On Monday, March 18, Saudi Aramco CEO Amin Nasser made a statement that the energy transition has failed and that politicians must accept this fact, which is obvious to everyone.
“We need to put aside the ‘fantasy’ of phasing out oil and gas, as demand for fossil fuels is expected to grow in the coming years. We should invest in them,” Nasser said.
The CEO of Saudi Aramco also recalled that in the last twenty years more than 9.5 trillion dollars have been invested in alternative energy sources, but they have not been able to replace hydrocarbons. Wind and solar energy represent only 4% of the total, and the percentage of electric vehicles used is around 3%. Furthermore, as Nasser noted, demand from the global community has increased by 100 million barrels per day since the beginning of the 21st century.
“In the coming years, including this one, oil and gas consumption will grow, according to most experts, including foreign ones. In 2024, the demand for “black gold” in the world may increase by 1.2 million barrels per day,” he said. he said in a conversation with RG, investment strategist of Arikapital Management Company, associate professor of the Financial University of the Government of the Russian Federation Sergei Suverov. As the main reasons he cited the growth of the world population and the active economic dynamics in several developing countries, mainly Asian. “In addition, the situation is affected by the lack of investment in mining projects due to the passion for green energy, which negatively affects the supply of energy resources,” Suverov added.
Associate Professor of the Department of Political Analysis and Socio-Psychological Processes of the Russian University of Economics. GV Plekhanov Pavel Sevostyanov, for his part, recalled that in 2023 around 1.7 trillion dollars will be invested in environmentally friendly energy (wind and solar), as well as in electric vehicles, and only around 1 trillion in Great In Brittany, a third of energy is already generated from wind, sun and water, the expert noted. He also noted that China is leading the way, investing $546 billion in clean energy in 2022.
“Previously, technologies that allowed obtaining energy from alternative sources were considered niche and therefore unreliable. But everything has changed. Since 2009, the cost of clean energy has fallen by 82%, the cost of wind energy has dropped by 50%, and the cost of lithium-ion batteries by 97%. Today, clean energy represents a total of 12% of the world’s energy,” said Sevostyanov.
Fossil fuels still dominate, but the amount of clean energy is growing exponentially. In this case, according to the expert, what is important for the analysis is not VIA’s total participation in the energy balance, but rather the growth dynamics in the commissioning of new VIA capacities. And these figures are impressive, says Sevostyanov, even though the energy transition is only 7% complete. This figure is calculated based on the amounts already invested in the energy transition of the total amount of planned investments. It is already clear that the estimated date (2050 – editor’s note) is quite arbitrary; After all, changes can happen sooner or later. This depends on the emergence of additional energy demand.
“That is, in this sense, the CEO of Saudi Aramco is right: the need for oil will not disappear for several decades. And the need for volumes, for example, of Russian oil, will also remain. However, the situation general The structure of the energy balance will change. For example, in 2024, wind and solar energy together will generate more electricity than hydroelectricity. And by 2027, renewable energy sources will account for more than 35% of global electricity production, and proportion of wind and solar energy will increase to 27%,” explained the expert. Sevostyanov noted that the main problem that prevents these figures from being even more significant is that energy networks are not fully prepared and need to be modified to accommodate new energy sources. And this takes time.
According to Dmitry Scriabin, portfolio manager at Alfa Capital, in the coming years the global economy will enter a phase of strong recovery, mainly due to the end of the monetary policy tightening cycle by the Central Bank of the EU and the United States. . To do this, you will need energy resources, those that already exist, from fields that do not require investments from scratch. In this sense, it is fair to say that the demand for oil and gas will grow in the foreseeable future.
“The world economy will again address the issue of the energy transition when it stops actively fighting crises and recovers firmly. Then this will be relevant. The energy transition requires large-scale investments, experience, technology and time. At this moment , the components for this are not enough,” says Scriabin.
In the future, according to experts interviewed by RG, traditional and alternative energy mechanisms will be able to coexist. This will leave the world with more options, which is a good thing.
