Saudi oil delegation at World Petroleum Congress says we're nowhere near peak fossil fuel

As hundreds of oil and gas executives and government representatives descend on Calgary for the World Petroleum Congress, a delegation from Saudi Arabia is warning of the consequences of ditching oil and preaching the need for a more realistic energy transition and more investment in oil and gas.

The country has the largest delegation at the conference of any country or company, led by Energy Minister Abdulaziz bin Salman Al Saud, who told the crowd of delegates that the sector can't solely focus on climate change.

"If we really want to be faithful to the idea that we will be transitioning, we have to also make sure that transitioning happens whereby you end up attending to energy security, ensuring that energy is still affordable, and does not act as an impediment to economic prosperity and growth," he said while onstage.

 "And if you don't do all of the above, I'm sorry, but I don't think you could attend to climate change issues."

Net zero?

The pitch by the Saudi delegation runs somewhat counter to the net-zero theme of this year's World Petroleum Congress, though it's shared by many in attendance. Alberta Premier Danielle Smith made similar comments this week, along with the head of ExxonMobil, one of the world's largest publicly traded international oil and gas companies.

But outside the walls of the World Petroleum Congress there's pushback to this narrative. A recent, bombshell op-ed from the International Energy Agency (IEA) suggests peak demand for fossil fuels will happen within the next decade and that, while timelines vary, oil, gas and coal are all on their way out.

The two perspectives exemplify the fundamental debate that surrounds the oil and gas industry, as some governments and environmental groups pressure companies to move faster on climate change — especially given their record profits — while executives and some politicians caution the road to net-zero is a slow, windy path without a clear road map.

Just days before the World Petroleum Congress kicked off, the IEA warned how the world's appetite for oil and other fossil fuels may peak before the end of this decade.

It's the first time the global energy watchdog has predicted peak fossil fuels will arrive so soon.

Fatih Birol, the IEA's head, wrote in the Financial Times last week that the projections would show that "the world is on the cusp of a historic turning point."

"Peaks for the three fossil fuels are a welcome sight, showing that the shift to cleaner and more secure energy systems is speeding up and that efforts to avoid the worst effects of climate change are making headway," he wrote.

Still, Birol warned the IEA's forecast downturn is nowhere near steep enough to put the world on a path to limiting temperature rises to 1.5 C above pre-industrialized levels, which is considered important to avoiding a climate catastrophe.

But speaking to conference delegates Monday, the president and CEO of Saudi Arabia's state-owned oil and gas company pushed back against the idea that the world is anywhere close to peak fossil fuel demand. 

"The reality on the ground is that despite concerted effort to move to alternatives, global coal consumption is at record levels … with demand still robust," said Amin Nasser, the company's president and CEO, while accepting an industry leadership award at the conference. 

Oil consumption also remains strong, he said, while natural gas has become an increasingly important "bridge fuel." He said renewables still only account for a relatively small share of global energy consumption and new solutions like green hydrogen are currently pricey.

'The world wobbles'

While alternatives like hydrogen, wind and solar are important, Nasser said, he warned that phasing out conventional fuels too quickly could put global energy and security at risk. 

"As the recent energy crisis has shown, compounded by the conflict in Ukraine, the world wobbles if these realities are ignored or wished away, and the public anger we have already seen could ultimately derail climate ambition and action themselves," he said. 

On-stage at the conference, Darren Woods, chair and CEO of ExxonMobil, made a similar point. 

"There seems to be somewhat wishful thinking that we're gonna flip a switch and we'll go from where we're at today to where we'll be tomorrow," he said. "If we don't maintain some level of investment in the industry, you end up running short of supply, which leads to high prices and some of the effects that Amin referenced."

The IEA, for its part, agrees that demand for fossil fuels will still see peaks and valleys in the years to come, and that demand will vary country by country. Still, it predicts the era of "relentless growth" for the fossil fuel sector is coming to an end. 

Different perspectives on oilpatch

The IEA's projection and industry comments at the conference in Calgary show the different points of view that exist about the future of the oilpatch, said John England, an energy analyst with Deloitte Global.

Oil and gas producers are taking different strategies to try to meet the world's growing demand for oil, while also trying to cut emissions.

"We can't stop investing in hydrocarbons. We still need to invest in those, but while we're investing in these newer energies. And so I think it's just trying to find the balance," he said in an interview with CBC News.

North American oil prices surged Monday to more than $90 US per barrel, a nine-month high.

Those prices give the industry the financial strength to make investments to reduce emissions and invest in low-carbon sources of energy. However, the sector has faced criticism from environmental groups for not using enough of its profits to make meaningful investments to drive down greenhouse gases.

Environmentalists unimpressed

2023 was Canada's worst wildfire season on record, while record temperatures were reached this summer around the globe.

Environmental groups have protested outside the gathering.

"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.

The science is clear about what needs to be done, Natural Resources Minister Jonathan Wilkinson said during a speech at the conference, urging the industry to prioritize climate change.

"As a global community we need to achieve net-zero emissions by 2050 and we need to make meaningful progress by 2030. We cannot get to net-zero by 2050 if we begin our journey in 2040."

The World Petroleum Congress is led by WPC Energy, which is an organization of nearly 65 member countries from around the world, including both Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries.

The event, which has not been held in Canada since 2000, is expected to draw in 15,000 visitors from more than 100 countries this week.