IEA Says Fossil Fuels to Stay King Over Next 20 Years By Richard Mably Nov 18 4:14am ET

RIYADH (Reuters) - The world's thirst for oil shows no sign of waning over the next 20 years, despite this year's oil price scare, but with the right investment in the Middle East, capacity should prove sufficient to avert a global crude supply crunch, according to the West's energy watchdog.

The Paris-based International Energy Agency sees growing reliance on oil and gas imports over the next 20 years with OPEC nations taking an increased slice of a fast-growing international petroleum market.

In notes prepared for a speech to be given this weekend at a forum of oil producers and consumers, IEA Executive Director Robert Priddle said world oil demand was projected to reach 115 million barrels per day (bpd) by 2020 from 76 million bpd this year -- annual growth of nearly two million bpd.

A transport explosion in the developing world and the lack of a substitute for gasoline and diesel means efforts to reduce dependence on fossil fuel are likely to fail, with oil expected to keep its 40 percent share of primary energy consumption over the next 20 years.

``The projections outlined here point to a fossil fuel future, a continued strong role for oil as a transport fuel and a further expansion of international oil trade,'' says the paper.

``Governments will need to take much tougher action than has so far been the case if they are to succeed ... in achieving the ambitious environmental goals that some of them have committed themselves to.''

The paper says transportation growth implies a continued shift in oil demand toward lighter oil products, especially aviation kerosene, gasoline and diesel fuel.

``The main consuming regions, including the OECD and dynamic Asian economies, will become considerably more reliant on oil and gas imports,'' it says.

Asian tiger economies are forecast accounting for 45 percent of the 39 million bpd of growth to 2020. Oil demand growth in China alone is seen surging by seven million bpd.

Nevertheless, the IEA believes that with enough investment in the leading producing regions of the Middle East supply capacity should meet demand.

``We do not expect a global supply crunch,'' the paper said.

Reliance on Middle East OPEC production will intensify.

``The key will be for them to attract sufficient, sustained and timely capital investment,'' the paper said of Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates and Qatar.

Oil exports from the Middle East are set to more than double from 17 million bpd in 1997 to 41 million bpd by 2020, it added.

http://www.siliconinvestor.com/headlines/financial/20001118/252971.html

-- Martin Thompson (mthom1927@aol.com), November 18, 2000