Technical advances in the production of crude oil and natural gas will be made in the future just as surely as they will in alternative fuels, but fossil fuels will still satisfy about 80% of total global energy needs 20 years from now, the president and chief executive officer of Saudi Aramco said at the 29th annual IHS CERAWeek in Houston.

Khalid A. Al-Falih said he sees three imperatives that the energy industry must satisfy simultaneously, what he calls the “Triple A Triangle.” These are adequacy of supply, affordability, and acceptability (protection of the environment).

“The energy industry must make concurrent investments in conventional and alternative sources, on the basis of a level playing field that sends clear economic signals to investors, and allows real competition to flourish,” he said.

Alternative fuel development is not only desirable, but necessary, he said, given that world energy demand is expected to double in 40 years. The continued development of wind, solar, next-generation “biofuels, even gas hydrates, is not in question,” he said, and it is not an either-or choice between fossil fuels and renewables.

But Al-Falih has reservations about the speed and timing of these new fuel sources. “My friends, the belief in an almost instantaneous transformation to alternative energy is worrisome to me. If alternatives over-promise and under-deliver, we may see the development of ‘green bubbles,’ the collapse of which will not only have a negative impact on the broader economy, but will also damage the long-term prospects for success of these energy sources.”

“While our subsurface resources remain plentiful, we may create a bottleneck above ground by failing to invest wisely and in a timely fashion,” he cautioned.

Al-Falih said the world should avoid excess taxation on certain fuels and cross-subsidies of others. He advocated more use of natural gas for power generation, noting that emissions from transportation contribute only 13% of manmade greenhouse gas emissions.

“Making the use of oil cleaner and greener should be at the top of the petroleum industry’s agenda…”

In the past five years, Saudi Aramco has spent $62 billion to increase its oil output capacity to 12 million barrels per day. It expects to invest another $90 billion in the next five years, with an increasing proportion directed to natural gas.

Al-Falih urged others to invest across the cycles, saying as Saudi Arabia only accounts for 10% of global oil production, “that leaves 90% of the load for others to shoulder.”