At the 21st World Petroleum Congress in Moscow, Russia, ExxonMobil Chairman and CEO, Rex W. Tillerson spoke about meeting future energy challenges and the role industry and the government must play. Below are some highlights from his speech.
The humanitarian dimension
‘First and foremost, we must recognise that the global need for energy is project to grow, and grow significantly. ExxonMobil projects that increases in population, along with growing trade and development, will increase global energy demand by about 30% between now and the year 2040. To put this number in perspective: It will be like adding more than the combined current energy demand of Russia and India, all of Africa, Latin America and the Middle East.
‘We must also recognise that the vast majority of this growth in population and energy demand will take place in developing economies. These fundamental facts mean that every discussion of energy and energy policy has a humanitarian dimension.’
‘The key to lifting people out of this poverty, and to increasing hope and opportunity for billions, including those yet to be born, is to expand the supplies and availability of modern sources of energy. Simply put, the global need for energy we see today, and the growth in demand we anticipate in the decades ahead, will require the world to pursue all sources of energy, wherever and whenever they are economically competitive.
‘In addition, there is a second element to every discussion of energy and energy policy: We must pursue strategies that reflect wise environmental stewardship. This means we must invest, innovate, and relentlessly advance the technologies and techniques that promote energy efficiency, improve environmental performance, and reduce the greenhouse gas and air pollution emissions associated with increased energy use.’
Reasons for optimism
‘The good news is that our industry has proven, throughout our history, that we can expand supplies in safe, secure, and environmentally responsible ways. Because of our investments, innovations, and cooperations, we can point to extraordinary successes. Over the last three decades alone, we have taken on deepwater and ultra deepwater challenges, we have developed new techniques to unlock unconventional oil and natural gas, and we continue to expand on our historic achievements in the Arctic and sub Arctic to provide the energy the world needs.’
‘In less than a decade, the modern energy map has been rewritten by technological breakthroughs in North America. Our industry’s integration of hydraulic fracturing and horizontal drilling has made it possible to develop North America’s shale gas and tight oil, bountiful resources found in dense rock formations.
‘Consider that between 2005 and 2014 alone, US production of crude oil and natural gas has risen by close to 70% and 45%, respectively, which reflects growing tight oil and shale gas production. With this newfound abundance, North America is reminding the world of the fundamental importance of energy and the extraordinary contributions our industry can make in individual nations, and individual lives.’
‘New sources of oil and natural gas are driving US economic growth, supporting millions of jobs, and spurring significant gains, and expansions, in manufacturing. In addition to these economic benefits, abundant and reliable natural gas has helped reduce US carbon dioxide emissions to levels not seen since the 1990s. Even more remarkably, it has been achieved in an economy that is 50% larger than in the 1990s with 50 million more energy consumers.’
‘For the world, new supplies of oil and natural gas in North America will provide diversity and flexibility to the global energy portfolio, and demonstrate that our industry has taken a leadership position in environmental stewardship.’
‘The strategies of the future must reward long term planning, sustained investment and constant innovation. No matter where our industry goes in the world, we will need new technologies to expand supplies and enhance environmental performance and protection. Whether we seek to expand global supplies of energy in North America, South America, Africa, Asia, Europe, or Australia, the most effective path to investment and innovation is for government and industry to understand their specific roles and responsibilities.
‘Our industry respects the role of government. We recognise that government is uniquely suited to promote the rule of law, provide a clear regulatory pathway, and hold companies accountable. In addition, government is critical to establishing the level playing field that enables companies to compete, and consumers to win. In short, government leaders are responsible for putting in place the sound and stable regulatory and tax policies that enable investment, cooperation, and risk management to flourish. And only that foundation can ensure there is incentive for industry to invest in the research, development and deployment of evolutionary and revolutionary technologies. To meet the energy challenges of the future, our industry must maintain its positive role in public dialogue.’
‘The US unconventional revolution has shown that we can expand supplies and reduce air pollution and carbon emissions. With sound policies, our industry can apply new technologies and techniques to unlock cleaner burning natural gas all around the world. As we do so, we can meet growing energy needs, while reducing emissions levels. And with sound policies industry can continue to develop technologies to produce and use oil more efficiently, especially in the transportation sector where growing energy needs are so critical to trade, work and advancement.’
‘The oil and natural gas industry will continue to play an essential and pivotal role in shaping the world’s future. And indeed, even at a time when challenges have befallen some important producing areas, the industry at large, both non-OPEC and OPEC players, has contributed in the reliable supplies to consumers the world over. With government and industry fulfilling our respective roles and responsibilities, we can help alleviate poverty, raise living standards, and create economic opportunity for billions of people. And by continuing our industry’s dialogue with the public and policymakers, we can put in place energy policies that enable investments and technological advancements on every frontier and in every sector. Such long term strategies will help government, industry and society each play its part in building a brighter future for all in a growing world.’
Edited from speech by Claira Lloyd
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