 as well. So this is an on-the-record session. By design we want to make sure that we allow at least 10 minutes for Q&A at the very end. It's great to have so many high-level participants in the first and second row, and we invite you to pepper our panel with questions. Welcome to the 2018 CNN Money Roundtable. This is the third year in a row that we've decided to put our spotlight on energy, because there is such great interest in the subject. I wanted to bring up a graphic of Norsi Brandt going back to Davos 2016. Some of those that are sitting in the audience know exactly what I'm talking about when we felt that period there at January, third week of January 2016 when we touched on Brandt $28 a barrel, WTI went down to $26 a barrel, and we've had some fits and starts, but if you look at the end of December 2016 after the alliance and agreement by OPEC and non-OPEC producers, the trend line has been up, and then you get to the end of 2017 again, the renewal of the agreement for another 12 months, so better than 20 producers signing on the dotted line to continue. There were plenty of naysayers out there, but this was a fundamental shift to where the mentality is in terms of collaboration between Saudi Arabia and Russia and bringing the other producers into a very solid agreement, but there are implications, and the kind of three major themes to focus on this evening is whether the Saudi Arabia-Russia alliance can stay glued together for all of 2018. Number two, will the United States, according to the Energy Information Administration suggests, have that production surge throughout the year, maybe from 9.8 to 10.5 million barrels over the next 12 months? And finally, we have a roundtable discussion tomorrow on the great energy transformation. The amount of money that's going into the renewable space is averaging about $300 billion a year, but is it enough to start disturbing demand for crude and natural gas over the next 10 years or not? We have a whole range of predictions, so it would be terrific to hear from our distinguished panelists. Before we do so, I wanted to run some sound from two roundtables that I was conducting in Abu Dhabi last weekend at the Atlantic Council. We had the Arena General Assembly, which is renewable energy, and finished at the World Future Energy Summit as well. Broad-ranging topics looking at the transformation that I was talking about. We have a clip here from the Minister of Energy from the UAE, Suhail Mazrui, and also the Minister of State for Petroleum Resources of Nigeria, Emmanuel Kachaku. Let's take a listen to what they think about the agreement that was signed at the end of 2016, and then we'll bring our panelists up. If we can roll that, please. We still have a little bit more than 100 million, if we believe, on the five years' average, to be removed. And until we do that, I don't think we should talk about the price going up. There is no need to panic, there is no need to do anything, even if the price goes 70 or a little bit above 70. For a day or a week, that doesn't mean that the whole year is going to be 70. Certainly there is a collective resolve to do whatever we can, collaboration, multi-tasking, relationship building, engagements, and obviously discipline in terms of the decisions that have been reached by OPEC to try and protect that. But I don't think the philosophy is going to protect a price. I think the philosophy is going to protect a business model. Business model, meaning we recognize the impact of shale producers, we recognize the fact that there is competition for market share. Okay, so the thoughts of Immanuel Kachaku and Suhail Parajal Mazrui. I thought that was very interesting with the Minister of State for Petroleum Resources in Nigeria suggested. We still have to look at the anticipation of the impact of the increase in U.S. shale production, and that's a topic, of course, we're going to address. Let's introduce each one of our panelists and give them a nice round of applause as they do come up for the third time running. We're great to have him at the center of our debate and appreciate his support. His Excellency Halid al-Fali, the Minister of Energy Industry and Mining at the Kingdom of Saudi Arabia. Mr. Al-Fali is right here. His Excellency Alexander Novak, the Minister of Energy of the Russian Federation. The U.S. Secretary of Energy and the former governor of Texas, Rick Perry. It's great to have you back in Davos. His Excellency Dharmendra, make sure I pronounce the last name. Pradhan, Minister of Petroleum and Natural Gas of India. And let's welcome back to the CNN Money Roundtable. Dan Jurgen, Vice-Chairman of IHS Market and, of course, the distinguished Osher of the Energy Business. Gentlemen, we have about 56 minutes, so plenty of time to debate. We want to save about 10 minutes for discussion from the very distinguished panelists. There's going to be people coming in because of the finishing remarks, as I noted before, from President Macron as well. And I think there's a few journalists in the audience that we should be aware of as well. There's going to be simultaneous translation for His Excellency Minister Novak, who's going to be speaking in Russian. So please have your translation devices near you, so you make sure you can pick them up from the very beginning. Thank you very much. I think it would be apropos if we can to start with Secretary Perry. You heard from Emmanuel Kachukou at the very end of his comment there saying, we have to look at the dynamics. We can't overreact as OPEC known OPEC producers and adjusting the agreement that's in place right now. But it's seen that shale and U.S. production, Mr. Secretary, could be the spoiler in 2018. Can we believe the estimates of going from 9.8 million barrels a day up to say 10.3 or 10.5 million barrels a day? That seems like it could be a spoiler. It's quite a step. But I think it's always important. I like to refer people back to a little over a decade ago. And he may have even showed up here in Davos, a young fellow by the name of Matt Simmons, who made a pretty good living traveling around the world, giving a speech, talking about peak oil. Fatih, you remember, we had found all there was and that was it. We needed to be transitioning and what have you. And I always try to remind everyone that technology and innovation around the world can really turn all of this on its head very quickly. I think, as it's done, to directly answer your question, I don't particularly think that it is going to be a spoiler, the American Shell production. And partly, as we were speaking earlier, that there's a lot of reforms going on in the world, certainly in the kingdom with what the Crown Prince is doing there. You think about Mexico and the reforms that are happening, Mr. Prothan, and what's happening in India. And I think that those reforms have the potential to really drive consumption, to drive innovation. So, you know, I'm a big believer that the best days are in front of us. What do you think of this idea, though, that because of the restrained production from both Russia and Saudi Arabia today, because of the agreement they've collaborated with, it allows an open door for U.S. production to surge. And do you agree with the numbers from the EIA today of going from 9.8 perhaps to 10.5? Partially because of demand, partially the market needs it. But are you in agreement with those numbers that we're seeing? Well, certainly, you know, I would like to stand here and tell you that the numbers are absolutely correct. My friend Harold Ham might say, well, you might want to take another look at those. But you know, the fact is the numbers are what the numbers are right now. But again, I don't get to spun up that the world economy cannot absorb what we're producing globally. Okay. I would like to bring up a graphic actually from the EIA. Not just to look at 2018, I think that would be incorrect if I did so. This is from the IEA looking at U.S. production going back to 2009. And all the way up to 2021. To be fair and clear, these are all U.S. products. We're not just talking about oil here. So over 7 million barrels a day to perhaps 14 by 2021. And that's all products here. Minister Al-Fale, that's pretty substantial. Does it keep the Kingdom of Saudi Arabia list a little bit worried about what we see in the market today? I think, John, you have to put it in context. If you go back to the 1970s, the U.S. production of crude oil approached 10 million barrels. If my memory serves me correctly, I was much younger back then. And the world demand and the global market was much smaller. And yet there was enough room for the rest of the producers. So for the U.S. to regain and even to exceed some of its market share in a much bigger market doesn't necessarily present a threat to other producers. I think you also have to look at this in the context of what is happening elsewhere. If you look at the Americas from Canada all the way to Brazil in the south with Mexico decline, Venezuela decline. You will find out between 2014 and 2017, despite all of the talk about shale and this revolution and the tectonic shift it's creating and game changer. The Americas production is actually flat within 100,000 when I looked at the numbers. This is over a period when there has been significant growth but decline elsewhere. So I think we need to think of the globe in totality. There is growth in demand of one and a half million barrels give or take over the last few years. We've grown since this downturn about five million barrels in demand. We're approaching the century mark of 100 million barrels per day obviously for the first time in history. And I don't see signs of significant slow down. That ultimately will need to slow down because it is a finite resource that we're talking about today. But it's going to grow at a healthy rate between a million to a million and a half for a few more years and then it will decline a little bit. So I am thinking that in the next 25 years or so we're going to see another 20 million barrels of demand. We're going to hit 120. I remember here probably in this room where one of my colleagues back then said we're going to peak at 95 million barrels of demand. And here we are talking about 100. So I don't think we should worry. Obviously the oil market is very sensitive to inventories. We saw that two years ago. And if we don't keep our eyes on the inventory we could go out of balance. And in the long term it's a very healthy market and I think we can accommodate the kind of numbers that are coming out of the U.S. even if they are as bullish as that chart shows. Aren't you getting lucky though to be honest with you because you had this huge disruption coming from Venezuela and some of the other Latin American producers. It's just fortunate as the U.S. starts to rev up that Venezuela is stalling horribly as an OPEC member because of the political dislocation there. If you didn't have that it would be a different game. Correct. But that's the nature of the market. I mean I think after Venezuela recovers and we wish them the best. They're a member of OPEC and we have good relationship with them. Somebody else unfortunately may start declining. So I wouldn't say that everybody is going to be on plan. And if everybody is on plan which is a good thing I think we just need to be careful about managing our production. I think leaving it free for all and just pushing production to the max. We tried it for a couple of years and everybody felt the pain. Certainly all of the producers felt the pain but in 2015 even consumers because of the secondary impact on demand for industrial goods, on the global economic indicators like deflation, like low interest rates. Even consuming countries were complaining about the state of the world industry and calling on us to do something that is good for producers and consumers. So together with Minister Novak, with OPEC, with other producers around the world we came together and we created a framework that required a little bit of sacrifice. If you want to call it this and cutting production between 3-5% amongst the countries and we've seen the recovery in the oil market to everybody's advantage. Let me follow up with Minister Novak then. I interviewed you right after the close of the meeting in Vienna on November 30th and you said if this price starts to creep up we may have to rethink what we've signed on to for all of 2018. We're almost at $70 a barrel for North Sea Brent. Do you think it's time to revisit and be a little bit more cautious and not leave a huge vacuum for the U.S. shale and traditional producers to take your market share? Thank you John. First off I'd like to follow up on what my esteemed colleagues said, what the ministers said about the shale oil. I would also like to cite a couple of arguments but I fully agree with everything they said. We should not be afraid of shale oil production in general in the general energy mix and in the general supply and demand on the market. As my friend Halid said we have 100 million barrels a day. This is the market demand as it stands today and shale oil is 5.7 million barrels of shale oil per day which is 5-6% even if they add 6 more million barrels by 2021 as you showed it on the slide. Well this will add 2-3% to the overall demand so you should understand that this is merely one way of satisfying the market. There may be many different ways of producing oil. There can be shale oil, traditional oil production, deep water shelf, arctic shelf. There are so many different ways. We should also bear in mind that every year to sustain the existing level even for that we need to restore our production at 4-5% from the existing level and this is a huge investment that the market demands. So we do understand that given a higher price certain project will become more profitable for instance such as the shale oil project in the United States. But we are not worried by it because we understand that over the long term we need to meet the growing demand. And apart from having losses that our annual production sustains we will need at least 10 years to increase our production so we need to ensure that projects are implemented to provide 20 million barrels of oil per day for the next 10 years and maybe another 10 million to cover the growing demand or maybe even more 20 million as Mr Alfalic said that he is expecting that in the next 25 years the growth is going to be up to 20 million barrels per day and this is a huge figure and we will have to put a lot of work into it and the deal that we have reached between the OPEC and non-OPEC producers that was concluded under the leadership of the Minister from Saudi Arabia and we had other non-OPEC nations on board. So this deal shows that the countries in order to achieve their goals and in order to balance the market they are ready not only to overcome economic difficulties but also political difficulties. It was really difficult to reach an accommodation. There were other political disagreements in place not economic but political in nature and the fact that 24 countries have reached this accommodation goes to show that this tool is efficient, it works and it can be used in the future. Finally, as far as the prices are concerned, we don't see the price today as the main criterion for achieving the results that we have enshrined in this deal. Our main objective and we have discussed it with the ministers that took part in negotiating this agreement, our objective is to remove the surplus from the market and this objective is slowly but steadily being implemented. We can see that the result is nearly enhanced and so all of our subsequent actions will depend on that but not on something that we see in a short-term perspective, higher prices perhaps. Although this factor should play a role and be taken on board but the key fundamental indicator is the surplus oil on the market and the supply and demand balance. Let's do a quick follow-up with you if I may. You're not overly concerned about the price but I know the Russian producers are worried about the volume that they're holding back off the market here to support this agreement with Saudi Arabia, your good self and the other OPEC and non-OPEC producers. Aren't you a seeding market share to the gentlemen to your left to let them kind of rev in for the sacrifice of the 24 producers that you're suggesting? Is it the wise strategy over the long or medium term? Considering that the overall balance is shifting and it's shifting for the better, we are emerging from this historic crisis that has dragged on for many years. And even if we consider the shale oil production, the overall balance is positive. And we can see that the demand exceeds the supply even in winter period even though we usually had higher risks because we thought the demand would be lower. But even during the winter period we can see that surplus is reduced on a weekly basis. We have seen this trend for the past several weeks so we believe that this situation is positive also for our economies and for our companies. Naturally every deal will run its course and will end at some point and will have to go back to a market situation. So we also believe that depending on the balance between supply and demand that the key would be fair competition when it comes to production, when it comes to downstream, both in the oil and in the gas sector. And in any sort of activity and so we are in favour of avoiding protectionism, we are in favour of fair competition whereby the consumers and the producers will have a win-win situation where the producers could meet the growing demand and provide enough supply. Thank you very much. Let's bring in Minister Pradhan. The Secretary of Energy was talking about your reforms. We see demand as Minister Al-Fali was suggesting rising to about 1.5 million barrels a day and it's been pretty consistent. A million of that by the way is coming from Asia itself and that would include India. How long does the demand for traditional oil and gas remain strong? You're almost importing 5 million barrels a day because we often talk about this energy transition. Minister Modi talked about the investments into renewables. Is this going to continue rising at this pace for the next five years? John, let me put some bare facts. How do we analyze IEA has some observation on our consumption? Today our consumption is around 200 million metric ton per annum. Today my refining capacity is around 247. IEA's observation on our market is by 2040 our requirement will be up to 500 million metric ton. We know the emerging technology on renewables and India is heavily, Prime Minister Modi is very focused on one area. We have positioned ourselves. We'll add on 175 gigawatt of renewable energy by 2022. We have to have a balance in our own basket. I can predict for the next 20 years India will be depending on conventional energy, the fossil fuel, hydrocarbon. All our reliable partner in this journey starting from Kingdom, Russia. And recently we have started receiving the cargoes of sale oil from America. So we are depending. We are a consuming country. The next IEA's another observation on Asia specifically on India is for the next 25 years. The incremental requirement 25% of incremental requirement will come from India. Our growth, our per capita energy consumption is very low. We are a growing country. We are a developing country. We are a young nation. I'm a strong believer. My requirement is going to want to grow and sizeable of that growth will meet out by conventional sector. And I will continue to depend on this import and being a consuming country. I was listening to the different argument, the balancing. You use the term disruption. I will use the term the balancing, whether it is sale oil, whether it is our reliable friend from Kingdom. My expectation as a consumer will be the price should not pinch our domestic economy. We must appreciate more capex on exploration and production area. So the producing country also look into the interest of consuming country. This balance must be the final point, the main point of the production balancing. Okay, very good. What do your forecast show us, Dan, in terms of demand holding up? We are nearly 100 million barrels a day. We often talk about this onset of peak demand and I see a huge range of expectations. We know where Minister Alfale stands. Where is your head today in early 2018? I find it very ironic on the one hand this discussion about peak demand, which is sort of shifted into discussion about transition. On the other hand, we're seeing about as strong demand as we've ever seen in oil. And you kind of say this year, last year we added 90 million new cars. About 99% of them were gasoline powered cars. So in terms of when there's a peak or a plateau, at least based upon what we see today, it's not tomorrow. It's not next week. It's not next decade. Maybe it's around 2035, 2040 and it's going to be at a higher level than we are today. Okay. Would you agree with the minister that we're looking at a range of 120 million barrels a day? Yeah, we could be looking at that. And remember also on top of that, we have declines. So there's a lot of oil that has to be replaced. So there's a lot that has to be done to meet the demands of growing nations and the big consumers today. Let me put you on the spot a little bit here. Does the recovery that we're talking about in the United States spoil the rally? Because we've gone from 60 to almost 70 after the OPEC agreement, as you know, with the non-OPEC players at the end of November. It's so interesting how markets can change so quickly. Not so long ago, $60 was a target. Now it's a floor and it's really turned around rather fast. I think you look, we've never seen such bullish positions in the financial markets, which I think are certainly part of what's happening. So it's run up very fast. It's a market shift. But we'll see what happens over the course of the year, but probably not going to see prices remain like this for the whole year. What does that tell us? It's lower or higher if I can put you on the line. I know they're not going to remain exactly $69 a barrel. I think that's pretty good. It's not necessarily in that order. I think if nothing dramatic happens, I think we'll see this large shale component coming in. And it's maybe reasonable to think about it instead of a $50 to $60 world, a $60 to $70 world over the course of this year. $50 to $60 is a range you were suggesting. The other thing to remember is, or high 50s, remember, look at the optimism here in Davos in terms of the economy. Optimism is embedded in the snow. Oh, and that's because of the strong economy. So that's what's also driving the demand right now. OK. Have you pulled out, you were digging through your notes, Minister Al-Fale. What are your thoughts about the year? Can you protect 50 as the floor for 2018 or not? Protect what? The floor of $60 a barrel. I knew you heard me on that. I thought you said 50. John, I thought you said 50. You said 50, you scared me. No. You work so hard you don't want to give up 60, right? Actually, we didn't target 70. We didn't target 60. We, as Minister Novak said, we have a fixed target, which is to bring balance into the market. Inventories is the main indicator of that balance, as well as supply and demand being essentially in line. And we're not there yet. Price is an outcome and not an input. Price will be the outcome of reaching that balance market, and the market will balance around the price that brings enough investment flows, enough to meet the incremental demand that we've been talking about today, as well as to offset the decline. The combination of incremental demand and decline is upwards of 4 million barrels a year, year after year after year, and it goes more as shale takes up more of this lack, because its decline rates are higher than conventional oil. But that is going to require going back on investment. Investments used to be annually in the area of $700 billion four or five years ago. It's gone down by more than half. It's increased, I think, by 7%, 8% the last year. In 2017, we haven't seen a significant flow. So the price signals obviously are not enough for investors to start putting the kind of projects that will meet the incremental demand that we talked about and to offset the decline. And we need to give it time for that to happen. So this could be a boomerang, though, so if you're lacking the investment, we should be talking about a downward trend in prices with the new U.S. production surging. But a rise in a price if this investment doesn't trickle in in 2018? Well, the kind of investment I'm talking about are the long-cycle projects, which will take five to seven years to bring the fields on production. You know, the most bullish estimates are going to give you 500 to 800,000 year-on-year and I question the sustainability of that from geologic, from supply chain, from marketing, from outlet, from investment flows. Time will tell. But even if that happens, talking about four to five million barrel totality annually, comprising both incremental demand and decline, I don't think it's enough. So I don't lose sleep over it. I think it's necessary. We just need to be careful that we don't go out of balance for a few months and cause the glut to surface again and the markets to overreact. And that's where having the framework, you know, being a continuous framework between OPEC and our partners from outside OPEC so that we keep our eyes on the ball constantly and manage this market, this fragile market delicately and stay on course. Good. Do you have buy-in, as you were suggesting at the end of the OPEC meeting, for all of 2018? Are you going to have people in June of your membership going to look, you know, this price is too high? We should go back to the drawing board and ease back a little bit. I don't think people are going to complain about price. I think people may fear that the price will trigger slow demand and a flood of supply from the source we've been talking about, which is shale. We will have that discussion. I mean, it's a highly hypothetical situation. From what I've seen, and we just had a meeting in Oman with the member countries, everybody is focused on staying the course until 2018. We're going to have a week-long gathering in Vienna in June. We will review the monitoring committee report, the technical committee report, the OPEC secretariat. We'll look at the forecast from agencies like the IEA, the UICIA. We'll have a conference for the Vienna seminar. I mean, the OPEC seminar in Vienna. All of these will be good data sources for us to just see which direction we're traveling and make sure we're on course. But I think it's highly, highly unlikely that we will change and exit. I think that will be the time probably to fine-tune what is the target, what is an appropriate normal stock level. When we talk about five years, which five years? Because the running average five years up to 2017, for example, includes some pretty inflated inventories for the last two years. So I think we have to sit down and understand what the market needs in terms of inventory, set that target carefully, and then look at the trajectory for the second half of the year and start talking about a gradual smooth exit so we don't shock the market during the low-demand season in 2019. Okay. Secretary Perry, let me bring you back into this. This is a subject that Minister Alfali touched upon. A lot of people don't think, and when I had the chart up there going to 2021, the surge, but by 2025, the U.S. can't sustain that level of output. Give us a taste of what you think. Does it all peter out, and it's over-aggressive Americans just going after whatever they can in the time being, and then it starts to decline at the second half of the decade? I like to remind people of my remarks when I started and that we shouldn't buy into these terrible numbers that say, oh, 2024, 2025, we're going to run out of oil because the fact of the matter is that the technology that we may see in the pipelines, but I want to go back to talk about, feast is better than famine. And I recall famine pretty good back in the mid-70s and what it did to the global economy. And I think it's really important for the individual sitting on this stage and the fossil fuel producers and what we are doing, our countries are doing, what those producers are doing out there to give opportunity to the world, particularly in some of the countries that haven't had the opportunity to grow on the manufacturing side to the opportunities for their citizens, and that is a great and a good story. And I know it's interesting for us to sit here and speculate what the price of oil is going to be or the volumes are going to be, but I will suggest to you that for the global community and for the prosperity of the global community, it's very important for these countries, particularly these fossil fuel producing countries because that is what is going to drive our economies going forward. As we develop our renewables, as we look at the alternatives that are out there, whether it's nuclear and having that again be back substantially in the mix, but I think it's so important for the global community to understand that the fossil fuel producers and what they are making available for better quality of life and for opportunities are what I'm really interested in. And it's why that Minister Alfala and Mr. Novak and Pradhan and I were blessed to be in countries with a pretty substantial ability to deliver to the people of the globe a better quality of life through those fossil fuels. Good. You almost finished your answer, though. I just want to go back into you have the concern that because of the price we see today, the investment is flowing back in to the shale sector, but overall, that we see this surge up and then it declines more rapidly than it should. It's not being managed with the kind of the discipline we have here because it's a free market. So what happens over the next 12 years? To answer your question in a simple one word, no. I don't have a concern about that. And why not? Well, I don't have a concern about it because I think that the market has the ability to respond to this. And I think when we have a bit of a surplus is a bit more feast right now than we do famine, I think that's good for the globe. Okay, very good. Let me follow up with... Fatih Birhul just got re-elected as the Executive Director of the International Energy Agency, which is good news. He has a microphone. He's sitting in the front row to participate here. Give us a sense of the tipping point because we talk about peak demand, but when's the tipping point from renewable energy investment start to hit demand for fossil fuels? What are the IEA surveys showing us today, Fatih? If you can weigh in on this. And we had this conversation in Abu Dhabi as you recall in the three roundtables. We have it everywhere, this question, if you pick the one question. But before that, let me just mention something, some of the colleagues mentioned, the shared revolution. Is it real or not? Since some of the colleagues questioned the shared revolution's effects, as somebody since 2009 highlighted the shared revolution, it is possible implications. And I call it at that time, 2009, the silent revolution, in my view, which became very, very loud now, just two numbers. In terms of gas, shared gas, only a few years ago, United States was ready to import a lot of LNG. And today, United States is the number one gas producer of the world. This is a shared revolution. Number two, in terms of oil, I think the shared oil production today is about six million barrels per day. These are concrete barrels. And this is the reality. And I think if we can put U.S. together with Venezuela and Mexico to give a different picture, I don't think that it is a right analysis to understand the shared oil dynamics. Now, what it is not is the following. United States will not be the largest oil exporter of the world. Saudi Arabia and other many Middle East countries will continue to meet the growth in oil demand in Asia and Asia. Because all this oil production in the United States will be, bulk of them, will be used in the United States. And some of them will be exported, but the biggest exporters will say Saudi Arabia and other Gulf countries. Now, having said that, I believe shared relations coming and very strongly, and we will see more and more impacts of that in the next years to come. When it comes to demand, I mean, the electric cars discussion as colleagues mentioned, and the peak oil demand came at the same time, the debate. Now, to be honest with you, since 2014 when this discussion started, global oil demand increased more than 6 million dollars per day. And not only that, more importantly for me, the share of oil in the global energy mix also increased. So therefore, I do not see that the electric cars alone will lead a peak oil demand because the old cars today, passenger cars, constituted only 25 percent one-fourth of the global oil consumption. The growth is coming from trucks, from jets, from ships, and most importantly from petrochemical industry. So therefore, we believe that the oil demand growth may slow down, but it will still grow, so therefore we need the oil coming from all these three countries, from the US, from Russia, Saudi Arabia and others, to meet the growth in the demand and compensate the decline in the existing fields. So we shouldn't give wrong signals to the investors. Okay, Dan, in fact, if we look at the pace of disruption today that's taking place, and you just look at the digital disruption or an Uber that's in the market or the introduction of the smartphones over the last 10 years, are we going to wake up and say, boy, that panel was just really sleeping through a major disruption that the investment going into renewables is high, electric car introductions are going to be very strong. First of all, in terms of demand for oil, fuel efficiency standards are going to be more important for the next couple of decades than electric cars, I think. Secondly, you're confusing, or not you're confusing, but there's a tendency to confuse renewables and oil. With renewables, you're talking about wind and solar, you're talking about electric power, you're not talking about the uses of oil, and that's an important distinction to keep in mind. I think the third thing to, you know, and just to think how much this world has changed, as we're sitting here, I'm thinking how the world's changed. The minister Pradhan's home state was the first state in India to receive US oil. US is exporting LNG to India. Meanwhile, we've been wondering whether this cargo of Russian molecules of gas are going to arrive in Boston. It's about to arrive, not arrive. It's pretty amazing that that would be happening in terms of LNG. And just one other thing to keep in mind about how sort of striking this is, you know, Secretary Perry, Texas is not only a big producer of oil, but it's also the biggest producer of wind. But just to think what's happened in one state. Eight years ago, Texas was producing one million barrels a day. Today it's producing almost four million. If it was an OPEC, it would be the fourth largest producer. Yeah, indeed. You could put it into the ranks. So you don't worry about this tipping point because I think we're going to see, obviously, more investment. We're going to see an electric power system in the future where the investment looks like it's going to be large. Still, people are putting coal in, nuclear in Abu Dhabi. But we're going to see a tilt towards two things, renewables and natural gas in terms of electric generation. That's what looks ahead. Their cars will be more efficient. They'll be governments are pushing electric cars. But there are other things that are happening in the automobile fleet, too. There will be vehicles, ride hailing services. So it's a mixture of a lot of different things that's going to happen. And undoubtedly, in some ways, 10 years from now, the energy system will look a lot like it does today. And in some ways, it'll be looking, start looking quite different because it's always changing. In fact, though, I read, in fact, in an interview with the Stanford professor suggesting that in the U.S. market, you could have 40% of the fleet by 2030 being electric, particularly if we get the autonomous vehicles on. That number is just too big. It could be 40% autonomous or electric. It's not going to happen. The fleet is very big to begin with. On the world today, we have 1.3 billion. We'll have over 2 billion by 2040. And there will be electric cars in it. And maybe a growing share of autonomous will see how fast that really comes in. I was going to direct it into Secretary Perry, though, because in the United States, there's a lot of construction that's happening at a faster pace. What are your views on this in the introduction of the electric cars into the mix here? Well, I think it's really important. I think the technology, you're going to see a lot of focus on smart grids on autonomous cars. Electric is going to be a part of that, but I tend to agree with the idea that you're going to displace in the period of time that we've got combustion engine automobiles is a that's a bit of a fairy tale that's not going to happen. Now, are electric cars a good thing? And are you going to see a lot of focus on the development of them and the construction of them? Absolutely. I got to think that a couple of countries that are sitting up here on the stage may be really involved in that. Certainly, the U.S. is really involved in the development of electric. Battery storage is the issue for me that it's the most intriguing. It is truly the holy grail here and finding the answer to battery storage which our national labs are working on and very diligently and private sector partners working on that together. I just think the disruptive nature of the globe that we live in today and things that again, I go back to that peak oil thing that occurred a decade plus ago and I don't buy into that here is what the world is going to look like in five years or in ten years and that we have the ability to look over the horizon and see the future that clearly. It's exciting to be able to live in this world where there are many disruptions out there and that there's some bright young man or woman somewhere that's coming up with some ideas and things that we haven't even thought of yet. What's the level of the money going into renewables in India? Such a gigantic economy with population-wise with almost 1.3 billion people. If you look at your investment today and the reforms you're pushing, what's the level of investments you're dedicating now to renewable energy in terms of what Prime Minister Modi said yesterday? As you said 175 gigawatt of strategy we have planned out of that 60 gigawatt we have already producing we're investing a lot of in solar, in wind in the biofuel in the second generation ethanol in bio-CNG Ulshal yesterday Prime Minister Modi made a point we need new technology, we need low cost investment these are the challenges we have but I can cite one example few years back the per unit cost of renewable energy was few dollars today it is few cents this is the innovation, technology new capital, competition these are the area is creating a new model and with this kind of renewable intervention I also visualize still the conventional resource will be needed whether it is coming from cell revolution whether it is coming from conventional fossil fuel will be continuing to require it sizable, you are a net importer depend on import will be continuing on the market I want to pick off a couple of different items before we take questions from the floor number one is great interest in the IPO in the second half of 2018 I think Saturday Remco is looking for a $2 trillion valuation is this market agreement that we have with OPEC non-OPEC producers and this price range that we see $60, $70 make that valuation much more obtainable because the market seems to be very concerned about the level of price when it is applying the valuation to Saudi Remco Saudi Remco is a great company first of all in terms of scale in terms of capabilities in terms of what it can do that has been well proven for decades now and the company will be listed when the time is right we are ready from a corporate standpoint and also then a lot to prepare the nation also from a government to company relationship however the valuation of Saudi Remco is something for the markets to do it's not for either the company or the government of Saudi Arabia and all the speculation and the numbers are just that speculation I would though zoom out and talk about something which is not just relevant for Saudi Arabia it's relevant for all producers especially the big ones who have decades if not generations worth of natural resources below the ground that we want to get optimum value and the kingdom by current conservative calculations we have over 260 billion barrels of oil under the ground and Remco has an exclusive right to produce most of these and that will be of course codified through a concession agreement there will be a part of the IPO prospectus when it's issued but for the kingdom for the nation we're more interested in optimizing the value of those 260 billion barrels plus a few hundred trillion cubic feet of gas and making sure that the markets provide us the optimum value for those so the framework that we're talking about how to steward not only our natural resources within our borders not only how do we manage it not only how does the company operate and what is the framework and what is the contractual relationship with the state and what is the global framework within which we market the boom and bust the feast and famine that secretary Perry referred to has been proven to be destructive it's destructive for the industry it's destructive for consumers I'm sure Fatih Birol worries about this as much as we do and it's bad for jobs it's bad for consumers to plan with the fuel and the aviation industry or the shipping industry and fuel prices are we going to pay so we want to moderate that while living within a market framework while allowing the private sector to lead including a privatized or partially listed Aramco we want as policy makers as global citizens we also want to create a framework that hopefully will be lasting to optimize that value and within that optimum value for consumers and certainly from a selfish standpoint for the government and the Kingdom of Saudi Arabia Aramco will find its own fair and optimum valuation okay I sat with the Crown Prince at your investment summit back in October and we didn't make up the numbers of the 5% hoping to raise 100 billion dollars on a 2 trillion dollar valuation let's be candid is it too ambitious this is a young Crown Prince that wanted to set the tone have an international listing go for the top line listing and perhaps it's too ambitious or not I think first of all you need to look at Saudi Aramco listing within the context of a much wider reform agenda there is a privatization of state-owned enterprises there is a reaching out to the private sector both domestic and international to be part of the future that we're creating in the Kingdom of Saudi Arabia and there is also a determination to showcase the best of Saudi Arabia its people, its enterprises and certainly Saudi Aramco is on top of that list so I wouldn't talk about the valuation as a single target I mean it's important obviously we want to make sure that the investors that come in do recognize what they're getting into and do provide the right value but as I said as Royal Highness, myself everybody else who is involved realize that this is going to be a market determined process we cannot set what is the share price going to be of Saudi Aramco every IPO is a process of discovery of how the market perceives the value of the company and our company Saudi Aramco is going to be part of its valuation as the perceived value of oil so also coming to a common understanding and making sure people realize that this is the most precious commodity that has powered the global community to the development stage we're in today over the last 120 years or so and it's going to be with us for a long, long period of time perhaps a longer period of time as we as we consume these resources in an appropriate way and I predict that with time the value of the resources will go up and hopefully that will be taken into consideration against unfortunately some ill-advised commentary about oil nearing its end which is very, very destructive I think not just to the oil industry but I think to the interest of the global community. Okay a question to Minister Novak you're sitting next to a gentleman to the left of you that represents the United States there's sanctions on Russia as we speak how much is it hurting investment or is it standing as an impediment at all in the energy sector for Russia and do you hope you can get a breakthrough here off of those sanctions ? John I did not know what sort of questions you would be asking but I knew for sure you were going to ask me about this one everybody is interested in this one we are at the World Economic Forum and we are discussing the global economic problems that need to be addressed and when we talk about the sanctions sanctions do not enable one to address global economic problems one should understand that as far as we are concerned for Russia frankly because of these sanctions we it gave our industry a certain impetus additional impetus and we managed to redirect the flow of investments to reboot our enterprises to be perfectly frank it makes us slightly uncomfortable we have grown accustomed to living in a market economy we've grown accustomed to not seeing any interference with our businesses and now that the businesses have to look over the shoulders and look at the sanctions and think about whether someone who is following this is going to look at it in the wrong way obviously it makes us feel slightly awkward but in terms of investments in terms of a moral stance there are certain minuses in that but I believe that after all all of us have to strive to solve global problems of humanity to make sure that we meet the energy demand because you know about the figures that 2.4 billion people don't have access to regular sources of energy ordinary sources of energy and all of the largest energy producers should meet this demand we have to overcome the problem of lack of access that many countries don't have to technologies and there are many fine examples of our corporation in the oil sector we have shown together with those countries that joined the cooperative accommodation with OPEC this creates a positive economic agenda and the good mood that you see here at the World Economic Forum in many ways is predicated on the fact that the economy is growing and largely what accounts for it are the steps taken to balance the market to make the situation more stable on the market to create more possibilities to forecast the market situation to attract more investments and we have to state that this effect is there Mr. Barkindo is present here today he took a proactive part in this initiative and I can see that he is sitting here and listening to us I'd like to thank him very much for taking part in this processes we can implement such cooperation in many other areas when we finish this joint cooperation in terms of market balancing we already spoke with the colleagues we need to continue our interaction we see tangible positive results which we can achieve in our cooperation in developing bilateral networks creating new technologies that would enable us more to develop our markets one more thing I'd like to draw your attention to is that in the gas sector we have this cooperation in the framework of the forum of gas exporting countries where 13 or 14 countries get together that are members of this forum so they get together and discuss everything that happens in the gas market there are no agreements in place for action or market sharing but it is exceedingly useful and helpful the same thing needs to be done in the world sector as far as the gas sector is concerned since it has already been raised by my colleague from the left as you mentioned since we are sitting here together I believe it would be helpful because the United States for the first time in 2017 became a gas exporter so it would be very helpful if the United States could get on board in these consultations and discussions aimed at some positive results so we can develop the markets and create an enabling environment for developing these industries so together we could do a lot more so next year at this economic forum we could have the very same positive mood let's wrap it up with Secretary Perry and then we'll take a couple questions from the floor is that an offer you can take or is that be seen as collusion with the Russians certainly and I don't just mean a political issue but it's also an antitrust issue so how do you handle it? we live in a competitive world I think if one of the reasons that there's I'm certainly glad that the professor asked us to come to participate I'm very excited that President Trump is going to be here tomorrow to address all of you and the world I think one of the things people are interested in is when the administration talks about America first what does that mean and I'll suggest to you I can tell you in one word it's competition that the United States wants to be competitive that when your country is looking for a place to purchase LNG that you think about America first and it's that competition that we have together and I think it's important that we have rule of law, that we have transparency and our dealings and what have you we're not always going to agree there's going to be times that we're in conflict with each other but in the grand scheme of things sitting on this stage being partners being part of the fossil fuel producers of the world and it's very important that we find the places that we can work together when I think about these two countries and the competition that we've had before but I also think about the places where we work together the United States is on we come to Russia and you help us put our astronauts into space and there's these opportunities to work together to find I think the future of the world is bright I think part of that brightness is because of the competition that we have between our countries but at the end of the day we are part of this global community and working together for a better future for the citizens of the world is really what we're all here for thanks, do you want to take any questions? we'll just be really quick and then we'll get a microphone to you and we'll go for five minutes on the questions my question is to Minister Al-Falih and Secretary Perry and it's about the reputation of the industry we've heard a lot about the reality here about how oil is still a very important and growing part of the mix about how the rise of natural gas in the U.S. not only being economically beneficial to emissions to the lowest in 25 years and countries that have tried to sideline it like Germany have had rising emissions but the man in the street doesn't know that this month the city of New York sued the five oil majors for the damage caused by the hurricane and the New York Times editorial page praised that and John I'm afraid CNN isn't immune I saw last night your new eco program you said dirty fossil fuels and you had a picture of a gnawing donkey an oil well so I think OPEC may be not communicating well enough we as the industry the private sector are certainly not communicating the role of our product but what about government's role in really explaining to the public the importance of oil and gas and that not all fossil fuels are the same thank you very much let's have Minister Al-Falih is that an amazing precedent that they were going to sue oil companies Aramco wasn't on that list but it's almost putting it in the syntax category of alcohol and tobacco to have institutional investors not invest in oil and gas does this even spill into the Aramco IPO if people are not buying them and that's the image well I'm sure whoever is suing would probably cry foul if they couldn't find gasoline next door as they tried to get to their car or the electricity was turned off because gas wasn't available so there is a lot of hypocrisy in some quarters and I think we have to realize that this is part of reality and the way to confront it I think is to work proactively and in a positive way rather than complain about it we in the kingdom of course have been working through the climate change community and the negotiations and the COP negotiations and we believe the Paris agreement brings the maximum balance we could get under the circumstances of accommodating fossil fuels recognizing that they are part of the clean fuel menu that will be given to humanity for decades to come the companies Saudi Aramco and other companies to work together and they created the OGCI alliance and it was announced in the United Nations climate summit and there is over a billion dollars of funds going into clean technologies mostly around oil and gas Aramco on its own is investing a significant amount of money and it's starting to make the news with breakthroughs and internal combustion that are going to create an order of magnitude improvement in efficiency and reduction in carbon intensity and this is done jointly with the auto industry and as a result the auto industry is starting to say hold on the petroleum based fuel transportation from well to wheel bases in many ways depending on where the electricity where is coming from is better for the climate than the alternative solutions on offer today Mazda was just in the news a couple of days ago talking about this so I think the way Majid to deal with it is not to complain to each other in places like this but to engage with the consumers, with industry with the public, with policymakers and to use facts and figures and to invest in technology to communicate especially to the young people because they matter the most Secretary Perry certainly the legal profession is always looking for a new and interesting angle this looks like a new one and an interesting one and I'll be one of the last people in this room to defend the New York Times so the point is this the United States is leading the world in the reduction of emissions I happen to have been the governor of a state the 12th largest economy in the world we're in a standalone country and I remind people we were at one time but the point is that during that period of time from the early parts of the 2014 emissions went down in that 12th largest economy in the world by some 60% in NOx some 50% for SO2 we saw the emissions going down we saw the carbon dioxide by 20% during a period of great growth and the story there is you can have economic development, economic growth job growth, improved quality of life and at the same time drive down emissions we also during that 14 year period of time led the nation in the production of wind energy we produce more wind in the state of Texas now than 5 countries those are powerful stories that need to be told around the world and the driving force behind the biggest part of that reduction was a transition from old inefficient power plants to cleaner burning natural gas and that is what we want to be a part of is what the fossil fuel industry wants to be a part of is new technologies being able to deliver to the world cleaner burning fuels because the fact is you're either going to have a world where people have to choose between keeping themselves warm or being able to have a job and that's not a option that I think any of us want and the fossil fuel industry will be one of the real drivers of that going into the future led by LNG as we see with you our surgeon experts I'm not going to be able to take the question from the floor but from one of our hosts here Minister I'll follow you to final remarks my final remarks is optimism you know the market globally looks good the economy as we've heard the last couple of days looks better than it has in more than a decade and that is going to drive prosperity around the world and that will spill into energy demand we need to invest in the supply side of the industry to meet it also technology is another part innovation that is happening around the world is accelerating and it's not going to slow down and it's going to provide some of the solutions that we're talking about about extracting more providing it with better environmental impact I would end just by putting back in context what my friend Fatiha Birol took out of context I was not disputing the amazing revolution of shale whether it's gas or oil in fact we're importing it into Saudi Arabia I was simply saying that in the overall global supply demand picture it's not going to wreck the train we should not be scared and I think you that's the core job of the IEA is not to take it out of context and what I'm observing as I read the weekly newswires commenting is there is an oversized focus on shale so if there is a news item that it's going up by 50 or 100,000 barrel this week or last month over the month before you see an impact on the markets by 10% perhaps sometimes or 5% so all I'm saying is at the end of the day as secretary as minister Novak said if it goes from 5% to 7% to 8% we welcome it we're working together and monitoring supply, demand, declines elsewhere just like we absorbed all of the deep offshore which came from not a dissimilar technological and industrial revolution of the 1980s this will be accommodated and absorbed in a growing demand and a well stewarded energy industry with policy makers like ourselves openly communicating, sharing information sharing data and taking appropriate action as in our perceived best interest great, nice start of applause for the panelists I appreciate all the input thank you very much my only apologies we couldn't take more questions from the floor but it was a great analysis, thanks very much