Executives from some of the world’s largest fossil fuel companies are meeting in Canada this week, united in their position that “peak oil” is not about to bankrupt them.
As the benchmark West Texas Intermediate crude oil price rises above US$90 a barrel – its highest level since November last year – world leaders and government officials are gathering in Calgary for the 24e World Petroleum Congress.
The event is one of the largest oil and natural gas conferences in the world and has not been held in Canada since 2000.
The industry is under far greater pressure today than then to take up its role in fueling climate change – the summer of 2022 was the hottest on record, according to climate scientists, and it was marked by wildfires and floods around the world. Even so, oil and gas executives remain optimistic about the future of their industry.
“Today, if you ask me, […] I will see [une production mondiale de pétrole] of about 110 million barrels per day in 2050,” Amin Nasser, the CEO of Saudi Aramco, the world’s largest oil company, said Monday during a panel discussion at the conference.
“It is growing, not declining. »
Mr Nasser’s comments come just a week after the International Energy Agency (IEA) predicted that global oil demand is expected to reach 101.8 million barrels per day by the end of 2023, fueled by by the resurgence of Chinese demand.
This – combined with Russia’s invasion of Ukraine, which has disrupted energy markets around the world – is helping to keep fossil fuel prices high. Additionally, Saudi Arabia and Russia recently agreed to extend their voluntary oil production cuts until the end of this year, leading to what the IEA calls a “substantial market deficit.”
But the IEA also predicts that demand for oil and gas will peak in 2030, as the transition to electric vehicles accelerates and countries step up efforts to limit global warming attributable to fossil fuels to 1 .5 degrees Celsius.
On Monday, Mr. Nasser argued that “peak oil” projections were based on “unrealistic expectations.”
He warned that overestimating how quickly the world can transition to cleaner energy endangers the well-being of many people, particularly in developing countries where costly solutions are not feasible.
“It is important to have a realistic timetable to achieve all these things,” Nasser said.
“Coming out of the COVID crisis, people thought that [énergies] alternatives would make it possible to meet the increase in demand. This is not the case. Prices increased significantly and impacted the entire world. »
Government assistance needed
The theme of this year’s conference is the energy transition, and companies around the world are using the conference to highlight what they are doing to reduce their emissions.
Carbon dioxide capture, storage and utilization (CSUC), in particular, is a major priority. In Canada, the New Pathways Alliance – a consortium of the country’s major oil sands companies – has proposed building a massive carbon capture and storage network in northern Alberta, at a cost of $16 $.5 billion.
Mr Nasser said CSUC, which captures harmful carbon emissions from heavy industry and stores them safely underground, would be key to bringing the world to net zero by 2050.
But Darren Woods, chief executive of US oil giant Exxon Mobil, said the fossil fuel sector would continue to need government support to help it move forward – whether in the form of incentives financial for technological development, the development of carbon markets or regulatory measures to accelerate construction projects.
“I think people underestimate the size of the global energy system and the challenge of moving from what we have today to a new energy system,” Woods said Monday in Calgary.
“We don’t have the technology today to solve this problem in an affordable way. »
Mr. Woods assured that Exxon would continue to invest in decarbonization and added that the cost of solutions such as CSUC would come down over time.
In the meantime, he said his company and others will continue to provide customers with the fossil fuel products needed to meet demand.
“There seems to be wishful thinking that we’re going to push a button today and end up where we need to be tomorrow,” Woods said.
He added that he believed the energy transition would be gradual enough that oil companies would not risk seeing the ground slip out from under their feet.
“The nature of the situation is such that you will see this [pic pétrolier] happen, long before it has a negative impact on an oil company. »