Saudi Arabia plunges into renewable energy but remains bullish about selling oil

Source: Lisa Friedman, E&E reporter • Posted: Thursday, May 2, 2013

U.S. energy independence is “naive,” Saudi Arabia’s petroleum and naturals resources minister said yesterday.

Minister Ali Al-Naimi rejected the theory that Earth’s crude production may be near its limit. And he warned that America’s natural gas boom will never make it free of Middle East oil.

“Newly commercial reserves of shale or tight oil are transforming the energy industry in America … and that’s great news,” Al-Naimi said. But, he added, the idea that it will help the U.S. eliminate oil imports is unrealistic.

“I believe this talk of ending reliance is a naive, rather simplistic view. Talk of energy independence fails to recognize the interconnectedness of global energy markets. No country is truly energy independent,” Al-Naimi said. “I don’t believe this is in anyone’s best interest, and I don’t think it will happen.”

Speaking at the Center for Strategic and International Studies in Washington, D.C., Al-Naimi spoke warmly about the future of solar in Saudi Arabia and said his country is intent on diversifying. But the longtime oilman never mentioned the words “climate change” and spoke most passionately about fossil fuels, opening his speech by crediting traditional energy sources with creating jobs, fueling U.S. global dominance, and ending poverty in China and other parts of the world.

“Fossil fuels are the energy source that has truly endured. They have the capacity to sustain us well into the future,” he said. Approached after the speech and asked why Saudi Arabia has consistently blocked global efforts to reduce or eliminate fossil fuel subsidies, Al-Naimi declined to answer.

Saudi Arabia is nevertheless investing heavily in renewable energy. The kingdom is planning to invest $109 billion over the next 20 years in solar, wind, geothermal and waste-to-energy, with a target of more than 54,000 megawatts of renewable energy capacity by 2032. Most of that, officials say, would come from solar, but so far only 15,000 MW of solar is under construction.

“Our ultimate aim is to diversify away from our reliance on oil reserves,” Al-Naimi said. “We have the silica, the sunshine and the acreage.” Still, he said that Saudi Arabia remains easily able to sustain its reserves at its current 226 billion barrels and that it could even increase with improved technology.

Al-Naimi said, “I don’t think Saudi Arabia is concerned too much about running out of oil.”