Thu, Dec 11, 2014 page15

• ExxonMobil predicts abundant oil, gas far into future

  ROBUST OPTIMISM: The fuel giant’s long-term energy forecast takes a dim view of greener energy generation while anticipating massive growth in N American output

  • AP, NEW YORK
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  North America, once a sponge that sucked in a significant portion of the world’s oil, will instead be supplying the globe with the fossil fuel and other liquid hydrocarbons by the end of this decade, according to ExxonMobil Corp’s annual long-term energy forecast.

  Additionally, the “almost unspeakable” amount of natural gas found in recent years in the US and elsewhere in North America will be enough to make the region one of the world’s biggest exporters of that fuel by 2025, even as domestic demand for it increases, Exxon chief strategist Bill Colton said.

  “The world has such an improved outlook for supplies,” Colton said in an interview. “Peak oil theorists have been run out of town by American ingenuity.”

  In a forecast that might make economists happy and environmentalists fret, Exxon’s two chief products, oil and natural gas, are to be abundant and affordable enough to meet the rising demand for energy in the developing world as the global middle class swells to 5 billion from 2 billion and buys energy-hungry conveniences such as cars and air conditioners.

  This is a result of advances in drilling technology that have made it possible for engineers to reach oil and gas in unconventional rock and extreme locations and quieted talk that the world was quickly running out of oil.

  It is despite what Exxon assumes will be increasingly strict policies around the world on emissions of carbon dioxide and other gasses emitted by fossil fuel use that scientists say are triggering dangerous changes to the world’s climate.

  PRICING FLUCTUATIONS

  Exxon’s outlook forecasts world energy supply and demand through 2040 and is updated every year. It is referred to by investors and policymakers and used by Exxon to shape its long-term strategy.

  Colton said the recent sharp decline in oil prices does not have much effect on the company’s long-term vision and that the company expects prices to rise and fall, sometimes dramatically, throughout the period.

  Exxon’s vision is broadly similar to that of other forecasters, including those by the International Energy Agency, which released its most recent long-term forecast last month. Demand for energy will grow rapidly in coming decades in the developing world, while demand in the developed world is expected to be flat or even decline as countries impose stricter emissions policies and become more efficient.

  The use of coal — now the world’s second-most important fuel after oil — will eventually slip as nations try to reduce air pollution and greenhouse gas emissions. Natural gas, which burns cleaner than coal and emits half the global warming gases as coal, is expected to supplant coal in the No. 2 spot.

  OIL TO DOMINATE

  Exxon takes a relatively dim view of the prospects for renewable energy generation. It believes that some of the aggressive targets for renewables cited by governments are too expensive to come to fruition and the technologies have not advanced far enough to make them cheap or effective enough for broad adoption globally.

  “They are just not ready for prime time,” Colton said.

  While Exxon expects wind, solar and other non-hydroelectric energy generation to grow faster by far than any other energy technology over the period, those sources will provide just 4 percent of the world’s energy by 2040, up from 1 percent in 2010. Exxon expects that fossil fuels will still dominate: Oil will account for 32 percent of world energy, natural gas for 26 percent and coal for 19 percent. Nuclear and biomass will account for 8 percent each, and hydroelectric power will account for 3 percent.

  OTHER VIEWS

  Michael Mann, a climate scientist and director of Pennsylvania State University’s Earth System Science Center, said that many experts dispute Exxon’s conclusions on renewables because in several places around the world renewable energy generation is competitive with the price of traditional power, even without a high price on carbon pollution that Exxon and others seem to agree is coming.

  Scientists say if Exxon’s vision comes to pass the world’s climate will become dangerous and chaotic, and some environmental economists suggest that economies will be forced to stop burning fossil fuels at such high rates to prevent catastrophic climate change.

  “Exxon’s vision of a fossil-fuel-driven future is one in which carbon dioxide levels rise well beyond the dangerous limit, where we will witness fundamental threats to food, water, land, our economy, national security and our environment,” Mann said. “Let us hope, for the sake of us and our planet, that this is not our future.”

  Other recent scientific studies suggest oil and gas companies and government forecasters could be overestimating how much oil and gas is accessible in the shale formations that have fueled the US boom in oil and gas production.

  Exxon government and public affairs chief Ken Cohen said the studies “are not consonant with the facts.”

  He says Exxon is finding instead that improving technology is increasing productivity of each well they drill.

  “Limitations are political and policy-related more than technical,” Cohen said.
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