Top oil executives took to the stage of a major energy conference on Monday to vocally oppose calls for a quick move away from fossil fuels, saying society would pay a steep cost to replace oil and gas.
Big oil companies including BP and Equinor have written down renewable energy projects and others have been forced to push back their greenhouse gas reduction targets due to greater uncertainties with the transition to clean fuels.
That and unexpected strong demand for oil has stiffened the industry's opposition to government and activist demands to phase out fossil fuel development. Policymakers also have shifted their focus to energy supply security and affordability since Russia invaded Ukraine and during the latest conflict in the Middle East.
"We should abandon the fantasy of phasing out oil and gas, and instead invest in them adequately" to reflect demand, Amin Nasser, CEO of Saudi Aramco, the world's largest oil producer, said to applause.
Despite the growth of electric vehicles, solar and wind power, oil demand this year will reach a new record of 104 million barrels per day this year, Nasser said.
Alternative energy has yet to show it can displace hydrocarbons at current requirements or prices, Nasser added. He rejected the International Energy Agency forecast of peak oil demand in 2030.
Other oil CEOs echoed his view, with Shell's Wael Sawan pointing to government bureaucracy in Europe as slowing needed development. Petrobras CEO Jean Paul Prates said caution should overrule haste. Exxon Mobil CEO Darren Woods also said regulations governing clean fuels have still not been resolved.
"If we rush or if things go the wrong way, we’ll have a crisis that we will never forget,” said Prates.
"You're hearing some very pragmatic views up here," said Meg O'Neill, CEO of Woodside Energy, who rejected what she called simplistic views that the transition to cleaner fuels can "happen at an unrealistic pace."
Public debate over the transition and its cost has become increasingly divisive in many countries.
"It has become emotional. And when things are emotional, it becomes more difficult to have a pragmatic conversation," O'Neill said.
It could take 20 to 40 years to build the market for and test some new clean-fuel technologies, O'Neill said.
U.S. Energy Secretary Jennifer Granholm pushed back at oil industry views on renewable fuels.
"That is one opinion," she said of Nasser's prediction of continuing long-term demand for fossil fuels. "There have been other studies that suggest the opposite that oil and gas demand and fossil demand will peak by 2030."
She called the transition to clean fuels "an undeniable, inevitable and necessary realignment of the world's energy system." She added that the world will need fossil fuels well into the future, and said technologies that remove carbon "are ways that we can keep the lights on and continue to press for clean energy solutions."
Exxon's Woods, whose company spent $4.9 billion on a carbon sequestration company, raised concerns about building a business around hydrogen and carbon capture and storage.
He said in remarks at the conference he is not confident that carbon capture and storage will "necessarily come to the right solution" because of its current high costs and lack of market incentives.
On the use of hydrogen as a fuel, "the challenge has been translating the legislation of the IRA (Inflation Reduction Act) into regulation," Woods said.
"There isn't a lot of incentives" to drive low-carbon hydrogen fuel projects, he said, referring to hydrogen derived from natural-gas.
(Reuters - Reporting by Arathy Somasekhar, Marianna Parraga and Sabrina Valle; writing by Gary McWilliams; Editing by David Gregorio)