Saudi Oil Minister Warns Against Hasty Transition to Renewable Energy
According to Saudi Arabia’s Oil Minister Ali Naimi, renewable energy sources are not fully equipped to meet the world’s energy demands and that governments should avoid making huge investments in developing clean energy systems.
At a conference in Houston, Mr. Naimi argued that recent injection of billions of dollars by governments to develop renewable energy systems could lead to the collapse of the oil industry. He said that such steps would drive away investors which would hurt the oil producing nations as demand and prices of oil products has been falling sharply. His remarks were clearly aimed at the Obama administration which is reversing President Bush’s policies by openly encouraging massive investments in the renewable energy sector.
United States has been a ‘close friend’ and seeing President Obama acting on his promise of energy independence seemed to have alarmed the Saudis. Bills approving of oil exploration along the US coasts, massive subsidies for renewable energy projects and Obama administration’s intent to reduce carbon emissions means a medium to long-term decline in oil imports and which have left the Saudis (and OPEC) concerned.
Addressing concerns about the rapid growth in renewable energy investment around the world, the minister said:
“We must be mindful that efforts to rapidly promote alternatives could have a ‘chilling effect’ on investment in the oil sector. A nightmare scenario would be created if alternative energy supplies fail to meet overly optimistic expectations, while traditional energy suppliers scale back investment.”
In a sense, he is right in defending his country’s interests but the conditions that prevail in today’s world are not in favor of the oil sector. According to the International Energy Agency oil supply would peak in 2020, governments around the world are planning to invest billions to build low carbon economies and energy security & energy independence find greater consideration in national policies of governments that ever before.
The time is right to invest in renewable energy systems. The world is facing a plethora of complex problems like climate change and economic recessions, the solution to these problems find common ground in building low carbon green economies which create jobs by promoting energy independence.
The world leaders must see the opportunity and necessity to act to reduce carbon emissions. Transition from imported fossil fuels to jobs creating renewable energy projects could lead the world to the path of economic resurgence and meeting emission reduction goals under the new climate treaty.
Image: jenlund70 (Creative Commons).
The title of the article should be “Speaking Monkey Show at Oil Conference”
Of course, the Arabs want the world to remain addicted to oil. They were able to control the white house for 8 years and you saw what happened there with record profits and a resource war with Iraq. We have a small window of opportunity to make the transition otherwise without a steady transition, it will be very painful to make the changes necessary. All the positive things are in moving to a clean energy economy. Staying the course will prove disastrous not only to the environment but to the world economy. The high costs of oil is what caused a liquidity crisis which drove the world depression. Now, the world is confronted with climate change and one can clearly see that nothing good comes from oil. A planet that is disintegrating around us. An economy in a shambles, wars….it never stops. The end of big oil will be the best thing that ever happened to the world.
Poor Saudis!! Everyone please take out your violines. OPEC has enjoyed record oil profits and the expense of the rest of the world. Many of the OPEC nations want nothing less than the complete dependence of the west. We need to rise against these bullies at OPEC through the development of alternative fuels. in the words of a Turkish dipliomat “let them eat petroleum.”
AS I recall, president George Bush asked the Saudi King for some relevance from the excessive costs associated with petrol. The whole world has grown addicted to the crack cocaine of the energy sector. They have lived a privileged lives and told the rest of the world to enjoy being raped by these thugs.
Conflict of interest? I don’t see any conflict of interest!!! (joke) Sure, they will be useful while we tool up to meet our energy demands with renewable and alternative energy sources. Also, we need to reassess our energy demand. Reduced consumption surely has to go hand in hand with the transition.
Surprise, surprise, surprise.
HAHAHAHAHAHAHAHAHAHAHAHA!
OMG I nearly peed myself I was laughing so hard. So the people who have made so much money gouging the world that they have built a city out of the desert(Dubai) want us to worry about their economy. Wow, that is supreme arrogance and a complete lack of reality. I hope every one of the OPEC countries reaps what they have sown.
This is an important consideration. While it is a good idea to acheive energy independence and reduce pollution, it is imperative to make the transition responsibly, and to heed any warnings from those who know the most about the oil situation.
OPEC, along with American oil companies, and aided by well placed political ‘friends’, have spent decades squeezing, gouging, and doing everything they could to manipulate the price of oil and control the market. Exxon is right now enjoying record profits while the rest of the planet is thrust into economic chaos. And did the rest of the world get a break when we were down? Not a chance! They expect to reap a windfall on every dime they invest, even though they really contribute nothing except for a raw commodity. There’s no toil in that, no inspiration in that, no significant achievement in that, only a ruthless and relentless pursuit of profit devoid of ethics or compassion.
This economic stimulus package may not do very much to heal the economy, but if the alternative fuel initiative has the oil machine worried, I say it’s worth it even if only for that reason alone. The oil industry does not deserve a break!
Hello,
Two corrections.
1) During George W’s term, the following subsidies were in place:
$0.50/gal subsidy on ethanol (carryover from Carter/Reagan/Bush/Clinton).
$0.015/kwh subsidy on wind energy - renewed several times.
$1.00/gal subsidy for ethanol not developed from corn or food
$1.00/gal subsidy for synthetic diesel from coal (and other fuels).
$????/car subsidy for buying a hybrid car.
$????/kw subsidy for installed solar
$????/kw subsidy for geothermal energy
Granted - George W may or may not have liked all of these things, but he did sign them into law. I can’t think of a veto against any of them. Matter of fact, I can’t think of a W veto against anything.
If Obama did nothing but keep these subsidies in place, the alternative energy industry would continue to grow exponentially. I guess Obama can be president during the steep part of the growth curve, and take the credit, but he doesn’t need to change anything.
2) As a practical matter, the oil substitution business will mostly be accomplished via in-ground refining of Canadian Tar sands, and Chinese conversion of coal to methanol. The Chinese are in the process of converting their electrical infrastructure to nuclear. As they do that, current coal consumption will be transferred to gasification->methanol plants.
3) The oil business is global. What matters is global demand for oil vs global supply. If oil demand or supply changes in any country, the price of oil goes up or down for everyone. The Saudis ultimately care about that - not whether the US imports its oil or uses an alternative (though obviously, that can affect global demand/supply).
James