Chief executives of the some of the world’s biggest fossil fuel companies are meeting in Canada this week, united in their stance that “peak oil” isn’t about to put them out of business any time soon.
Against the backdrop of benchmark prices for West Texas Intermediate crude topping US$90 per barrel, the highest since November of last year, executives and government officials from around the world are gathering in Calgary for the 24th World Petroleum Congress.
The event is one of the largest oil-and-gas conferences in the world, and has not been held in Canada since 2000.
While the industry is under far greater pressure now than it was then to address its role in fuelling climate change – 2022 was the hottest summer on record, according to climate scientists, and marred by wildfires and floods around the world – oil-and-gas leaders remain bullish on the future of their industry.
“Today if you ask me … I would see around 110 million barrels per day (of global oil production) in 2050,” said Amin Nasser, the CEO of Saudi Aramco, the world’s largest oil company, at a panel discussion during the conference Monday.
“It is growing, not declining.”
Nasser’s comments come just a week after the International Energy Agency predicted that world oil demand is forecast to grow to 101.8 million barrels per day by the end of this year, driven by resurgent Chinese demand.
That, combined with Russia’s invasion of Ukraine, which has disrupted energy markets worldwide is helping to keep fossil fuel prices high. In addition, Saudi Arabia and Russia recently agreed to extend their voluntary oil production cuts through the end of this year, leading to what the IEA calls a “substantial market deficit.”
But the IEA also predicted that demand for oil and gas will peak in 2030, as the transition to electric vehicles accelerates and countries intensify their efforts to restrict fossil-fuel driven climate change to 1.5 degrees Celsius of warming.
On Monday, Nasser said projections of “peak oil” are based on “unrealistic expectations.”
He warned that overestimating how quickly the world can transition to cleaner energy puts the welfare of many at risk, particularly in developing nations where expensive solutions aren’t feasible.
“A realistic time frame to achieve all of these things is important,” Nasser said.
“As we came out of COVID-19, people thought (energy) alternatives would fill the rise in demand. It didn’t. Prices went up significantly and impacted the whole globe.”
The theme of this year’s congress is the energy transition, and companies around the globe are using the conference to highlight what they’re doing to reduce emissions.
Carbon capture, usage and storage (CCUS) in particular is a major focus. In Canada, the Pathways Alliance – a consortium of the country’s major oil sands companies – have proposed building a massive carbon capture and storage network in northern Alberta at a cost of $16.5 billion.
Nasser said CCUS, which takes harmful carbon emissions from heavy industry and stores them safely underground, will be key to getting the world to net-zero by 2050.
But Darren Woods, CEO of U.S. oil giant Exxon Mobil XOM-N, said the fossil fuel sector will continue to need government support to help it move the needle – whether that’s in the form of financial incentives for technology development, the development of carbon markets, or regulatory improvements to fast-track project construction.
“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 in Calgary on Monday.
“We don’t have the technology today to solve this problem in an affordable way.”
Woods said Exxon will continue to invest in decarbonization, and added the cost of solutions such as CCUS will come down over time.
In the meantime, he said his company and others will continue to provide customers with the fossil fuel products necessary to meet demand.
“There seems to be somewhat of this wishful thinking that we’ll flip a switch today and go to where we need to be tomorrow,” Woods said.
He added he believes the energy transition is going to be gradual enough that oil companies are not in danger of having the bottom fall out from under them.
“The nature of this is such that you will see this (peak oil) coming, long before it negatively impacts any oil company.”