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Abandoning new oil and gas risks social unrest, warns Aramco chief

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 Saudi Aramco's Wasit Gas Plant - Reuters
Saudi Aramco's Wasit Gas Plant - Reuters

Global leaders risk unleashing social unrest unless they keep investing in fossil fuels, the boss of Saudi Arabia’s state-owned oil company has warned.

Amin Nasser said attempting to switch to renewable energy “virtually overnight” would lead to soaring prices and erode public support for the changes.

“I understand that publicly admitting that oil and gas will play an essential and significant role during the transition and beyond will be hard for some,” he told an industry conference in Texas.

“But admitting this reality will be far easier than dealing with energy insecurity, rampant inflation and social unrest as the prices become intolerably high, and seeing net-zero commitments by countries start to unravel. The world is facing an ever more chaotic energy transition centred on highly unrealistic scenarios and assumptions about the future of energy.”

Mr Nasser is chief executive of Saudi Aramco, the world’s largest oil producer.

Saudi Arabia relies heavily on hydrocarbon exports and has pledged to become carbon neutral by 2060. However, it cannot do so without continuing to pump out millions of barrels of oil for decades to come.

The comments come amid mounting pressure on energy giants to cut investment in new oil and gas projects and shift cash towards greener technology.

World leaders have agreed that nations must reduce their carbon emissions by burning less fossil fuels to stop global temperatures rising by more than 1.5 to 2 degrees Celsius.

The International Energy Agency has said all investments in new oil and gas projects must stop for the world to reach “net zero” carbon emissions by 2050.

Industry executives argue that natural gas in particular will still be a key fuel during the transition to green energy, although that argument has faced vocal opposition.

Last week Shell pulled out of the Cambo oil field project, west of the Shetlands, following a high profile campaign by environmental activists.

The move came despite Ben van Beurden, Shell’s chief executive, having previously argued that abandoning the project would only increase Britain’s reliance on oil imports.

“If the Government of the UK wants to supply at least part of its energy needs with domestic resources then it should develop projects like Cambo,” he said in October.

“If you say... we don’t want any part of that, let us just import it from elsewhere, how does that make sense?”

Bernard Looney, chief executive of BP, echoed the same concerns when he warned last month against “prematurely” halting oil and gas projects.

"If you take away supply and demand does not change, the only thing that happens is prices go up”, he said.

Friends of the Earth have argued for the end of North Sea projects as well as all new fossil fuel extraction.

Connor Schwartz of the climate campaign group, said last week: “There is no future in them. Carrying on risks more than just balance sheets, it makes the path to 1.5C even harder.”

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