to a sustained campaign and exerting intensive pressure on oil majors and investment banks to mislead the world into believing that peak oil demand has already been reached. They used the decline in global oil demand as result of the COVID-19 pandemic as evidence that peak oil demand is already with us. Nothing is further from the truth. They are deluding themselves in wishful thinking and fantasy.
There will neither be a post-oil era nor a peak oil demand throughout the 21st century and probably far beyond. Furthermore, the notions of an imminent global energy transition and zero emissions are mirages.
Oil and gas will continue to be the drivers of the global economy well into the future. European oil majors and investment banks who are coming under intense pressure to agree that peak oil demand is nigh or has been reached are merely burnishing their environmental credentials. They will all be back to the embrace of oil and gas once oil prices start to surge again and surge they will once the pandemic is controlled or anti-COVID vaccines have been made available.
Global transport and the global petrochemical industry will continue to lead the demand for oil and gas well into the future. Between them, they account for 87% of global oil consumption. This percentage can only go up with growing world population and economic growth.
Electric vehicles (EVs) will never ever prevail over the internal combustion engines (ICEs). Is it not telling that despite all the daily media hype, the generous governments’ subsidies and the environmental legislations, EVs number less than 4 million out of some 1.5 bn ICEs.
Even a battery with a million-mile lifespan can’t overcome one of the key hurdles to mass adoption of EVs in the United States and elsewhere—the insufficient public charging infrastructure.
The EV revolution is not only about car performance, choice availability, or price parity with ICE. It also hinges on easy access to charging infrastructure to allay customer fears that they could be left stranded without battery power and without a charging point nearby.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London