An Unlikely Paul Revere

Oh, what a difference 20 months can make. When Lee Raymond retired in early 2006 after leading ExxonMobil (XOM ) to record profits, he was the quintessential Texas oilman. If the notion of developing alternative fuels and putting pressure on Detroit to build more fuel-efficient cars ever crossed his mind, it didn’t cross his lips. But as architect of a new study by the National Petroleum Council, a federal advisory group, Raymond has become a sort of Paul Revere of energy, warning of coming shortages by 2030 if America does not act now.

The NPC report says that world energy demand will increase by up to 60% in the next 25 years. Is production peaking?


What the report says is that there are more than adequate resources. The problems that the world faces are not related to what I call geologic risk. They’re related to above-ground risk. They’re related to political issues, access issues, financing issues, scale issues, technology issues. The important thing for people to understand is that major projects in this industry take a long time. So even in the most optimistic case, I suspect that the industry would have trouble keeping up with the growth in demand.

So how do we deal with that?

We make the point that it’s all hands on deck. By that I mean all sources of energy that meet the competitive standard set by the market should be encouraged. That’s coal, clean coal, nuclear, conventional oil and gas, nonconventional oil and gas, biofuels, solar. Anything that can clear the economic hurdle needs to be encouraged.

Business Week