Saudi Aramco calls for prioritising needs of global south in energy transition planning given demand, consumption trends
- Some 80 per cent of the world’s energy output goes to the global south and this is expected to rise to 90 per cent by 2050, CEO Nasser says
- ‘You need to have a transition that takes [into account] the economic maturity of different countries and a multi-speed transition’
As the net-zero commitments by 2050 are approaching, an effective energy transition process is required to resolve key issues like affordability, security and sustainability, CEO Amin H. Nasser said at the Future Investment Initiative conference in Riyadh on Tuesday.
Some 80 per cent of the world’s energy output goes to the global south and this is expected to rise to 90 per cent by 2050, he said. Energy users will increase by 2 billion, with 98 per cent of this projected to come from the global south, he added.
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“I think the one-size-fits-all approach [on energy transition] is not acceptable,” Nasser said. “You need to have a transition that takes [into account] the economic maturity of different countries and a multi-speed transition.”
The “global south” is a term referring to underdeveloped and developing countries in the regions of Africa, Latin America and the Caribbean and Asia, as opposed to the rich, industrialised nations.
Talking about a realistic transition, Nasser said demand growth is the key, given that the global economy can become stronger in the next two years. Particularly, economic growth in China will help boost energy demand due to the greater pursuit of different lifestyles.
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“You need to make sure that you have adequate, reliable, available and affordable sources of energy,” Nasser said during a plenary session about rebalancing the global energy equation. “If it’s not affordable for [the people in the global south], they will go to what is affordable.”
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Patrick Pouyanne, chairman and CEO at TotalEnergies, a Paris-based multi-energy producer and distributor, said a realistic approach for the energy transition should be “rolling forward to 2040”, a position adopted by the International Energy Agency that pinpoints peak demand for oil, gas and coal in 2030.
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“We still need US$5 trillion [of investment] a year in renewables,” he said at the same Riyadh conference. The key issue is “we can make the transition because scientists clearly told us. So we are right at the science, we are not led to contest the science”.
In the context of an “achievable” energy transition, Saudi Aramco’s Nasser said that the oil producer is investing in new renewable energy sources. It is also looking at the potential of “blue hydrogen” which is produced mainly from natural gas, using a process called steam reforming.
“We are waiting for the demand,” Nasser added. “Everybody talks about hydrogen but you know it costs much more than normal sources of energy. So when you go to buyers today, it will be very difficult for them to sign an offtake [agreement] to start a project.”
