CERAWeek 2011 begins in Houston today
3/8/2011 12:00:00 AM
In Houston, Texas, energy executives worldwide have gathered for the 30th CERAWEEK conference. Dr. Daniel Yergin, chairman of IHS Cambridge Energy Research Associates (IHS CERA), in his welcome remarks to the congress, emphasized that the oil industry is a long-term business. Accordingly, this year’s energy conference theme will focus on “Leading the Way: Energy strategies for a world of change.”
Much has changed since the first CERA conference. In early 1982, global energy demand was 58 million bpd (58 MMbpd) says Yergin. In 2010, global oil demand reached 87 MMbpd and will possibly reach 106 MMbpd during 2011. While there was some disagreement by attendees on oil demand topping 106 MMbpd in 2011, demand for oil and gas is increasing and is being driven by expanding populations and the rising standard of living by developing nations.
The oil industry is evolving under great changes. In 1981, the global gross domestic product (GDP) was only $11 trillion; GDP should reach $62 trillion in 2011. In another 20 years, the global GDP is forecast to increase to $120 trillion. Energy will play a significant role in this economic expansion, says Yergin.
Today is oil day at CERAWeek. Of course the underlying question throughout the day was, is there an oil shortage following the recent events in North Africa and the Middle East? Consensus from the morning presenters is that there is no oil shortage at this time. Christophe de Margerie, chairman and CEO of TOTAL and Farouk Al-Zanki, CEO of Kuwait Petroleum Corp., both agreed that Saudi Arabia has been most successful in moving oil supplies to more than compensate for the loss of Libyan oil from the marketplace. However, the rise in oil prices represents fear within the global markets.
John B. Hess, chairman and CEO of Hess Corp., emphasized the need for a US energy policy. Hess, shared that an energy crisis is coming and will likely be triggered by oil. While we are not running out of oil at this time, the industry is not investing enough to grow production capacity says Hess. In time, the present spare capacity will be erased by growing demand, thus triggering a significant downturn.
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