Speaking at the 3rd Saudi Arabia International Oil and Gas Exhibition (SAOGE 2010) Jeroen said that not only will demand for energy have doubled by 2030, but there is a large degree of uncertainty about the availability and price of respective sources of power.
“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?” he 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, he said.
“There are a lot of uncertainties, so we get concerned. And if you get concerned, you have to spread your bets,” said Jeroen.
“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.”
Jeroen felt that natural gas has been undervalued as a source of energy. “Natural gas has been too modest about its strength and abilities to provide energy,” he said.
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 said.
Jeroen conceded that wind and solar are cleaner sources of energy, but said that these alternative energies are not yet entirely cost effective, still requiring subsidies.