The CEOs of top Saudi Arabian and U.S. oil producers Aramco and Exxon Mobil on Monday pushed back against forecasts that oil demand will peak, and said the transition to cleaner energy to fight climate change would require continuing investment in conventional oil and gas.
Their comments come after the head of the International Energy Agency (IEA) last week said that the world’s energy watchdog’s new estimates showed the age of relentless fossil fuel growth is ending and demand would peak by 2030.
Speaking at the World Petroleum Congress in Calgary, Aramco CEO Amin Nasser said talk of peak oil demand had come up often before.
“This notion is wilting under scrutiny because it is mostly being driven by policies, rather than the proven combination of markets, competitive economics and technology,” Nasser said.
He said he expected demand to grow to around 110 million barrels per day (bpd) by 2030. Current demand is around 100 million bpd.
The Organization of the Petroleum Exporting Countries, which has also dismissed the IEA peak oil estimate, is more upbeat about demand, expecting growth of 2.44 million bpd this year to 102.1 million bpd, compared with the IEA’s forecast of 2.2 million bpd of growth.
At the Congress, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, critized the IEA, saying its role had drifted.
“They have moved from being a forecaster and assessor of the market to one practicing political advocacy,” Prince Abdulaziz said.
An IEA spokesperson could not be immediately reached.
Environmental groups have protested this week outside the annual gathering of oil producing companies and countries. This year’s conference theme is the energy transition.
“Now that the evidence is clearer than ever that demand for fossils will peak this decade, major oil producers will do anything to delay that transition,” said Julia Levin, associate director of national climate at Environmental Defence Canada.
Nasser said the narrative of the current energy transition was based on “unrealistic” assumptions and scenarios and it was important to keep investing in oil and gas to ensure global energy security and an affordable transition to cleaner sources.
“We need to invest, otherwise in the mid- to long-term we will have another crisis and we will go backward in terms of using more and more coal and other cheap products that are available today.”
Exxon CEO Darren Woods, speaking on the same panel with Nasser, said it will be difficult to replace today’s energy system because oil and gas are so widely available, and the transition would take time.
“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 shorter supply which leads to higher prices.”
(Reporting by Nia Williams and Rod Nickel; Editing by Christina Fincher and Marguerita Choy)