The top executives of Exxon Mobil (NYSE:XOM) and Saudi Aramco (ARMCO) voiced support for the global transition to cleaner energy while saying oil will continue to play a major role for decades to come, in remarks Monday at the World Petroleum Congress in Calgary.
Exxon (XOM) CEO Darren Woods and Saudi Aramco (ARMCO) boss Amin Nasser both pushed back against the recent prediction from the head of the International Energy Agency that the era of fossil fuels is ending and demand will peak by 2030, saying the transition to cleaner energy to fight climate change will require continuing investment in conventional oil and gas.
“There seems to be wishful thinking that we’re going to flip a switch from where we’re at today to where it will be tomorrow,” Woods said. “No matter where demand gets to, if we don’t maintain some level of investment industry, you end up running short of supply, which leads to higher prices.”
“We need to invest,” Nasser said, “otherwise in the mid to long term, we will have another crisis and we will go backwards in terms of using more and more coal and other cheap products available today.”
Clear government policies focusing on reducing emissions are crucial, and the U.S. Inflation Reduction Act is sparking investment in energy transition supply chains, but more will be required, Woods said.
“Governments cannot afford to subsidize reduced emissions in perpetuity,” Woods told the World Petroleum Congress. “Ultimately, market forces are going to have to come into play, and we’re going to need a market for carbon reduction.”