MercoPress. South Atlantic News Agency

Oil producing countries fear bio-fuels competition

Saudi Arabia admitted that petroleum producing countries are concerned with the competition of alternative fuels, such as bio-fuels and with the determination of many countries to ensure their “energy independence”.

This concern among producing countries is retracting investments in the sector, said Saudi Petroleum and Mineral Resources minister Ali Al-Naimi addressing the International Forum on Energy which concludes Tuesday in Rome. "I've seen unprecedented levels of uncertainty, doubts and even fear in the conversation about the future of energy and its impact on world growth prospects", he added. Al-Naimi said that "high prices of oil, geopolitical tensions, the new role of crude as a financial instrument, concerns about climate change and the growing popularity of the notion of energy independence are increasing the levels of anxiety among producers and consumers". The Saudi minister went on to describe fears on both sides. "News about the end of petroleum reserves increases fears among consumers regarding cuts and insufficient supplies to sustain global economic growth", he pointed out. But at the same time "the call to replace petroleum with alternative fuels in the name of energy security heightens anxiety among producing countries of a future with falling demand for the commodity which is their main source of income". This scenario is freezing investments argued Al-Naimi because producers don't dare to keep investing in an industry which could erode progressively, albeit gradually. But according to the Saudi minister both fears are "unjustified" and called for "dialogue" among both sides. "It's not the time for panicking and go running after exotic solutions or non proven solutions", he cautioned. "Unequivocally the world is not running out of petroleum, there are oil reserves for the next "fifty years" and pointed out that the true challenge was to make fossil fuels "cleaner" thus helping combat climate change. Al-Naimi in his speech emphasized that the world must begin by admitting that "hydrocarbons will continue to be the world's main source of energy in the near future".