Oil executives say phase-out ‘fantasy’ amid record profits
HOUSTON — When nations struck a historic deal to phase out fossil fuels last fall, then-U.S. climate envoy John Kerry was elated.
“We are moving away from fossil fuels — and we are not turning back,” Kerry declared at the U.N. Climate Change Conference in Dubai.
But three months later, it appears that some of the world’s biggest oil and gas companies did not get the memo. At an energy conference here this week, their leaders struck a much different tone, predicting fossil fuels will continue to power the global economy well into the future.
“We should abandon the fantasy of phasing out oil and gas,” Amin Nasser, president and CEO of Saudi Aramco, said to applause at CERAWeek by S&P Global.
Shell CEO Wael Sawan declared “there is going to be a multidimensional energy system in the future, [and] oil and gas will continue to have an important role in stabilizing that system for a long, long, long time to come.”
And Patrick Pouyanné, CEO of the French energy giant TotalEnergies, said he was “quite pleased” the Dubai deal recognized “that we need some transition fuels, and gas is one of them.”
It’s hardly surprising oil industry executives would see a continued role for their products, even as the world shifts to cleaner fuels to fight climate change. But their remarks underscored an uncomfortable reality for climate advocates and policymakers globally: Demand for oil just keeps on rising, delaying the end of the fossil fuel era.
The industry executives’ pronouncements are backed up by record oil-and-gas production and consumer misgivings over purchasing electric vehicles. At the same time, utilities are rushing to line up more natural gas to meet explosive power demand fueled by electricity-hungry data centers.
President Joe Biden’s top climate officials face another uncomfortable fact: The United States is now pumping more oil than any other country in history. U.S. crude oil production averaged 12.9 million barrels per day in 2023, breaking the previous record of 12.3 million barrels per day set in 2019.
Big Oil and its investors are reaping the rewards. ExxonMobil and Chevron, the largest U.S. energy companies, reported their biggest annual profits in a decade last year. Exxon reported $36 billion in earnings, while Chevron netted $21.4 billion.
Nasser projected global oil demand will reach a new record of 104 million barrels per day this year, despite the growth of electric vehicles and wind and solar energy. He rejected the International Energy Agency’s forecast oil consumption will peak in 2030.
Two top Biden administration officials pushed back on Nasser’s prediction.
“That is one opinion,” Energy Secretary Jennifer Granholm told attendees at CERAWeek. “There have been other studies that suggest the opposite, that oil-and-gas demand and fossil demand will peak by 2030.”
John D. Podesta, a senior adviser to Biden on international climate policy, told reporters Nasser “said he thought the estimates of demand from the IEA and others were off. We don’t think so. We think there’s a high demand for electrification.”
Not everyone sees a conflict between the rhetoric in Dubai and Houston. Sultan Al Jaber, the oil executive who served as president of last year’s U.N. climate summit, said there has been broad recognition in both venues the world cannot quit fossil fuels overnight.
“We are facing over 260 million barrels of oil, gas and coal consumed every day,” Al Jaber said in a virtual address to CERAWeek. “There is just no avoiding that the energy transition will take time.”
Greg Ebel, CEO of the pipeline company Enbridge, said in an interview he thinks the attitudes in Dubai and Houston have been “consistent.” But he called the former “idealistic” and the latter “realistic.”
The deal in Dubai specifically called for the world to “transition away from fossil fuels in energy systems” so as to achieve net-zero emissions by 2050. But David Victor, a professor of public policy at the University of California at San Diego who studies international climate policy, said the deal left unresolved some key details.
“It’s about transitioning away from fossil fuels, and everyone knows that, but they don’t know the schedule,” Victor said. “And they don’t know who’s going to do the transition. Is it going to be the oil companies? Is it going to be other companies? Those are the real questions, and none of that got resolved.”