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Low oil investment could harm recovery: Saudi minister
Geneva (AFP) March 16, 2009 Saudi Oil Minister Ali Ibrahim al-Nuaimi on Monday warned that a "premature shift" towards renewable energy sources could jeopardise essential investment in oil and an economic recovery. Nuami said at an energy conference in Geneva that an "ideal" price for oil in the current environment would be between 60 to 75 dollars to allow minimum viable levels of investment in the industry. "Forty dollars is not enough, you need in between 60 and 75 dollars to allow marginal producers to continue producing ethanol, heavy oil," he told the meeting of energy traders, executives and academics. The Saudi oil minister is an influential figure in the Organisation of Petrolueum Exporting Countries (OPEC), which decided Sunday to leave output unchanged after a meeting in Vienna despite the slowdown in demand and prices now around 42 dollars a barrel. "Today's low prices are just as unsustainable as soaring prices," he cautioned Monday. Nuami voiced concern over the combined impact of the financial and economic crisis, an emphasis on developing renewable energy sources in state stimulus plans, and volatile markets that led to low prices and plunging revenues. "Diminishing investment in fossil fuels will impact our ability to provide the energy that will be needed when the economy turns around," Nuaimi told the inaugural Energy Pact Conference. "I would voice caution against a premature shift from fossil fuels to slowly evolving alternatives," he said. "Regardless of intentions, the consequences can be deeply counterproductive to global energy security and indeed to the natural environment." Nuaimi and Iranian Oil Minister Gholam Hossein Nozari argued that while an "inclusive mix" of fossil fuels and renewables was essential to meet future needs, many alternatives to oil and gas were still costly and unproven. Fossil fuels were expected to account for 80 percent of world energy needs for years to come, Nuami insisted. "While the days of easy oil are over, the days of oil as a primary fuel source are far from over," he added. Producers were also facing progressively lower levels of investment in fossil fuels in the economic crisis, despite the need to develop cleaner burning oil, improve extraction and update refineries, he argued. "The climate of uncertainty produces a strong sense of investment risk for producers," he told the conference. Oil prices fell on Monday after OPEC ministers decided in Vienna to wait until May for a decision on a further possible cut in output, after the G20 group of wealthy and emerging economies meet in April to coordinate action against the economic crisis. Share This Article With Planet Earth
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China defends Spratlys sea patrol
Manila (AFP) March 16, 2009China on Monday defended its move to send a patrol ship to the disputed Spratly islands, saying it was not a violation of an agreement to maintain the peace in the South China Sea. |
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