All energy sources will be needed to meet future demand, warns Saudi Aramco CEO
DAEGU, South Korea -- All sources of energy, with oil and gas at the core, will be needed to meet the rapid increase in world energy demand by 2050, Khalid A. Al-Falih, president and CEO, Saudi Aramco, said in the opening keynote address at the World Energy Congress (WEC) 2013.
In line with the WEC theme of Securing Tomorrow’s Energy Today, Al-Falih said the energy industry is healthier and more dynamic than before, but still faced a historic challenge to provide ready access to clean energy, particularly for the billions of people around the world trapped in energy poverty.
With the world's population projected to increase by 2 billion by 2050, and the global economy expected to be three, or even four, times larger, energy consumption is certain to rise significantly.
“We need all energy sources; all industry players; all governments; all academic and research institutions; and all energy bodies, working together in the global energy village,” Al-Falih said. Even with advanced energy management and efficiency programs that could lower consumption, demand is expected to be substantially higher by 2050 with the world’s rising population empowered by prosperity, he said.
Helping to meet the future supply challenge will be the abundant availability of oil and gas, which, Al-Falih emphasized, will remain the core source of the world’s energy.
Saudi Aramco is working on increasing conventional oil recoveries to 70%, which is more than double the current world average, and discovering large, untapped oil and gas resources, both onshore and offshore, and both conventional and unconventional, Al-Falih said.
Al-Falih also urged prudence in the use of oil and gas resources, which “are the crown jewels of current and future energy supplies”, and called on the industry to improve its efficiency and environmental performance, and extend their use by combining them appropriately into the energy mix with other sources.
In his address, Al-Falih said that while nuclear, coal, alternatives and renewables have their challenges and limitations, these energy sources will unquestionably have a role to play in meeting the world’s future energy supply challenge.
Ultimately, the appropriate energy mix should be left for the market and technology to determine, Al-Falih said. But with the projected increase in the world population and ensuing demand, Al-Falih said there is room for everyone in the energy industry to prosper “under one roof”. He then went on to outline four pre-requisites for success: pragmatic global energy policies; long-term investment; R&D and technology; collaboration.
A stable economic environment and market certainty is critical to ensure long-term investment by the industry, he said adding that Saudi Aramco has made massive investments to create and maintain the world’s largest spare oil production capacity of more than 2 million barrels per day.
“In the past two years alone, we have swung our production by more than 1.5 million barrels a day in order to meet market supply imbalances and retain that vital market stability the world needs,” Al-Falih said.