Royal Dutch Shell’s chief executive predicted Thursday that oil will remain the dominant energy source for decades, and one that will become more difficult and thus more expensive to obtain, MarketWatch reported.
Shell’s CEO Peter Voser, gave the prediction as he spoke before an audience at The Wall Street Journal’s ECO:nomics conference in Santa Barbara, Calif., where he also responded to criticism that the Dutch oil major seems to have pulled back on alternative energy-related projects. Voser noted the company is narrowing its focus on particular technologies, such as biofuels, since he took on the role of CEO last year. Currently the company only spends about one-fifth of its research and development budget on alternative energy.
Voser said that despite developments in technologies including electric cars, wind power and other energy sources, “we will need conventional oil” for the foreseeable future. We cannot switch it off, and we can make it lower-carbon. I think what is dead is cheap oil,” he said. He added that while sufficient oil exists, producers will have to spend more to acquire it in the future. “I think you’ll see that in the end price for consumers,” Voser noted.
The CEO emphasized that Shell is focused on significant new development of natural-gas sources.
“Natural gas has 50% to 70% less [carbon] than coal, for example, and that’s where we see the long-term benefit,” Voser said. He added that Shell has spent roughly $15 billion since 2004 on gas projects in the U.S. alone. He also addressed the prospect of cap-and-trade legislation being passed in Washington. Such legislation would force industries to pay for greenhouse-gas emissions, and thereby create a financial incentive to reduce pollution. Shell has been a proponent of cap and trade, arguing that it could help develop a modern energy economy and create jobs. “I’m still very hopeful we’ll get something passed,” Voser said, but added, “I’m skeptical [about] this year.”