Oil companies have been reviled for their responsibility for global warming, but two years ago they regained their importance – suddenly indispensable – after Russia's invasion of Ukraine, which soon deprived Europeans of Russian gas. The next year saw an American triumph, with Joe Biden's massive subsidies for renewable energies attracting capital from all over the planet. This year, at the oil industry's Davos, CERAWeek in Houston, Texas, organized by S&P Global, it was time for some cruel truths about renewables. It was the usual villains who opened the discussion on Monday, March 18, Exxon CEO Darren Woods and (most notably) Saudi giant Aramco's CEO Amin Nasser.

"The current transition strategy is visibly failing on most fronts," said Nasser, lamenting the fact that his industry has been portrayed as the "arch-enemy." He went on to state some disturbing facts: global demand for oil is set to break records this year and the peak will not be reached for years to come; emissions are being reduced only marginally by renewables, despite $9.5 trillion of investment over 20 years, but by the switch from coal to gas; without subsidies, electric vehicles are 50% more expensive than conventional cars; finally, the energy transition is a growing issue for the global South.

Nasser pointed out that 85% of the population consumed 1.2 barrels of oil per year, compared with 9 in Europe and 22 in the United States. "We should abandon the fantasy of phasing out oil and gas," the Aramco chief said to applause from the global oil and gas elite.

The world is "not on the path" to cut emissions to net zero by 2050, said Exxon head Woods. "The dirty secret nobody talks about is how much all this is going to cost and who’s willing to pay for it," he said. The American giants have embarked on an acquisition race to take advantage of the remaining years of oil. Exxon is investing in shale gas in Texas (Pioneer, $60 billion), while Chevron wants to exploit deposits off the coast of Guyana (via the takeover of its compatriot Hess, $53 billion), which Exxon has taken to arbitration at the International Chamber of Commerce in Paris.

Oil industry giants are not giving up on the transition, however, with 600 investment projects worth over $200 billion in the works, according to figures from US Energy Secretary Jennifer Granholm. For the first time, electricity generated by wind and solar power is set to overtake that generated by coal.

CERAWeek participants generally praise the all-out subsidy system passed in 2022 with the Inflation Reduction Act (IRA), which does not prejudge which technologies will prove effective. "I think it's a huge mistake to be picking winners and losers and focusing on specific technologies," Woods said, adding that Europe "is very prescriptive in trying to micromanage the solutions."

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