CERAWEEK-WRAPUP 2-Top oil user, producer agree on oil dominance

* Saudi Aramco, US agree oil will dominate transportation

* Saudi Aramco says concerned about "green bubble"

* Conoco CEO decries "hydrocarbon deniers"

(Adds comments from ConocoPhillips, Valero CEOs)

By Chris Baltimore

HOUSTON, March 9 (Reuters) - The world's top oil producer and consumer agreed on one thing when they took the podium at a high-profile energy conference on Tuesday: The world is unlikely to kick its oil habit anytime soon.

Representing Saudi Arabia, the world's biggest crude oil exporter, Khalid al-Falih told the CERAWeek conference that a head-long rush to develop alternative energy sources could lead to a "green bubble" akin to the boom-bust cycle that has hit the U.S. housing market. [ID:nN09240521]

Al-Falih applauded global efforts to develop cleaner energy sources such as wind and solar, but said that hydrocarbons would remain the world's primary energy source "for the foreseeable future."

U.S. Energy Secretary Steven Chu, representing the world's top energy user, issued a call to action on climate change before rushing back to Washington to attend negotiations at the White House. [ID:nUSCLIMATE]

"We still have this climate issue and eventually we will have to use oil in a cleaner way," Chu said. "It doesn't mean the end of fossil fuel."

Chu, co-winner of the Nobel Prize for physics, is a major proponent of clean energy development and formerly director of the Lawrence Berkeley National Lab.

Conference organizers had to rejigger the agenda to allow Chu to return to Washington in time to attend an afternoon meeting at the White House to discuss energy policy with President Barack Obama and a group of about a dozen U.S. senators on Tuesday afternoon.

Democratic leaders in Congress and the Obama administration have been pushing for legislation this year to cut greenhouse gas emissions by about 17 percent by 2020, from 2005 levels.

But an influential Democratic senator from a coal-burning U.S. state - Senator John Rockefeller of West Virginia - is seeking a two-year delay on rules for coal-fired power plants.

Jim Mulva, the chief executive officer of ConocoPhillips (COP.N), the third-biggest U.S. oil company, criticized U.S. lawmakers for writing legislation that gives few plums to refiners while giving billions of dollars worth of emissions credits to coal-burning utilities. [ID:nN09191976]

"We must overcome the opposition of the hydrocarbon deniers," Mulva said.

Last month, Conoco and BP Plc (BP.L) said they would drop out of a group lobbying for the U.S. Climate bill because proposed legislation would hurt the motor fuels and natural gas industries.

The House of Representatives narrowly passed a carbon-capping bill last year. Senators from Midwestern and southern states heavily reliant on fossil fuels, such as coal and oil, have not been able to strike a deal with northeastern and western lawmakers who could see their wind, solar and other alternative power industries blossom.

Chu said that U.S. industry needs certainty on U.S. carbon regulation to press ahead with needed investments.

"There's a lot of money sitting on the sidelines because we are in limbo," Chu said. "Time is running out and the train is leaving the station."

Meanwhile, the chief executive of Valero Energy Corp (VLO.N), the biggest U.S. independent refiner, said his sector could mount a recovery in 2011, after suffering abysmal profit margins in recent years.

"I look more for recovery in 2011, and this year to be a flat year," CEO Bill Klesse said. "The bottom line is there is too much capacity."

* TAKE A LOOK-CERAWeek energy conference [ID:nN08115804] (Additional reporting by Anna Driver and Erwin Seba; Editing by Marguerita Choy)