Yet in order to be able to cope with the challenge of the growing energy demand, fueled by growing prosperity, proper incentives and right environment to attract investments in the sector are a must, speakers on the first day of the 21st World Energy Congress emphasized.
At current production rates, Saudi Arabia has reserves for more than 80 years of sustained production, Khalid A. Al-Falih, the President and the CEO of Saudi Aramco, reassured the world. He further added that Aramco’s capability went even beyond, as it was expecting to increase its current reserves of 260 billion barrels by an additional 40 percent and was endeavoring to raise the rate of recovery from its major existing fields to 70 percent -– twice the world average. However, warning the global energy leaders of the discriminating against select energy resources, Al-Falih questioned the very logic of almost four-and-a-half percent per year on average growth in the global coal consumption in this decade as against just one-and-a-half percent growth in oil consumption during the same period.
This was all the more beyond common logic especially since attention to climate change and global warming was on the increase, Al-Falih underlined in a characteristic blunt manner. And he had a point. With two billion people with no access to modern forms of energy and while another two billion only enjoying limited access, the world needs lot more energy than is available today. And selective discrimination against oil –- hurts this global objective. Changing life styles and the addition of yet another two billion people by the middle of the century meant the world would continue to rely on traditional fossil fuels for most of its energy needs for the coming decades. The contribution of the alternatives, will grow -– albeit slowly -– he argued and in absolute terms, the demand for fossil fuel would only go up. However, the selectivity against oil may thwart investments in the sector, the Aramco CEO hinted in a rather oblique manner. Saudi Aramco has also allocated hundreds of millions of dollars to a CO2 enhanced oil recovery demonstration project that could boost oil production by injecting into the reservoir CO2 that otherwise would have been emitted into the atmosphere. “This technology not only protects the environment through carbon capture, but also boosts energy by enhancing ultimate recovery rates from (existing) oil reservoirs,” the Aramco CEO said underlining a win-win strategy.
Earlier, while highlighting the challenges faced by the energy world, and setting the tone for the day, eminent energy guru and IHS Cambridge Energy Research Associates chairperson, Daniel Yergin, said global energy demand would rise as much as 40% in the next 20 years.
With the global economy projected to grow to $120 trillion by 2030 from the current $62 trillion, the demand for energy is going to grow exponentially.
“In our scenarios for the future we expect by 2030 to see growth somewhere between 30% and 40% off a much larger base in demand. That’s a very large number,” he told the World Energy Congress in Montreal. And this required timely deployment of assets as energy industry has a particularly long lead time, he underlined.
“Demand for energy has been growing. It has already grown by 40% since 1990.
“Between 1990 and 2010, about 1.4-billion people were added to the list of countries that enjoyed per capita income of higher than $10,000.
“In the next 20 years, we expect to see about three billion people moving into that range of $10 000 — 30,000 per year of income. That will have an enormous impact on energy demand.”
In a world of surging demand, we need to mobilize the world’s entire mix of energy resources, unless indeed we want to risk condemning billions of people to energy poverty, underlined Peter Voser, the CEO of the Royal Dutch Shell plc.
While there seems to be a talk of a gas revolution taking place in the world, with a glut in sight, Voser felt gas in the form of LNG will be required in still larger quantities in growing and emerging markets, Thailand, Singapore, Pakistan, besides indeed China and the traditional markets in Europe.
He said hydrocarbons are here to stay.
