Global Energy - The Next Decade And Beyond - Search and Discovery

2004-05 AAPG Distinguished Lecture
Funded by the AAPG Foundation through the J. Ben Carsey Endowment
Global Energy - The
Next Decade And
Beyond
Arthur R. Green, Chief Geoscientist
ExxonMobil Exploration Co., Retired
Houston, Texas

Global Energy
The Next Decade and Beyond
INTRODUCTION FORMAT OF PRESENTATION
• Conclusions - Moving into the Next Phase of World Energy
• Factors Driving Global Energy
• Discontinuities in Energy: Past, Present and Future - an Historical Perspective
of Dealing with Change
— The eight phases of the Petroleum Industry
— The roots of the Petroleum Industry
• Post World War II
• Post Embargo: 1973 - 1980
• Recent: 1995 - 2001
— The “New Economy”
— Corporate Consolidation
— Science and Technology
— Sedimentary Basin Systems - Models in our minds
— From Science to Business Ventures - Managing the unknowable
— Knowledge - Forever a student

Global Energy
The Next Decade and Beyond
INTRODUCTION FORMAT OF PRESENTATION
• The Future to 2025
— World realities - Globalization, Advancing
Technology, National Security
— The world’s oil and gas endowment - peak oil
— Energy consumption
— Oil
— The era of gas
— Unconventional resources
— “Beyond Petroleum”
— An energy scenario
— Energy and our environment
• Energy, Nations and Mankind’s Future
• Realities and Opinions of a Geoscientist in a world
without walls

Global Energy
The Next Decade and Beyond
CONCLUSIONS
• 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.

Global Energy
The Next Decade and Beyond
CONCLUSIONS
• 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

1882
Standard Oil
Company Nobel Oil
Baku
Pre-Industry
Pre Industry
Kerosene
Petroleum Industry Time Line
“Modern Modern”
Petroleum
Industry
1911
Jersey Standard
Dissolution
Discovery &
Acquisition
Global
Discovery and
Acquisition
1942
W.W. II
1959
Global
Basin Analysis
and Discovery
Production
Post WWII
Technology
and
Subsurface
Imaging
1975
OPEC
Embargo
Venezuelan
Nationalization
Oil Price Rise
Western
World
Exploratio
n and
Discovery
1992
Political Barriers Fall
Global Exploration
and Trade
2001
9/11
WTC
Production
Peaking
?
1860 1880 1900 1920 1940 1960 1980 2000 2020
ERAS:
W.W.
I
W.W.
II
Walls
Fall
Step-outs Step outs Global
Post 9/11
and
Oil &
Globalization
Production
Gas
Enhanced
Field
Oil Recovery
Dev.
Heavy Oil
& Deep
Water
Gas - LNG
Discoveries
I II III IV V VI VII VIII

Masarjawah the Physician:
683 in the City of Basra
“Warm Naphtha, especially water- white
naphtha, when ingested in small doses,
is excellent for suppressing cough, for
asthma, bladder discomfort, and
arthritis.”
Mosul Iraq 13th Century -
Akkadian Clay Tablets 2200
BC - Crude Oil Naptu
Arabic - naft / Farsi - neft
Greek - naphtha
Persian - naptik
Byzantine Emperor
Constantine IV used oil -
weapon technology from
Umayyad Damascus to
break the Arab siege of
Constantinople, leading
to the misnomer “Greek
fire.”
Zayn Bilkadi / Aramco World, Jan/Feb 1995

Oil Creek - Pennsylvania 1865
George Bissell - Father of the Oil Industry

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

Global Exploration
ExxonMobil Archives

The Years of Discovery

Lake Maracaibo, Venezuela

Mud Volcano / Azerbaijan

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
Post World War II
Human Technology
Energy
Industry
Dynamics
Opportunities &
Challenges
• “Experienced” Staff
• Inventive “can do” Attitude
• Global Maturity
• Travel and Communication Advances
• Training - Schools and Mentoring
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
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

Oil for a World at Peace
OIL FOR VICTORY, McGraw-Hill Book Co., Inc., 1946

Theodore Link / Application of
Fundamental Technology

Creole Field, Coast of Louisiana
STRUCTURE OF TYPICAL AMERICAN OIL FIELDS, AAPG 1948

The Marine Challenge

Billions of Oil-Equivalent Barrels / US Dollars
Relative Volumes of Oil & Gas
Relative Numbers
0
1900 1920 2940 1960 1980 2000 2020
80
60
40
20