Saudi Arabia's Oil Minister Ali Al-Naimi said Thursday he expects fossil fuels will supply the bulk of global energy needs for at least the next 50 years. To meet future demand, the No. 1 producer, is boosting production, he told delegates at the International Oil Summit in Paris. “Moving from our current sources of energy, primarily fossil fuels, to a dominant new source will require at least half a century and perhaps more given the various challenges associated with such a broad based convergence,” he said. “Fossil fuels can be and should be made environmentally friendly sources of energy, particularly as they will continue to meet the lion's share of energy needs for the foreseeable future,” the minister said. Al-Naimi said carbon capture and storage will help to clean up fossil fuels, which “should be supplemented with truly renewable energy sources.” Ethanol and other biofuels do not meet environmental and energy security goals, he said. Their cultivation eats into the human food supply, reduces the absorption of carbon dioxide as forests are cut down, has not improved the security of energy supply and has not reduced petrol prices, he said. “Biofuels are not contributing to environmental security,” Al-Naimi said at a Petrostrategies oil summit here. “Forests that play a major role are being cleared to produce biofuel crops (and) as a result, global carbon emissions are likely to increase as a result of biofuel production.” Biofuels also enjoy “financial favoritism” from governments. The Saudi minister flagged solar energy as “perhaps the best source” of alternative energy, predicting researchers will succeed in making solar cells “more effective” to expand use. Saudi Arabia is spending over $90 billion (§56.6 billion) in next five years to boost its production capacity, he said. Saudi Arabia has 264 billion barrels of crude oil reserves with the potential to increase this by at least 200 billion barrels, he said. Natural gas reserves of 268 trillion cubic feet could be doubled. Saudi Arabia also plans to double its refining capacity from 3 to 6 million barrels per day, he said. “Our major source of contribution to the global economy is through our petroleum resources,” he told conference delegates. Oil prices steadied near $111 a barrel Thursday after jumping to a new record in the previous session on an unexpected drop in US crude inventories. New York's main oil contract, light sweet crude for delivery in May, drifted 28 cents lower to $110.59 per barrel. The contract had rocketed to an historic $112.21 in intra-day trade on Wednesday. In London on Thursday, London's Brent North Sea crude for May eased 19 cents to $108.28 per barrel, after earlier striking a lifetime peak of $109.98. Al-Naimi said prices are not rising because of a lack of supply. “I believe inventories are building. The world is producing more oil than is being consumed,” he said. Al-Naimi also said there were not enough buyers of oil to justify an increase in oil production, despite high prices, noting that there were not enough buyers of oil in the market to absorb extra output. Asking where the buyers were, he said that if more buyers emerged, then “we” would sell. But there were no such buyers, he argued. The minister said: “Where is the buyer? If there is one we would sell (oil at once). There are no buyers.” Meanwhile, the executive director of the International Energy Agency Nobuo Tanaka repeated on Thursday a call to oil-producing countries to maintain their output levels. Producers should maintain their level of production, and inventories of oil in consuming countries would then rise gradually, he said outside an international conference on oil here. Tanaka also said that demand for oil in the US was slowing down. __
