THE FUTURE OF THE GLOBAL OIL INDUSTRY

Petroleum powers the world's economies, but is there enough to meet surging demand as developing nations enter the consumer age? Current global oil consumption stands at 85 million barrels per day and is expected to rise to over 115 million BOPD by 2020. We have found the easy reserves already, and as demand and competition for known reserves rises, oil prices have risen to a sustainable level of $65-75 per barrel. Will prices go higher? Production in the mature sedimentary basins of North America, Europe and Southeast Asia is declining. The United States, with less than 5% of the world's population and only a few percent of the earth's proven oil reserves, consumes 25% of the world's oil and natural gas. Can this continue? Are we facing a supply crisis? The world has significant remaining conventional and unconventional oil and gas resources with some estimates exceeding 4 trillion barrels, more than has been consumed to date. However, global peak hydrocarbon production is likely to occur between 2025-2040. Then what? There is a solution to the looming petroleum supply crisis. This requires overcoming major technical, geopolitical, infrastructure, economic, capital and workforce hurdles. Improved recovery technologies and conservation will extend the life of known reserves in mature oil and gas fields. In the near-term, improved access to hydrocarbon prone areas such as ANWR and the North Atlantic will add to incremental production and help moderate domestic oil prices. Ultimately, new technologies will permit economic recovery of the vast quantities of hydrocarbons trapped in unconventional resources such as geo-pressured brines and natural gas hydrates. A serious commitment to developing affordable alternate energy technologies is essential, as by 2100, they are projected to supply fully 40% of global energy demand. The brightest intellects will be required to meet the challenge. Finally, public policy decisions that must be made to avoid a future petroleum supply crisis, require that the public and our leaders be better educated about the geosciences, and about the realities of energy supply and demand.