Global Energy - The Next Decade And Beyond, By Arthur R. Green, #70012 (2005).

Modern civilization, a growing population and globalization will become increasingly more dependent on access to large volumes of oil, gas, coal, industrial materials and water at reasonable costs.

Oil and gas supplies ~65% of the world’s energy (80 mb/d and 220 bcf/d gas; by the end of the decade it will be 90 mb/d and 280 bcf/d of gas). Renewable energy, excluding hydroelectric and nuclear, represent about 2% of production worldwide.

The geography and geopolitical setting of both production and consumption of oil and gas and petroleum based products is evolving toward fundamental change.

The peaking of conventional oil and gas production is sure to happen, and while the timing is uncertain, there are signs of change on the horizon. Enhanced oil recovery efforts and developing heavy oil and tar deposits will stretch supply.

Increased gas production will become more important and the required transport and facilities infrastructure will require huge up front investment.

The modern energy industry has experienced many discontinuities and has evolved to meet the challenges. The next stage of the energy business will be its greatest challenge as corporations try to meet the never ending demand for new sources of oil and gas as old fields are depleted.

These changes in the global energy balance have the potential for geopolitical (Nations) environmental, economic and security disruptions worldwide.

Recognizing and facing energy realities, learning from history and developing an integrated plan is critical for an industry that requires lead times of 10-15 years. Such a plan must include international relations - trade, global, economics, massive up front investment, innovative science and applied technology (Industry - Academic - Government).

I am optimistic about our energy future and the leadership that will be furnished by science and creative technology in a world without walls. The plans and operations must be conducted within the context of the environment of our beautiful planet and its wealth of creatures large and small.

Factors Driving Global Energy

(Figure 1)

Energy Dynamics, Opportunities, and Challenges

Speed, Volatility, Performance, Ethics, Networking, Wisdom

Figure 1. Factors driving global energy.

Global Geopolitical and Economic Environment

Representative Governments

Global Economy and Relations

Trade - Regulations - Blocks

Security - War - Terrorism

Energy Consumption and World Banking and Investment

Business Operations

Energy Discovery and Production

Trade - Transport

Refining to Products

Job Creation

Gross Domestic Product - GDP

Company Vitality - Research and Investment

Science and Technology

Knowledge

Innovation - Creativity

Information Systems - digital

People - Human Technology

Education - Skills

Population Demographics

Prosperity vs. Poverty

Emotional Maturity

World Peace and a Sustainable Environment

Discontinuities in Energy: Past, Present, and Future—

An Historical Perspective of Dealing with Change

Figures 2-10

	Figure 2. Petroleum industry time line, showing the eight phases of the petroleum industry.
	Figure 3. Early references to petroleum (from Bilkadi, 1995).
	Figure 4. Oil Creek - Pennsylvania, 1865. George Bissell, father of the oil industry, was a New York lawyer, who arranged for the initial financing to explore the Oil Creek area for oil, from which a high quality illuminant could be distilled.
	Figure 5. Old Baku: Bibi-Heybat oil fields in the South of Baku, circa 1910s (picture courtesy of the State Archives of Azerbaijan Republic - Photo and Cinema Department).
	Figure 6. Global Exploration: Field parties, Brunton compass, as a significant mapping tool, and 1924 geologic map of Northern Peru (ExxonMobil archives).
	Figure 7. Montage of geologists conducting field work, well-site workers, and log analyst.
	Figure 8. Lake Maracaibo, Venezuela, with facilities in the early part of its production history.
	Figure 9. Mud volcano, Azerbaijan, where commercial production was established around 1870 and where Baku was the largest oil field in the world around the turn of the 20^th century.
	Figure 10. Normandy beach, D-Day, 1944, with tremendous requirements for petroleum products.

Return to top.

The Eight Phases of the Petroleum Industry (Figure 2)

Roots of the Petroleum Industry (Figures 3, 4, 5, and 6)

Years of Discovery (Figures 7, 8, 9, and 10)

Post World War II

(Figures 11, 12, 13, 14, 15, and 16)

Figures 11-16

	Figure 11. Factors driving post World War II global energy.
	Figure 12. Oil for a world at peace (from Oil for Victory, 1946).
	Figure 13. Theodore Link, legendary petroleum geologist, also AAPG President 1955-56, demonstrating the application in the field of basic tools.
	Figure 14. Creole Field, Coast of Louisiana (from Wasson, 1948).
	Figure 15. The marine challenge, as illustrated by the environmental conditions encountered during offshore exploration and production.
	Figure 16. Plot of oil price, oil demand and discovered volumes, with and gas demand and discovered volumes (in billions of oil-equivalent barrels / US dollars--relative numbers, from 1900 to 2020).

Global Geopolitical & Economic Environment

Surge in Demand

US becomes Net Importer

Winds of Nationalization

Geopolitical Restructuring

State of Israel Formed and Colonies Fall

Marshall Plan

Cold War 1947 - Korean War 1950 - 1953

Stock Market (DOW) Reaches 500 Milestone in 1956

Population Inflection

Business Operations

Aggressive Global Search and Discovery

On-site Geologic and Engineering Investigations

Reestablishing Global Reach Limited to "The Western World"

Increasing Flow of Oil & Gas and Refined Products

ARAMCO Restructured

Companies Reorganized

Science - Technology - Knowledge

(Data - Information - Knowledge - Wisdom)

Revolutionary Advancements from War Years - High Octane Fuel, Butyl. Rubber, Lubricants

Direct and Indirect Impact of Technology

Technical Leadership in Academia, Government and Industry

Corporate Research Centers - Upstream and Downstream Enlarged

1st Offshore Drilling

Scouting - Global Information

Human Technology

"Experienced" Staff

Inventive "can do" Attitude

Global Maturity

Travel and Communication Advances

Training - Schools and Mentoring

Post Embargo / 1973 - 1980

(Figures 17, 18, 19, 20, 21, and 22)

Figures 17-22

	Figure 17. Factors driving global energy in post embargo (1973-1980).
	Figure 18. The self-organizing earth machine (Source: Harvard).
	Figure 19. Dynamics of planet earth (after Kellogg, 1999; Morse, 2001).
	Figure 20. Mediterranean earth tomography (from Bijwaard, Spakman, and Engdahl, 1998).
	Figure 21. Eustatic Cycle Chart #1—Phanerozoic (ExxonMobil Research)
	Figure 22. Sequence Stratigraphy A. In depth. B. In time. LSF=Lowstand fan, LSW=Lowstand wedge, HS=Highstand systems tract, TR=Transgressive systems tract, MW / SMW=Shelf margin wedge, CS=Condensed section. (P. R. Vail / Exxon Research Production Company.) (After Vail, 1987.)

Return to top.

Global Geopolitical and Economic Environment

Nationalizations - Embargos (1973)

OPEC becomes a Major Force

Intense Cold War - Vietnam War Ends 1975

Oil Prices Increased 4x

Gasoline Shortages

Inflation Increased Sharply

Iran Hostage Crisis (1974)

Nixon Resigns (1974)

Stock Market Plunges (1974/75) Stagflation - GDP Dropped

Business Operations

Major Discoveries and Production come on line

New Global Offices Established by Industry

Oil & Gas Operations in USSR Surge

S.E. Asian Businesses Rise

Nationalization of oil properties

Science - Technology - Knowledge

Dynamic Earth Model - Applied (Regional) Projects

Research Centers merged (Carter- Humble)

Seismic Reflection, Stratigraphy and Attributes, 3-D

Seismic Data Processing

Sequence Stratigraphy

Micro - Paleo Develops Rapidly

Gravity and Magnetics

Satellite Imagery

Drilling begins move to Deep Water

Refining Advancements

Computers - Micro Chips

Human Technology

Staff Increases in Size and Experience

Extensive School System Develops at Research Lab.

Travel and Communication Surge

Integrated Regional Projects

Six Major Factors in Energy Planning

Only One Energy Event was Arguably a Real Crises

A Turning Point: THE 1973 OIL EMBARGO.

Some of What happened in the U.S. (from Robert L. Hirsch, Senior Energy Program Advisor, SAIC -- February, 2004) (rlhirsch@comcast.net).

· Oil prices increased ~ 4.5 x (Saudi crude)

· Gasoline rationed (even / odd days)

· Gasoline lines and spot shortages

· GDP dropped two years in a row (recession)

· Interest rates spiked dramatically upward

· Inflation increased sharply

· There was a huge wealth transfer to OPEC

U.S. Actions Resulting From the 1973 Oil Embargo (from Robert L. Hirsch, Senior Energy Program Advisor, SAIC -- February, 2004) (rlhirsch@comcast.net)

· Price controls enacted

· CAFÉ implemented

· Higher efficiency mandated in a variety of sectors

· National speed limit (55 mpg) enacted

· Domestic oil & gas exploration & production spiked upward

· Federal energy R & D dramatically increased

· A major effort in synthetic fuels initiated

· Windfall profit taxes levied

· U.S. government reorganized to form ERDA, FEA & FERC

· IEA formed

· Strategic Petroleum Reserve established

· Formulation of a coherent national energy policy initiated

· Foreign policy adjusted to new realities

Recent: 1995-2001 (Figure 23)

Figures 23-27

	Figure 23. Factors driving global energy, 1995-2001.
	Figure 24. From irrational exuberance to infectious greed, with a plot of Dow Jones Industrial Average and S&P 500-stock Index, along with quotations from two Alan Greenspan speeches (The Wall Street Journal, July, 2002; Source: Thompson Datastream for chart data).
	Figure 25. Merger acquisitions: deals closed / pending 1/1/98 to 2001, with estimated values.
	Figure 26. Top oil companies’ workforces (as of September, 2001). Table showing increased effectiveness and productivity.

Conclusions