Hello everybody. Now you've done the poll, now we're going to actually talk about the future of energy and energy transition. And I'm going to begin the discussion with Amin Nasser who of course is the President and CEO of Saudi Aramco. Amin, welcome.
Amin, I'd like to take you back in time, not back to 1980 when you joined Aramco, but only take you back one week. A week ago you gave a very important and impactful speech in Singapore in which you said current transition planning for the energy transition does not take into account the needs of Asia and the Global South. What did you mean by that?
You know, just to explain what's currently happening, you know, we are as Saudi Aramco and as a Kingdom, we are investing big time in renewable and hydrogen and carbon capture and storage. So we are for the transition, but at the same time we are making sure that we are growing our oil and gas activities and petrochemicals. So if you look at our emissions and methane and CO2, it is the lowest. So we are not really against the transition, actually we are for the transition, especially with the Kingdom Green Initiative and all of that.
The issue that we are seeing between the Global North and the Global South is that in the Global South they are using today one-tenth of the energy compared to the Global North per individual. Basically if you look at it, it's 22 barrels per individual in the US, it's nine in Europe, it's only 1.4 barrel per individual in India, and it's one barrel in Africa. At the end of the day, cost matters. And we can see when you want to have a transition that is acceptable to all, especially where the growth in population and GDP is mainly in the Global South, you need something affordable. The average per capita income in the Global South, you're talking about $6,600 to $9,600 compared to $63,000 to $68,000. So you need an energy transition that is affordable, secure, and at the same time sustainable.
We are seeing today in the Global South the issues that they are raising in terms of affordability is of a high concern, and they need a just and inclusive transition that takes into consideration their needs and requirements.
So when you say a different thinking, how does the thinking need to change?
I think what you need to do is to transition by focusing first on reducing the emission from existing energy sources. We talked about coal phasing out, coal increased last year by 2 million barrels of oil equivalent. We are at record level in oil, at record level in coal, and at record level in gas. So while we are not achieving our target of reducing coal and it is continually increasing, we need to focus on reducing emissions. We achieved through efficiency improvement 90 million barrels over the last 15 years, 90 million barrels reduction of oil equivalent compared to 15 million barrels of oil equivalent that was added by solar and wind.
So let me, in the speech you used the phrase a multi-dimensional energy transition. What is that?
Well, you need to take the economic maturity of every country, their needs and their requirement, and then transition. It will always depend on their economic maturity and what they can afford. At the end of the day, if we need to help them in terms of making sure they don't go to coal, biomass, and more use of other sources that are not clean, we need to extend support by developed countries and others to the Global South for them to be able to transition. Because if I look at the cost today in the Global North, for power, for energy, if you look at Europe or the West in general, you see the cost of power is increasing. What was promised when the whole issue of transitions came, that it will create jobs and it will reduce the energy cost, well what we are seeing is the energy cost where you are transitioning more is increasing and the creation of jobs is not happening. So you need to reduce the cost and you need to show the rest of the world that the cost is decreasing, not increasing because of the transition.
So you've mentioned emissions, obviously that's a big focus for Saudi Aramco. CCUS, what are the focus for you in terms of managing emissions?
Well, we're building one of the biggest projects at 9 million tons by end of 2027, early 2028. And basically we have been working on for a number of years to identify the aquifers that will create the hub that would be required to facilitate not only the 9 million ton but other emissions, CO2 that might come from the rest of the industries in the Kingdom. So we are creating a hub that will cater not only for Aramco but for the rest of the Kingdom. And we identified the aquifer, the storage capacity through exploration and drilling the boreholes that will be sufficient to satisfy the Kingdom requirement by 2060.
So where do you think you are in terms of turning CCUS into a commercial business?
Well, CCUS today without incentive is a cost. So at the end of the day, companies to achieve their net zero, we're doing it, it's a cost for us. We're getting some support from the Ministry of Energy. The Ministry of Energy is very supportive when it comes to carbon capture and storage. And through that support and because of our plan to be net zero by 2050, we need to execute projects like this and others in the future to meet our net zero by 2050. But the cost of these projects, these are big plants, it will require cost mainly in the capture of CO2, then you have the transportation and then the injections. In the world, most of the cost is in the capturing of the CO2. So really, people talk about Big Oil, there's a new business called Big Carbon which is the management of the carbon business.
Absolutely. So of course Saudi Aramco has the longest vision of any oil company in the world, but you do live in a world of volatile oil prices. I think everybody would like to know kind of how you and Aramco see from where we are today, see the market in the rest of this year and into next year, given that it's been torn between on the one side geopolitics, on the other supply and demand.
Well, I think the market is currently balanced today. It's definitely the increase in interest rates, what happened in China had an impact, but it is still balanced in terms of supply-demand fundamentals. We are looking at 104.5 million barrels average for this year, the fourth quarter we're looking at close to 106 million barrels. Gas is also increasing. So next year we are anticipating a growth of about 1.5 million barrels. We think the stimulus package that the Central Bank in China, the growth in petrochemical, we are seeing significant growth in petrochemical in China, NAFTA and LPG mainly because of their transition.
By the way, I see wind blades here and there, and for a 5 megawatt of wind blades, you need about 50 tons of plastic. For an electric car, so repeat that again so people hear that, for 5 megawatt of wind generated power you need 50 tons of plastic. For every electric car you need about 200 to 230 kilograms of plastic. 10% by volume, 50% by volume, 10% by weight. So the transition, even by the way in solar panels, we have 10% comes from fiber and all of that. So for the transition to happen you need more oil. So China is increasing in NAFTA and LPG, in jet fuel. There is small impact on gasoline because of the buildup in electric vehicles and because of the economic situation, but in general there is still growth in China. When people talk about China, I see that they are always trying to maximize the downside and ignoring the upsides unfortunately.
So we'll come back and talk about that. I think just the last, we're going to invite our other colleagues up in a moment. So a big question but a very short answer: is AI having any impact on Saudi Aramco?
Definitely. AI is important and strategic and we do it. We have created a business two years ago for digital and AI and it is included in everything. If you visit our 4IR Center, you will see everything is all managed using data and using AI. And we are building the use cases which is important and critical for our business, 300 to 350 use cases right now we are creating. And these use cases is what with AI application, each use case has a timeline, has a cost savings with the application of AI. And I can later on give you some examples, but it is really giving us a lot of cost reduction. It helps us not only in cost reduction and more efficiency, also in reducing our carbon footprint.
Well thank you. Let me invite up our other panelists if we can. Mohammed Abunayyan, I'm looking for our other panel here, they come. He's Chairman of ACWA Power. And Luke Remont, and then I'll introduce them both as they take their seats. Mohammed is the Chairman of ACWA Power which has 65 GWs in the Middle East and around the world. He's also Chairman of Vision Invest and a really champion of Vision 2030. And Luke Remont is the CEO and Chairman of EDF which is known as the French nuclear utility but is also a very big player in wind and solar renewables around the world. So welcome both of you to the panel.
Thank you. I might, I thought I would just start by picking up from where Prince Abdulaziz left off today when he talked about the role of renewables in the Kingdom and ask both of you just how you see the role for solar and wind in Saudi Arabia and its growth potential.
Thank you for inviting me to join this great audience. To be frank with you, I don't know why you invited me to be in this panel after the great presentation of His Royal Highness Prince Abdulaziz and the great speech and really how he showed to everybody in the world that what Saudi Arabia has done and has made this country is really 100 steps ahead compared to many countries that they talk a lot and they do very little. But you know, it's really, I have to say this is very difficult. But for us in ACWA Power, we are very proud and we are delighted that we believe in the green energy. I'm not here to have any confrontation with my big brother who is, you know, for us, our life is always depending on him, how we live in this country. But reality today, we believe in renewables since 2008, 2009. We done our first decision in the strategy, we done our implementation in 2010. And I have to say, I think as he said His Royal Highness today, you know, Saudi Arabia is not giving subsidy as many other countries. Saudi Arabia is getting very high returns using the renewable versus the conventional energy. But you have to say that, you know, I'm sure you know it better, that you cannot really take renewable and replace the conventional. You need both to make it happen successfully.
And you have the right solution, right Luke? You can invest anywhere in the world in terms of renewables. You have five or six gigawatts in Saudi Arabia now, more to come. Why the Kingdom?
