Fossil fuels to dominate for decades: energy forum

The final reading of the document at the 12th International Energy Forum (FIE, as it stands in Spanish), in Cancun, Mexico.

Oil and gas will provide the bulk of the world’s energy needs for decades despite an increasing role for cleaner renewable fuels, ministers agreed at a key forum held in Cancun, Mexico, this week.
Ministers from oil producing nations and consumers “affirmed that fossil fuels will still provide the lion’s share of the energy supply for decades to come, although renewable energy will have to play an increasing role.”
A statement issued at the end of the two-day International Energy Forum (IEF) added that all energy sources – including nuclear and wind power – must be used to meet the projected rise in energy demand in the coming decades.
The latest biennial IEF, held in the beach resort of Cancun, also published a declaration Wednesday in which 66 countries pledged greater cooperation, and called for transparent markets to tackle oil price volatility.
IEF countries – including major oil producer Saudi Arabia and top consumer the United States – account for more than 90 percent of global oil and gas supply and demand.
Ministers meanwhile noted that more than 25 trillion dollars of investment is needed across the energy sector by 2030.
The executive director of the International Energy Agency – a body advising key oil consuming countries – said on the sidelines of the IEF that the Organization of Petroleum Exporting Countries needed to step up its investment.
“In a revolutionary scenario of low-carbon technologies, we still need more oil from OPEC,” Nobuo Tanaka told AFP.
And he added that the potential for renewable energy usage was “huge.”
Tanaka predicted that by 2050, 25 percent of energy used to power modes of transport could be supplied by biofuels.
Another key focus of discussion in Mexico was oil price volatility in a bid to prevent a repeat of large swings seen in late 2008.
Oil prices surged to all-time peaks of above 147 dollars a barrel in July 2008 amid supply concerns, before the severe global economic downturn saw them crashing to just 32 dollars in December of that year.
Producers and consumers blame the volatility on financial speculators and a lack of accurate data on nations’ oil inventory levels.
Crude futures have steadily recovered since late 2008, trading in recent months between 70 and 80 dollars – a level deemed acceptable by producers and consumers.
The price of crude surged to near 84 dollars on Wednesday, however, hitting levels close to 17-month highs in response to a falling dollar and weaker-than-expected US jobs data, traders said.
British junior energy minister Philip Hunt said in Cancun that oil price volatility had “very negative consequences for the world.”
 “We need stable and efficient energy markets. We need them both in terms of ensuring future investment and development,” he said.
“But we also need them in helping the globe as a whole recover from the financial problems that we’ve seen in the last two years,” added Hunt, representing IEF executive board member Britain.
OPEC, whose member nations together pump about 40 percent of the world’s oil, blames speculators for pushing crude futures to record highs nearly two years ago.
IEA head Tanaka meanwhile told AFP that while speculators played a role in creating excessive oil price volatility, major energy consumers such as China did not help matters by failing to provide transparent data on their oil stockpiles.
The IEF began the process of improving inventory and energy demand data in 2001 with the launch of the Joint Oil Data Initiative (JODI), whose member organisations include OPEC, IEA and Asia-Pacific’s top economic club APEC.
In its declaration on Wednesday, the forum pledged to improve the work done by JODI.

AFP