To understand the best policy course for harnessing not hindering the strength of the energy industry, it is important to understand the realities governing the industry – and the energy future we must face together.
First and foremost to grasp is the fundamental fact that global energy demand is set to grow – and it is going to grow significantly. As the International Energy Agency – along with almost any think-tank or government forecast – predicts, the world's total energy demand will be significantly higher, about 35 per cent higher, in 2030 than it was in 2005. And that's despite the current global economic downturn.
Such energy demand growth is actually good news. In developed nations, it promises greater access to the technologies and services that sustain our prosperity. Advanced computing, improved transportation, expanded communications, cutting-edge medical research and other modern advances rely on ready access to affordable and reliable energy sources.
For developing nations, energy offers something even more fundamental. It represents hope and opportunity. Energy means expanded industry, increased trade and improved transportation – all of which create jobs that help people escape poverty. For rising nations, affordable, reliable energy is also vital to building new homes, schools, hospitals, and sanitation systems that can improve and save lives.
This brighter future presents a challenge, however. To meet this enormous and growing demand for energy, the energy industry must operate at a size and a scale and over a long time horizon that for most people is difficult to grasp. The world currently uses the equivalent of more than 230 million barrels of oil per day to fuel transportation, generate electricity, run farms and factories, heat, cool homes and more.
Not only is this an enormous challenge in terms of scale, it demands long-term planning horizons. Time in the oil and gas industry is not measured in business cycles – and it's certainly not measured in election cycles – but in generations.
Taken from a speech by the chairman of Exxon Mobil to the Economic Club of Washington, DC, earlier this monthReuse content