The recent political theater passed off as a US Congressional “investigation” into high energy prices makes one wish for a new play. It may have been boffo in 1973, but after a near 40-year run this one is getting stale, and by now everyone knows the plot.
Not much can be done about the characters — except to not re-elect them — but an injection of reality into the dialog might make it more believable. A good script doctor would be Chevron Corporation vice-chairman Peter J. Robertson, who related some unavoidable truths in his address to the Microsoft Global Energy Forum 2008 in March.
As Robertson sees it, “A global recession would have a dampening effect, but the world is still expected to use up to 50% more energy by 2030. Growing economies, especially in China, India and the Middle East, account for a good part of that increasing demand for energy.
“Our challenge is to squeeze even more from an energy system that already produces about 420 million gallons of oil equivalent every hour. That’s about 7 million gallons a minute, or 120,000 gallons a second. It took us humans 125 years to consume the first trillion barrels of oil. We’ll consume the next trillion in just 35 years.
“To meet that kind of demand, we’ll need to produce every molecule of energy we can, from every available source. This includes next-generation renewables such as biofuels, solar, wind and marine power. However, getting these next-generation renewables to commercial scale will require lots of work, investment, time and technology, just as it took years to develop our current renewable energy sources — geothermal, nuclear and hydro-electric power.
“Of course, the challenge will also include finding better and better ways to utilize fossil fuels — oil, natural gas and coal — which are expected to provide over 80% of the world’s energy for decades to come.”
For Rep. Edward Markey, these truths weren’t just inconvenient. They appeared not even to exist. “On April Fool’s Day, the biggest joke of all is being played on American families by Big Oil,” as his version of the Standard Populist Rant was reported by the Associated Press.
Dabbling in management of the global energy business — a skill for which he is not widely known — Markey wants the industry to invest 10% of its profits to develop renewable energy. You may ask why not 9% or 11%, but whatever the answer it most likely won’t contain enough reality to matter.
Speaking of reality, let’s return to it for a moment. Robertson noted in his address that that Chevron alone plans to invest US $23 billion to bring new energy supplies to market in just this year.
“Investing in energy supply isn’t new,” he said. “From 2002 to 2007, Chevron earned close to $72 billion. During that same period, we also invested about $72 billion bringing new energy supplies to market. Or, put another way, we invested what we earned.
“This investment pattern is mirrored in the industry as a whole. Estimates of the capital investment required to keep up with expected energy demand growth show that the world needs to invest $1 trillion a year from now until 2030 in new energy infrastructure.”
This is reality. It’s time for a new act, Mr. Markey.
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