World has plenty of crude: Exxon exec
Published: Tuesday, 12 September, 2006, 08:47 AM Doha Time
The ‘peak-oil' concerns have always been proved unfounded. Barely a third of the world's recoverable oil had so far been used, says Nolan
ADELAIDE, Australia: Predictions that global oil supplies will soon run dry are wrong and crude will remain the main energy source well into the future, ExxonMobil Australia chairman Mark Nolan said yesterday.
Nolan told the Asia Pacific Oil and Gas Conference here that the oil industry had to counter perceptions a world oil shortage was imminent to ensure politicians adopted sound long-term policies on energy issues.
He also dismissed the possibility of alternative energy sources replacing oil in the short-term.
Nolan said fears oil supplies were diminishing had existed for more than 80 years and always intensified at times when prices were high.
Oil prices have more than doubled in the past three years and reached a record of $78.40 a barrel in New York on July 14 amid concerns about supply disruptions from the Middle East and Nigeria.
These concerns had always proved unfounded, he said, arguing that barely a third of the world’s recoverable oil had so far been used.
“We in the industry know that the world is not in danger of running out of oil any time soon,” he said. “We hear all sorts of so-called experts predicting the end of the world’s oil supplies, or the end of what they call the era of ‘easy oil’.
“There has never been an era of easy oil – our industry has constantly operated at the technological frontier. Oil only seems easy after it has been discovered, developed and produced.”
Exxon’s view differs with that of so-called “peak oil” theorists, who argue that world oil production is at, or close to its peak and is set to fall even as demand continues to rise.
Citing figures from the US Geological Survey, Nolan said the earth had more than 3tn barrels of conventional recoverable oil resources, of which only 1tn had been exploited.
He said adding heavy oil and shale oil into the equation doubled the world’s total recoverable oil supply to more than 4tn barrels.
“We have reason to be sure that the end of oil is nowhere in sight,” he said.
“More importantly, however, we have a responsibility to communicate these basic facts to opinion leaders so that they can make sound, long-term policy decisions.”
Nolan said the ability of alternative energy sources such as nuclear, hydro, wind and solar power to replace oil in fuelling the world was limited by technical, economic and environmental factors.
“The simple fact is, considering the scale and long-term nature of our industry, there are no quick fixes or short-term solutions to the energy challenge,” he said.
He was sceptical about the ability of carbon trading schemes to reduce the carbon emissions blamed for global warming, saying only technology could provide a long-term solution.
Nolan also opposed a push by Australian sugar growers for the government to force sugar-sourced ethanol to be added to gasoline, saying the use of such additives should be determined by the market, not legislation.
“How commercially and environmentally viable is ethanol as a transportation fuel when you consider the energy needed to plough the field, sow the sugar cane, wheat or corn crop, harvest the produce, transport it to the ethanol plant and run the ethanol plant?” he said.
The oil and gas conference, featuring energy industry executives from around the region, continues until tomorrow. – AFP
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