Warning about the lack of investments in the oil & gas sector, Saudi Aramco CEO Amin Nasser said taxing oil companies and capping energy bills are not solutions to the global energy crisis.
Speaking at a forum in Switzerland, Nasser said underinvestment in the hydrocarbons sector when alternatives to fossil fuels were still not readily available was among the root causes of the global energy crisis. “Freezing or capping energy bills might help consumers in the short term, but it does not address the real causes and isn’t the long-term solution,” said the Saudi Aramco CEO.
After a third of the natural gas supplies were cut off earlier this month, the energy crisis in Europe has reached critical levels. To address this growing catastrophe that is pushing up inflation, forcing companies to halt output, and raising prices ahead of winter, European governments have been heavily investing hundreds of billions of euros in tax cuts, handouts, and subsidies.
According to the EU’s recently unveiled plans, excess profits from energy corporations would be redistributed to lower consumer costs. Nasser claimed that the crisis was mostly caused by underinvestment in hydrocarbons and that Europe’s plans to tax energy corporations and cap consumer energy bills were neither long-term nor practical responses.
“The conflict in Ukraine has certainly intensified the effects of the energy crisis, but it is not the root cause. Sadly, even if the conflict stopped today as we all wish, the crisis would not end,” he said. He contended that the world needs a more practical energy transition strategy rather than changing climate goals.
Aramco is hopeful of increasing the oil production in the kingdom to 13 million barrels per day by 2027, but Nasser cautioned that current hydrocarbon investments worldwide are “too little, too late, and too short-term.” The oil company has increased efforts to boost carbon capture technology while lowering its upstream carbon intensity, gas flaring, and methane intensity.
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