Fossil fuels' reign will continue, Saudi Arabia's oil chief says

Mar 10, 2010 — Fort Worth Star-Telegram

Jack Z. Smith

Mar. 10, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- HOUSTON -- While touting the development of alternative energy technologies such as solar power, the CEO of Saudi Arabia's national oil company stressed Tuesday that traditional fossil fuels -- oil, natural gas, coal -- will be kings of the energy world for a long time.

As he surveyed a standing-room-only audience at the CERA Week 2010 energy conference in Houston, Saudi Aramco chief Khalid Al-Falih, a Texas A&M University graduate, made no bones about his faith in oil and natural gas.

"I don't think any of us will see, at any time in our lives, fossil fuels meeting less than 70 percent of total energy demand," he said.

While fossil fuels' percentage of total energy output can be expected to decline, the volume of energy produced from them can be expected to rise as world energy demand doubles over the next 40 years, he said. Global oil demand -- now at about 85 million barrels a day -- is expected to jump to 105 million barrels a day by 2030, Al-Falih noted.

In the past five years, Saudi Aramco has spent more than $62 billion, primarily to boost its oil production capacity to about 12.5 million barrels per day. But about 4 million barrels of that is now spare capacity, because of weakening energy demand, Al-Falih said.

Over the next five years, Saudi Aramco plans to boost its spending to $90 billion, including major investments in natural gas, he said. It has made some large gas discoveries in Saudi Arabia, he said.

While expressing abundant faith in a continuing pre-eminent role for oil and gas, Al-Falih said that the petroleum industry should strive to become "cleaner and greener" and that he's excited about the prospects for solar energy in sun-drenched Saudi Arabia.

JACK Z. SMITH, 817-390-7724

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