Richard Vierbuchen GS '79, head of Exxon for Oil Exploration in the Middle East, spoke yesterday about the projected increase in demand for energy and oil in the next 25 years and how that need will be met.
The lecture, sponsored by the Global Issues Forum, comes in response to the recent public attention on energy issues. The U.S. Senate Committee on Commerce, Science and Transportation and the U.S. Senate Committee on Energy and Natural Resources held a joint hearing on energy pricing and profits Wednesday.
Vierbuchen predicted that the world's total energy consumption will increase by 60 percent between 2005 and 2030, from 205 millions of barrels a day of oil equivalence (MBDOE) to 334 MBDOE.
The main causes of this increased energy demand are economic and population growth, Vierbuchen said. "There is a clear positive slope of increasing income and quality of life and increasing energy," he added.
Switching to a focus on oil, Vierbuchen explained how reliance on the Organization of the Petroleum Exporting Countries (OPEC) will rise in response to a decrease in non-OPEC oil production around after 2015 to 2020.
OPEC will need to increase its current production of 30 millions of barrels per day (MBD) to about 47 MBD in 2030 to meet future demand, he said. In addition to yearly investments of over $200 billion will be necessary.
Vierbuchen addressed concerns that the resource base — the amount of recoverable oil in the world — will not meet demand, noting that estimates are always changing. Since 1950, the estimated resource base has increased from one trillion barrels to an estimated three trillion.
"As technology has improved since 1960, our expectations of what we can recover have increased," he said.
Vierbuchen said that today's oil production is decreasing while demand is increasing.
"Most of the world's increase in energy demand will occur in the developing world," he said. This will concentrate the global increase in carbon dioxide (CO2) production in developing countries.
"In fact," he continued, "it's predicted that the growth in CO2 production from the power-generating sector of developing countries in the Asia-Pacific region alone will be more than double the total growth of CO2 production from all energy sectors of the developed nations."
During the question and answer session after the lecture, Dustin Kahler '07 asked Vierbuchen to discuss Exxon's relations with countries in which it is interested in investing. "It all starts with us trying to understand what they're seeking to accomplish with their resources," he answered.
Vierbuchen said that most of the oil in these countries is the property of the state, and foreign companies like Exxon have the job of offering new technology and better organization. The country and company then share profits.
In response to another question, Vierbuchen addressed the recent public outcry over high oil company profits. "I hope the government and the public come to their senses," he said, noting that though Exxon Mobil has made a large profit, its returns are similar to those of other large companies, such as Microsoft.
Kahler, treasurer of the Global Issues Forum, said the group chose the lecture topic because of its timeliness, and invited Vierbuchen because "he sees the energy crisis as one of the main challenges of the century and so it is, and will be, relevant in all our lives."
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