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Shell’s Voser sees inevitable energy price rise

REUTERS

* Four new Saudi Arabias needed by 2020

* Shift towards biofuels, natural gas

ZURICH, May 12 (Reuters) – Higher energy prices are inevitable as it gets ever more difficult to extract oil and gas and the cost of carbon emissions is incorporated, Royal Dutch Shell (RDSa.L)’s CEO said in an interview with a Swiss paper.

He also cited rising demand as a spur to price and said by 2020 the world would have to develop oil sources equivalent to four times the capacity of leading exporter Saudi Arabia.

“We assume, (prices) will rise longer term,” Peter Voser told Wednesday’s edition of the Handelszeitung newspaper.

“Technologically, it’s becoming increasingly difficult to extract oil and gas. That’s pushing costs up. In addition, you have to include the costs for CO2. And moreover, demand will rise faster than supply. The consumer will in future have to accept a higher energy price.”

In late 2008, the International Energy Agency, which represents energy consuming countries, said the world would need four new Saudi Arabias if it were to cope with rising consumption and Voser took up the theme.

“To cover demand, by 2020 the world must develop oil sources that are equal to four times the capcity of Saudi Arabia. That’s production of 40 million barrels a day, half of what we have now. For this we need to invest gigantic sums,” he said.

But Voser also acknowledged the huge environmental challenge of escalating use of fossil fuels. In response, he reiterated comment Shell was expanding its production of gas as the cleanest burning fossil fuel as well as developing biofuels.

(Reporting by Catherine Bosley and Barbara Lewis)

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