GCC urged to invest more in renewable energy

Gulf oil producers need to pump more investment into the renewable energy sector although they control more than 40 per cent of the world’s crude reserves, according to a former Western oil executive.

Jeroen van der Veer, ex-CEO of Royal Dutch Shell, said he expected demand for energy to nearly double in 2030 but added there is a large degree of uncertainty about the availability and price of respective sources of power.

Veer was addressing the third Saudi Arabia International Oil and Gas Exhibition in the western Red Sea port of Jeddah on Thursday. His comments were published by local newspapers on Friday.

“Not only will do we know the relative price of oil and gas compared to other sources of energy in 2050… Do we know about the cost and price of CO2 solutions? Do we know about scarcity constraining biofuels?” Veer asked.

“To counter this uncertainty, governments in the Gulf region have to pursue an energy mix and invest in the research and development of renewables...there are a lot of uncertainties, so we get concerned. And if you get concerned, you have to spread your bets…It is an insurance premium against uncertainties of future energy supply, and I am glad to see that most countries in the region have invested in that premium. Yes, the region is based on oil and gas, but it makes strategic sense to be involved in the alternatives.”

Veer said gas has been undervalued as a source of energy. “Natural gas has been too modest about its strength and abilities to provide energy…as a result of a supply side discontinuity, the known reserves of natural gas have gone up. But this has not been reflected in demand.”

He agreed that wind and solar are cleaner sources of energy, but said that these alternative sources are not yet entirely cost effective, still requiring subsidies.
 

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