Shell remains bullish on long-term energy prices

By Alex Lawler

LONDON, Jan 29 (Reuters) - Royal Dutch Shell Plc (RDSa.L) expects energy to be expensive in the long term as the world tries to meet growing demand without harming the environment, its chief executive said on Thursday.

Jeroen Van der Veer was speaking after Shell reported a 28 percent fall in profit in the last three months of 2008 partly because of a collapse in oil prices to around $41 a barrel from a record $147.27 in the summer.

"If you skip 20 years to 2030, what I don't see is that energy will be very cheap," Van der Veer said on a conference call. "I think it is just the opposite."

"The combination for long-term energy...that you make sure it has an acceptable or better environmental footprint than today and it is very affordable, will be a tough combination."

For now, oil prices have collapsed as slowing economies erode fuel use. Forecasters such as the International Energy Agency, expect world oil demand to contract in 2009 due to the recession.

The Shell boss declined to predict whether oil prices had hit a bottom or when they would recover, saying only that there had been "very fast, huge pressure on oil and gas prices" in the "recession environment."

Shell has warned of constraints on long-term supplies as output in some regions levels off, saying last year that supply of easily accessible oil and gas probably will not keep up with demand by 2015.

"To supply the energy to the world -- and I take a lot of energy conservation into account -- is not an easy story," Van der Veer said. (Reporting by Alex Lawler; Editing by William Hardy)