Use of alternative fuels to grow gradually, with power generation to lead transportation.
Saudi Arabian Oil Company's chief executive officer Khalid al Falih said the world probably will rely for decades to come on fossil fuels, mainly oil, natural gas and coal.
In a speech on Monday at the World Energy Congress in Montreal, he said: “Even though the share of fossil fuels in the energy mix may decline over the longer term, the absolute quantities of energy from these sources will continue to rise simply because total energy demand is set to expand so significantly."
Coal, oil and natural gas are forecast to account for four out of every five units of energy consumption “for the foreseeable future,” he added.
Alternative fuels will grow gradually, with their use for power generation growing faster than for transportation, he said.
Saudi Aramco, as his company is known, maintains spare capacity near 4 million barrels a day, a level that has “helped assure market stability,” al Falih said. Aramco is the world’s biggest crude oil producer.
Saudi Arabia pumped 8.29 million barrels a day in August, based on Bloomberg estimates.
He said: “Nobody is contending that we should not encourage, should not invest, should not allow renewable energy to grow. We are investing in solar energy and are looking at wind and believe it will gradually take an increasing share, but it will take time.”
In the meantime, the oil industry should ensure that fossil fuels are “as clean as possible and avail them as affordably as possible to the rising needs of the developing world while we’re doing the transition.”
Al Falih said the kingdom has 260 billion barrels in oil reserves, or about a fifth of the world’s proven reserves.
He said: “At our current production rate, these reserves are enough for more than 80 years of production. Yet we expect that over time those reserves will grow by an additional 40 percent, and are working to raise the rate of recovery from our major oil fields to 70 percent, or twice the worldwide average.”
Saudi Arabia has proven gas reserves of 276 billion cubic feet a day, “the fifth largest in the world and growing,” he said.
The BP oil spill in the Gulf of Mexico this year was an “opportunity for learning and growth” for the industry, he said.
He added: “Tragedies such as this also underscore the need for senior management to clearly set priorities, and to ensure that the drive for profitability and shareholder value does not undermine a strong culture of operational excellence, environmental stewardship and safety.”