ExxonMobil executive calls CO2 emissions a 'huge' issue

Dec. 1, 2003
Worldwide carbon dioxide emissions growth is a "huge" issue for the energy industry as it works to fulfill a global energy demand that is expected to rise 40% by 2020, an ExxonMobil Corp. executive said.

Worldwide carbon dioxide emissions growth is a "huge" issue for the energy industry as it works to fulfill a global energy demand that is expected to rise 40% by 2020, an ExxonMobil Corp. executive said.

"Oil and gas are going to continue to meet the world's energy demand certainly through 2020 and beyond," Randy L. Broiles, global planning manager for ExxonMobil Production Co., told a Houston conference Nov. 19 sponsored by Deloitte & Touche LLP, the US arm of Deloitte Touche Tohmatsu.

ExxonMobil expects the substantial increase in worldwide energy demand even though world energy efficiency is improving by only about 1%/year, he said.

An escalating number of cars will contribute to global pollution problems, Broiles said. Currently, there are 15 cars for every 1,000 people worldwide, but ExxonMobil expects the number will rise to 50 by 2020.

The US now accounts for about 25% of the greenhouse gases (GHG), but Broiles believes that developing countries will be the biggest contributors to future GHG increases.

"Carbon emissions are a huge issue for our industry," he said. Emerging technology provides potential to reduce emissions, he added. ExxonMobil has agreed to contribute as much as $100 million during 10 years for an academic-private industry cooperative research project at Stanford University.

The Global Climate & Energy Project is conducting precommercial research to identify low-emissions, high-efficiency energy technology.

Other GCEP sponsors contributing funds are General Electric Co., which has agreed to invest as much as $50 million; Schlumberger Ltd., $25 million; and Toyota, $50 million.

Natural gas, LNG

Conference participants noted that natural gas will play an increasingly important role in the global energy supply mix.

In response to a question from the audience about gas-to-liquids technology, Broiles said ExxonMobil sees GTL as a very specialized, very small component of the future energy supply mix.

"We are hopeful [for breakthrough technology]; we are watching it closely," he said.

LNG currently accounts for 10% of world energy demand, but it is expected to account for 25% by 2020, Broiles said.

Luis E. Giusti, senior advisor with Washington, DC-based Center for Strategic & International Studies, said annual investment in the LNG chain is expected to more than double to $9 billion through 2030 from the $4 billion spent during the past decade. And LNG trade is expected to undergo a sixfold increase through 2030, he said.

Members of the Organization for Economic Cooperation and Development are expected to account for half of the global gas investment, with the US and Canada together accounting for 25% of the total, he said.

Sufficient capital is available globally to support the investment required, Giusti said.

"However, energy market reforms, more complex supply chains, and increased international gas trade will give rise to shifts in the risk profile," he said. "The lifting of restrictions on foreign investment and the design of fiscal policies will be crucial to capital flows, especially in the Middle East and Africa, where much of the increase in production and exports will occur," he said.

The US is expected to increase LNG imports to 6-8 tcf/year from the current 1 tcf/year during the next 20 years, Giusti said.

Regional gas markets will become increasingly interconnected and "to some extent global," he said, adding that regional price differences still will reflect the fundamental supply-demand balance.

"Where in the past, there was virtually no spot market in LNG, greater liquidity due to a greater number of projects and destinations will help foster the emergence of such a market. Its development, with published prices, is possible but very unlikely in the following decade," he said.