While major international oil companies are buying into electric mobility and charging network businesses, Saudi oil giant Aramco continues to bet on oil demand in the transportation sector, investing "tens of millions of US dollars" every year to develop and support the development of vehicles with cleaner and more efficient internal combustion engines (ICEs).
"Our business is [mainly] in liquid hydrocarbon fuel, [so] we aim to make sure its environmental impact is reduced to a point where it remains competitive for internal combustion engines," South China Morning Post quoted Amer Ahmad Amer, Chief technologist at Aramco's research and development center, as saying recently at a research facility in Saudi Arabia.
Rather than betting on electrification, Saudi Aramco is doubling down on oil, looking to make gasoline and diesel engines more efficient and less polluting. The Saudi investment in internal combustion engines also comes at a time when major legacy automakers are redirecting billions of U.S. dollars into electric vehicles (EVs) to challenge Tesla.
Aramco believes that peak oil demand is nowhere in sight and that oil will continue to be the dominant source of energy in the transportation sector in the medium term. Related: Iran's 3-Part Plan To Outsmart Sanctions
"The biggest bang for us in the short to midterm until around 2040 is from improvements on the internal combustion engines until mass adoption of [sustainable pure electric] transport," Amer said, as carried by South China Morning Post.
Saudi Aramco is collaborating with the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia, in the so-called 'Clean Combustion Research Center' to work on more efficient and less polluting combustion engines.
In March this year, Aramco took part in one of the world's largest auto shows, the Geneva International Motor Show, as part of what it said was its "active efforts to improve the efficiency of energy use in the transport sector, in particular, by improving the environmental performance of internal combustion engines."
By Tsvetana Paraskova for Oilprice.com
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Comments
The second is that there will be no peak oil demand either. While an increasing number of electric vehicles (EVs) on the roads coupled with government environmental legislations could slightly decelerate the demand for oil, EVs could never replace oil in global transport throughout the 21st century and far beyond.
The third principle is that with global oil consumption exceeding 100 million barrels a day (mbd) and growing, the notion of imminent energy transition looks like an illusion.
The fourth principle is business opportunities. Rather than betting on electrification, Saudi Aramco is doubling down on oil, looking to make internal combustion engines (ICE) more efficient and less polluting.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
World instability is also a result of the acceleration of climate change. I refer to the rate of change, and that it's accelerating.
Add national oil grabs to the momentum of a changing climate, and I think it's possible that world bodies will take action against over-reliance on fossil fuel dependency. The ICE (internal combustion engine) in vehicles may be put on ice faster than we ever thought possible.