IHS CERAWeek: Saudi oil minister emphasizes importance of fossil fuels

By Ben DuBose
Digital Editor

HOUSTON -- The popular narrative resulting from the recent UN COP21 climate negotiations in Paris has understated the role of fossil fuels in the global energy mix, the leading Saudi oil minister said on Tuesday.

Speaking in a special address at the annual IHS CERAWeek conference in Houston, Ali bin Ibrahim Al-Naimi explained his view of how fossil fuels and renewable energy sources can coexist moving forward. Al-Naimi, who holds the title of Minister of Petroleum and Mineral Resources of Saudi Arabia, said his country recognizes the threat posed by climate change, but adds that a more pragmatic approach should be taken.

"The problem is not fossil fuels themselves," Al-Naimi said. "The problem is the harmful emissions we get from burning coal, oil and gas. The answer is not to leave the world’s greatest, most plentiful and economic, energy resource in the ground."

"The solution is to work on technology that minimizes and ultimately eradicates harmful emissions," he continued. "Some don’t accept this view, but I have faith in technology."

"It is already happening on a small scale and, over the decades, the world has made progress. But much more work and collaboration is required."

Though part of the Saudi minister's address focused on his country's perspective on oil prices, he said he believes the threat posed to fossil fuels by climate negotiations "poses a much greater existential challenge" to the industry than cyclical price movements.

Al-Naimi went on to praise US Secretary of Energy Ernest Moniz for his leadership on understanding and tackling the problems, particularly by placing an emphasis on technology.

"It is inconceivable that renewables alone can supply the growing global population with the critical energy it needs in the decades ahead," Al-Naimi said. "And it is simply not fair for advanced nations to dictate what developing nations can or cannot do to meet their energy needs."

Al-Naimi noted that Saudi Arabia is investing time, money and brainpower into carbon capture and storage solutions, while also investing in renewables and taking "serious action" to improve energy efficiency across the nation's economy.

"But the widely accepted narrative that emerged from COP21 was that fossil fuels are harmful and, ultimately, they must be kept in the ground," Al-Naimi said. "Now, a disclaimer. I’m Saudi oil minister, yes, and I’m speaking to a room full of oil men and women, so of course I would say this. But I’m also a realist. And I am pragmatic. 

"Ladies and gentlemen, fossil fuels are good," he continued. "And they are needed. They are an abundant natural resource. Over the past 250 years, they have transformed our economies and our societies. Their mass production has resulted in mass consumption. They create and sustain economic growth and prosperity. 

"Fossil fuels will continue to play a vital part of the overall energy mix, whether we like it or not."

Al-Naimi described himself personally as a "big supporter" of renewable energy, particularly wind and solar. He noted that for Saudi Arabia and Texas, solar could be a great source of energy for future generations.

"But I believe a mix of sources is the best and most secure way forward," he said.

The Saudi energy minister pointed out that Saudi Arabia, the US, Europe and many other nations are built on energy derived from fossil fuels.

"As an industry, we should be celebrating that fact, and better explaining the vital importance of these precious natural resources," Al-Naimi said. "We should not be apologizing. And we must not ignore the misguided campaign to “keep it in the ground” and hope it will go away. 

"For too long the oil industry has been portrayed as the Dark Side, but it is not. It is a force, yes, but a force for good."

Al-Naimi closed out his remarks by addressing the current market downturn and stressing the cylical nature of the energy industry.

"This business is cyclical," he said. "We are in a painful downturn, but the market will re-balance and demand will pick up. I remain optimistic. We must continue to work together and we must stick together if we want to achieve our common goal of supplying energy for the betterment of the world and human-kind."
IHS CERAWeek continues through Friday at the Hilton Americas in downtown Houston.

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