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SANTA BARBARA, Calif. -- Seeking to manage expectations for new, alternative energy sources, Royal Dutch Shell's chief executive predicted oil will remain the dominant energy source for decades -- not to mention one that will become more difficult to obtain, and hence more expensive, MarketWatch reported.
Shell CEO Peter Voser, addressing an audience at The Wall Street Journal's ECO:nomics conference in Santa Barbara last week, also deflected criticism that the Dutch oil major seems to have pulled back on alternative energy-related projects by saying instead that the company has simply sought to narrow its focus on particular technologies, such as biofuels, since he stepped into the top role last year.
Shell currently spends about one-fifth of its research and development budget on alternative energy, Voser acknowledged, saying: "We're playing on the ones that are close to our business." However, "we have not slowed down or changed, but we are focusing more," he told conference attendees.
Voser also addressed whether so-called "peak oil" -- the theory, around since the 1950s, that global demand will ultimately outpace supply -- has now been effectively debunked.
The CEO answered instead that despite developments in technologies such as electric cars, wind power and other alternative energy sources, "we will need conventional oil" for the foreseeable future. "We cannot switch it off, and we can make it lower-carbon.
"I think what is dead is cheap oil," Voser said, adding: "There is sufficient oil around," but producers "will have to spend more to get it ... and I think you'll see that in the end price for consumers."
Voser projected that by 2050, some 40 percent of the roughly 2 billion cars worldwide will be electric -- a forecast that would effectively leave nearly two-thirds still running on traditional energy sources, mostly oil.
However, the CEO emphasized Shell is focused on significant new development of natural-gas sources -- something that one luminary in the audience, Texas oilman and alternative-energy proponent T. Boone Pickens, spoke up in favor of also.
"Natural gas has 50 percent to 70 percent less [carbon] than coal, for example, and that's where we see the long-term benefit," Voser said. He added Shell has spent roughly $15 billion since 2004 on gas projects in the U.S. alone.
The Shell CEO also addressed the prospect of cap-and-trade legislation being passed in Washington. Such legislation would force industries to pay for greenhouse-gas emissions, and thereby create a financial incentive to reduce pollution, the report stated.
Shell has been a proponent of cap and trade, arguing that it could help develop a modern energy economy and create jobs. "I'm still very hopeful we'll get something passed," Voser said, though he added: "I'm skeptical [about] this year."
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