The National Petroleum Council outlined plans June 21 for a global oil and gas study that its members hope will lead to better government energy policies and increased public understanding of energy issues.
“We have an historic opportunity to foster serious discussion, enhance public understanding of the oil and gas industry’s complex structure, and create a climate for better policymaking,” said Alan J. Kelly, a former corporate planning manager at ExxonMobil Corp. and chair of the study’s coordinating committee.
US Energy Sec. Samuel W. Bodman asked NPC to undertake the study on Oct. 5, 2005, and consider three basic questions: what the future holds for global oil and gas supplies; whether incremental supplies can be brought “on-line, on time, and at a reasonable price to meet future demand without jeopardizing future economic growth”; and which supply and demand strategies the US should pursue.
“These are weighty issues, Bodman told NPC members during the council’s June 21 meeting in Washington, DC. “Beyond the temporary disruptions in supply and demand is a real shift in the dynamic between the developed economies of the West and Japan and the oil-producing world.”
In his address, Kelly insisted that NPC’s effort “will not be another grassroots energy forecast.” He said, “It will use public data, seek input from a broad range of interested parties, emphasize long-term conditions instead of near-term volatility, rely on sound data and science to support its recommendations, have study teams working within the study’s scope and finishing on time, and comply with all antitrust rules and regulations.” The coordinating committee had worked for 10 weeks developing an operating strategy and increasing the number of participants before presenting its proposal June 20 to NPC’s officers, Kelly said.
Four study groups
The study will use four study groups examining demand, supplies, technology, and geopolitics and policies, Kelly said. James Burkhard, global oil market research director at Cambridge Energy Research Associates, will chair the demand group. Donald L. Paul, vice-president for technology and environmental affairs at Chevron Corp., will chair the supply group. Rod Nelson, vice-president of strategic marketing at Schlumberger Ltd., will chair the technology group. And Frank A. Verrastro, energy program director at the Center for Strategic and International Studies, will chair the geopolitics and policy group.
Kelly said that the groups will try to involve experts and organizations from outside the oil and gas industry. “A key element will be to seek information from the automobile industry and other external sources,” he said.
The groups also will try to gauge potential future energy contributions from coal, nuclear, and other competing sources and from current and proposed alternatives, Kelly said.
“Our approach will be to find out why perspectives vary so widely and come up with a broad range of ideas,” he told OGJ following the meeting.
In his address, Kelly said that after July 1, NPC’s coordinating subcommittee will conduct weekly conference calls with the study team leaders, hold monthly meetings, and issue regular progress reports to the council’s officers. Its goal is to have a draft of the study ready by first quarter 2007 and a final version completed by the following December.
Fuller evaluation
One council officer suggested that NPC’s study could break new ground. “Previous studies have focused on parts of the energy supply and demand picture-refining or natural gas, for example,” said Chevron Corp. Chief Executive Officer David J. O’Reilly, who also is NPC’s vice-chair of supply. “This one will evaluate the entire situation and could produce important new information, especially if it achieves the desired level of participation.”
Kelly told OGJ, “We plan to take an oil and gas focus, then try to integrate the perspectives from coal, nuclear, and other sources. You could say that’s the new element.”
Devon Energy Corp. Chief Executive Officer Larry Nichols said, “That could be interesting. Still, I was mildly disappointed that the secretary moved so quickly to alternatives when there’s still so much oil and gas yet to be produced in this country. Greater support for oil and gas research and development is very much needed.”
In his address, Bodman said that in his meetings with government energy leaders from other countries in the past year, “the common theme in all our discussions was the challenges we face due to increased demand for crude oil worldwide.”
Meeting with reporters afterward, he said that he has encouraged other countries’ energy leaders to encourage investments in new production capacity “and I believe they have responded favorably.” He cited Saudi Arabia and Qatar as areas where major projects have been announced.
“Our goal is to encourage supplying nations to make investments, but we need to do our part in this country by developing more alternatives,” Bodman said.
