By James Buckley
Saudi Aramco representative says co-operation between all parties is the only way to secure long term energy stability.
The energy supply and demand debate comes down to who should bear the responsibility, says Ibrahim Mishari, Saudi Aramco's vice president of marketing and supply planning.
Speaking at the Middle East Petroleum and Gas Conference, Mishari said co-operation between all parties was the only way to ensure adequate, reliable energy supplies and to allow economic growth to continue unhindered. He also contended joint ventures and partnerships were the most important drivers in sustaining the industry.
"The subtext of energy independence suggests a departure from reliance on fossil fuels, yet these are expected to meet most of the world's primary energy demand over the coming decades," he said. "Energy independence, at face value, is over-simplistic.
"When consumers require more energy to fuel fast-paced economies and better lifestyles, yet call to cut back on dependence, that's a communication breakdown. Producers have risen to the challenge, increasing exploration and enhancing recovery. But further downstream, there's a refining bottleneck."
Mishari said consuming nations need to understand that the supply conundrum is not a unilateral game. Tighter relationships, more communication and better co-ordination between producers and consuming nations are needed, not ineffective strategies.
He also criticised ‘strategic petroleum reserves', claiming oil cannot simply be released to bring down prices. "Strategic storage taxes, tariffs, restrictions on permitting and subsidies for non-economic energy sources have been ineffective," he said.
Mishari concluded his talk with a review of the oil price, warning that the days when consumers were protected from sharp increases are long gone. "Under ideal conditions, one would expect market forces to regulate prices and help achieve equilibrium," he said. "However, we live in an uncertain world, and that inexactness complicates the workings of market forces. Price isn't static; it's affected by demand patterns."