Saudi Arabia foresees fossil fuel phase-out this century

Saudi Arabia, the world's largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom's oil minister, said on Thursday.

The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil.

Mr Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: "In Saudi Arabia, we recognize that eventually, one of these days, we are not going to need fossil fuels. I don't know when, in 2040, 2050 or thereafter."

For that reason, he said, the kingdom planned to become a "global power in solar and wind energy" and could start exporting electricity instead of fossil fuels in coming years.

Many in the energy industry would find his target of a 2040 phase-out too ambitious. Saudi Arabia is the largest consumer of petroleum in the Middle East, and more than 25 per cent of its total crude production — more than 10 million barrels a day — is used domestically.

A 2012 Citigroup report said that if Saudi oil demand continued to grow at current rates, the country could be a net oil importer by 2030.

But while acknowledging that Saudi Arabia would one day stop using oil, gas and coal, Mr Naimi said calls to leave the bulk of the world's known fossil fuels in the ground to avoid risky levels of climate change needed to be put "in the back of our heads for a while".

"Can you afford that today?" he asked other conference speakers, including British economist, Nick Stern, author of a 2006 UK government report on the economics of climate change. "It may be a great objective but it is going to take a long time."

With more than 1 billion people globally still lacking access to electricity, there would be strong demand for fossil fuels for years to come, he said, adding that more work was needed to find ways to burn oil, coal and gas without releasing warming carbon dioxide.

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