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US gov't, industry see no alternative for oil soon

HOUSTON, Nov 21 (Reuters) - No single renewable energy product can immediately replace oil, but a combination of hydrogen, wind and agricultural by-products may be able to cut U.S. dependence on one of the nation's most-coveted resources in the next 10 to 20 years, government and industry officials said on Thursday.

Speaking at a conference on voluntary steps the oil industry can take to reduce climate change, the officials and executives said a mix of non-renewable and renewable energy products may begin to reduce the use of oil and its resultant pollution.

Renewable energy products are proven to reduce pollution and would help the United States reduce its dependence on foreign oil.

The conference comes amid a new report by the U.S. government that U.S. consumption last year of energy produced by solar, wind and other renewable sources fell to its lowest level in 12 years.

The U.S. government is spending $77 million a year for research on a hydrogen fuel cell to power cars, said Robert Dixon, U.S. assistant secretary of energy for energy efficiency and renewable energy.

"We're rather bullish on the prospect for a move to a hydrogen economy," Dixon said.

In addition to hydrogen from such products as natural gas to replace gasoline and other fuels, Dixon said U.S. government agencies are spending $100 million per year into research to develop fuels from "biomass," which is the waste produced from harvesting grains.

A mix of other energy products including solar and nuclear power will also be needed to replace oil as a source of energy, he said.

Shell Oil Co. sees natural gas as the most likely bridge fuel over the next 30 years while technology is developed to better exploit renewable resources, said Roxanne Decyk, Shell's vice president for corporate affairs and human resources.

Shell, the U.S. unit of the Royal Dutch/Shell Group of Companies, has invested $500 million over the past four years to develop renewable energy sources, Decyk said.

"The U.S. wind market is one of the most attractive markets to Shell," she said.