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Aramco brushes aside peak-oil worries

THE WORLD'S oil reserves could last as much as 200 years at the present consumption rate, according to Saudi Aramco. "I do not believe the world has to worry about peak oil for a very long time," the firm's chief executive, Abdallah Jum'ah, said at an energy conference in Rome last month.

"Ignoring liquid fuels" in energy policies and investment decisions and discouraging their development "on various pretexts" would pose a greater danger, he said. It would stunt the development of new technologies – hampering efforts to use energy in a more environmentally friendly way and undermining the world's ability to meet energy demand.

Jum'ah outlined two trajectories for the exhaustion of oil reserves – a conservative case and a more optimistic target case. Oil-in-place in Aramco's conservative case amounts to 6-8 trillion barrels for conventional oil and 13-16 trillion barrels for non-conventional resources. Consumption of conventional oil to date amounts to 1.1 trillion barrels – 7-9% of resources in place.

Conventional proved recoverable reserves, said Jum'ah, amount to 1.2-1.3 trillion barrels and proved unconventional reserves amount to 1.5-3.0 trillion barrels. However, these figures are likely to increase significantly: Aramco says conventional oil yet to be discovered probably amounts to 250bn-1 trillion barrels. In addition, improvements to recovery rates at known fields should result in increases on a similar scale, he said.

In total, recoverable non-conventional and conventional resources are likely to be 3-6 trillion barrels – roughly 100-200 years' usage at present consumption of 86m barrels a day.

Separately, Jum'ah listed four possible strategies for mitigating the environmental effect of fossil fuels: improved efficiency of energy use; the development of cleaner fuels; greater use of alternative-energy sources; and restrictions on energy use.

According to Jum'ah, the first two – efficiency improvements and new technology – are the best approaches. Alternative energies, he said, will not be a significant part of the energy mix for a long time and, in the case of renewables, nuclear and coal, not applicable to the transportation sector. Restrictions on energy use would be difficult to enforce and ethically questionable because it would prevent poor countries from raising living standards.

Energy development should predominantly focus on fossil fuels, he argued. "If attention is focused on other options at the expense of oil, I fear we will not have the tools needed to tap these vast resources." He expressed particular doubts about the economics, energy efficiency and greenness of biofuels, saying it is "difficult to predict with any degree of certainty their ultimate contribution to the global energy mix".

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