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Page added on October 20, 2013
Energy demand continues to rise
All sources of energy – with oil and gas at the core — will be needed to meet the rapid increase in world energy demand by 2050, Aramco CEO Khalid A. Al-Falih underlined before the World Energy Congress (WEC) 2013 in Daegu, Korea.
Aramco is banking on the old adage that the energy needs of a growing population only goes up and up. With the world population projected to increase by 2 billion to 9 billion people by 2050, and the global economy expected to be three or even four times larger, global energy consumption is bound to rise significantly, Al-Falih stressed late last week.
Even with advanced energy management and efficiency programs that could lower consumption (and indeed the intensity), the overall global demand is expected to be substantially higher by 2050, driven by the rising global population empowered by prosperity, he asserted.
Highlighting that there was no dearth of resources, he said a total of 1.3 trillion barrels of oil has been produced over the last 120 years and another 1.6tr barrels worth of deposits can be pumped out at present. “What is important is that the deposits are growing every year.”
Global oil production volume stands at around 91 million barrels a day. “In 20 years it will be 110m barrels,” he added, with Aramco boosting its daily output by more than 1.5m barrels a day.
He went on to emphasise that the world needs all – conventional, non-conventional, renewable and the non-renewable, underlining there is room for everyone in the energy industry to prosper “under one roof.”
And then asserting that that Saudi Arabia would continue to play a lead role in the global energy industry in the decades to come, Falih underlined: “As part of our drive to become the world’s most integrated energy company, we have increased our annual capital budget tenfold – from $4 to $40bn – over the last 10 years.”
Identifying this as the prime reason for Aramco’s ability to stabilise the markets, if and when required, he quipped: “In the past two years alone, we have swung our production by more than 1.5m bpd in order to address market supply imbalances.”
Saudi Arabia is currently also endeavouring to expand its asset base — so as to continue to be the energy king pin in the years and decades to come too. “We are on track to increase the average of our conventional oil recoveries to 70 per cent, which is more than double the current world average,” Al-Falih said. “Resources are, in fact, abundant.”
Despite talk of a glut, Saudi Arabia plans to maintain output capacity at 12.5m bpd through new fields including the offshore Manifa deposit. The company also plans to add 550,000 barrels a day of capacity from the Shaybah and Khurais fields by 2017. These will help Aramco replace the oil that’s no longer being pumped from aging fields, Al-Falih conceded.
And with the US shale boom spreading “far and wide”, Al-Falih went on to spice up the audience by saying — Saudi Arabia was going ahead with its shale revolution, to be among the first countries outside North America to use shale gas for power generation and thereby save more of its crude oil for lucrative exports.
“Only two years after launching our own unconventional gas program, in the northern region of Saudi Arabia, we are ready to commit gas for the development of a 1,000 megawatt power plant which will feed a massive phosphate mining and manufacturing sector,” said Falih.
Saudi Oil Minister Ali al-Naimi has earlier given an estimate of over 600 trillion cubic feet of unconventional gas reserves, more than double its proven conventional reserves.
That would put Saudi Arabia fifth in a 32-country shale gas reserves ranking compiled for the US Energy Information Administration.
Despite odds, Al-Falih is looking at future — with a confident smile.
14 Comments on "Energy demand continues to rise"
herby on Sun, 20th Oct 2013 3:07 pm
Civilization will collapse by then. We should stop sending aid to all of the third world countries with exploding populations, will help the overpopulation problem.
Ghung on Sun, 20th Oct 2013 3:24 pm
“…there is room for everyone in the energy industry to prosper “under one roof.”
Interesting choice of words. Prosperity requires an environment that ‘we’ can prosper in. Those of us who’ve taken major steps to reduce our contribution to this madness live under the same roof, and I for one, look out at the rest of the world with a sense of incredulity, bafflement, even disgust at how the human collective can so mindlessly ignore that none of this will matter, at all, if we keep on the path of growth, consumption and destruction of the only atmosphere and biosphere we have. Having come to the conclusion that humans will continue to dig, drill, frack, and burn whatever they can, it would be easy to surrender to this rush into oblivion for most species alive today.
I just can’t go back to that; there’s no room for it in my forever-changed psyche. So we fight small battles: one more PV panel, one less mile travelled, one less acre of forest to be exploited at a time, for whatever good it’ll do.
There is no turning away, as much as most of humanity pretends there is.
shortonoil on Sun, 20th Oct 2013 4:00 pm
“Aramco is banking on the old adage that the energy needs of a growing population only goes up and up.”
Essentially, at face value, this statement is correct; but not for the implied reason; that is, not because there will be greater general economic activity. The statement is correct because the energy needed to produce energy is increasing, and that happens at the expense of the non-energy producing sector of the economy.
In 2012 it required 70,000 BTU from a gallon of light sweet crude (from a total of 140,00 BTU/gal) to extract, process, and distribute that gallon. By 2030 it will require 99,400 BTU from the same gallon to bring it to market. Since the total energy available is fixed by the laws of physics, less, and less becomes available to the end consumer.
Since the end consumer must ultimately pay the total cost of production, they see this as increasing price. The price increases until the petroleum production system can no longer support itself, that is, the end consumer can no longer afford petroleum products.
As far as attaining a 70% extraction rate, this is at best wishful thinking. The Second Law informs us that the maximum extractable rate is 71% (29% must be given up as waste heat for the process to go forward). As they say in the financial sector, “this guy is talking his book”.
bobinget on Sun, 20th Oct 2013 4:03 pm
Politically, most but not all KSA’s contributions to sustainability have been verbal. Saudis are determined to keep Iran in check with conventional weapons until they too posses a sufficient number of nuclear weapons. This past week we read here on this publication of an four Billion dollar ‘defense’ equipment order including bunker-busting bombs
obviously intended to knock out Iran’s nuclear infrastructure.
When two OPEC crude providers, numbers one and two
are locked in a fight to the death, among other more important considerations we are forced to conclude
steady crude oil deliveries, primarily to Asia are in question. If it were only oil bidness KSA and Iran were already fighting over in Syria, we could imagine
some sort of OPEC compromise.
Indeed that would be simple compared to significant religious differences dating back half a millennium.
In Iraq, OPEC’s #3 bombings any one of which would cause early elections in most democracies are rocking this oil provider. July alone took the lives of over 1,000
http://worldnews.nbcnews.com/_news/2013/08/01/19818596-iraq-endures-highest-monthly-death-toll-in-5-years
Can any reasonable person believe under current conditions, OPEC can actually raise production?
As for Asia, oil imports are growing faster then supply can ever expect to satisfy even if peace broke out in the Mid East. http://en.wikipedia.org/wiki/Peak_oil#Overall_supply_llevels
Stilgar on Sun, 20th Oct 2013 5:02 pm
“the global economy expected to be three or even four times larger”
If we are having problems now with trying to generate growth, relying on borrowing and QE to accomplish it, even twice as large seems very unlikely. It also seems foolhardy to even consider the idea of so much growth. It will only make the edge of the cliff that much higher.
I recently drove down from No. CA to the Los Angeles-San Diego basin, corridor, whatever you want to call it and all the highways were full. Sure they may be going 70-90 mph, but they are full all the way across as many as 7 lanes of traffic, and the vast majority are ICE’s. It seems like an insane way to live.
Anyway, I drove home at night and the traffic was still heavy. But ah, alas, some relative peace as Hwy 5 north along that long stretch from the bottom of grapevine to the 580 split was an easy drive (compared to coming down in the day which was like a Nascar race as cars flung themselves down the slower lane busting back into the fast lane no matter how little room there was between vehicles – no code on the road anymore – a whole new generation that threw morals and ethics out the window when Monica Lewinsky became a multi-millionaire). Just set it to 75 on cruise control and because I couldn’t see the terrain changing time and space took on a different perspective and the miles just melted away. Really chewed up the oil though, even though I only had 3k miles on it. My advise – definitely change your oil after long trips even if you haven’t reached 3k miles.
Advise to humankind: For your own sakes, ease up on growth of all kinds.
nemteck on Sun, 20th Oct 2013 5:43 pm
We in the Western world led the rest on a path of global destruction. The rest of the world tries to copy our insane consumption philosophy which, if successful, one would need 4 parallel earths of resources. This shows the magnitude of the crime against nature.
Recently, NASA published a picture of our planet shot from Saturn. It shows a tiny bright spot in an otherwise black background. If we mess up this spot (and we are incessantly working on it), there is no plan B where to escape. I think homo sapiens is a failed experiment of nature.
GregT on Sun, 20th Oct 2013 6:23 pm
Ah, the religions of science, technology, consumerism, and infinite exponential growth. What a wonderful world we amazing homo sapians have created.
Unfortunately for us, Gaia does not prescribe to our points of view, and even more unfortunately, Gaia is in control.
mike on Sun, 20th Oct 2013 6:50 pm
Solar Panels will fix all of this. Look at Spain, they have covered their nation in Solar and they are booming. Solar all the way!
J-Gav on Sun, 20th Oct 2013 10:12 pm
Mike on Sun: Spain is booming? When was the last time you checked? Spain is making swirling noises about as loud as those coming from Greece, Italy, Portugal, Ireland, Iceland, Lithuania etc … You need to update your info, man.
Newfie on Sun, 20th Oct 2013 10:20 pm
The IPCC has warned that we must stop burning fossil fuels by 2030 or we risk runaway greenhouse warming. The planet will “fry”. Saudi Arabia in particular will become uninhabitable. Helloooo, Mister Al-Falih !
J-Gav on Sun, 20th Oct 2013 10:25 pm
Stilgar – “Even twice as large seems very unlikely.” That’s for sure! Not only very unlikely but also an extremely foolhardy and suicidal goal to begin with. Trying to convince your family and friends that growth is gone unfortunately remains a difficult task.
luap on Mon, 21st Oct 2013 12:00 am
Spanish now removing solar panels due to skint government taxing them for using them…France 24 news..18/10/2013
Stilgar on Mon, 21st Oct 2013 4:26 am
“Trying to convince your family and friends that growth is gone unfortunately remains a difficult task.”
The most amazing thing is their unwillingness to investigate information on the topic. It’s like they’re too afraid to even open their eyes to any other possibility.
I was channel surfing last week and popped by CNBC’s Ludlow, who said, “What the government doesn’t understand is all we need is growth and lots of it.”
Ah Ludlow, can we show you some graphs here…
GregT on Mon, 21st Oct 2013 5:41 am
Two words. Cognitive dissonance.
As long as the corporately controlled media keeps spewing the growth lie, the further down the hole we all will go.