The growing effects of human activity on the environment has overtaken the Organization of Petroleum Exporting Countries and the Middle East as the key subject for U.K. oilmen.
John Collins, chairman and chief executive of Shell U.K. Ltd., says OPEC and the Middle East still have the potential to produce the unexpected and disrupt the delicate balance of oil supply.
But they are no longer the top of his list of things to watch as they were through the 1970s and 1980s.
COLLINS' VIEWS
Collins, as chairman of the Advisory Committee on Business and the Environment set up by the British government last year, has emerged as the British oil industry's No. 1 spokesman on the environment. His committee advises ministers on the effect of environmental issues on business and how industry can contribute to a better environment.
Collins outlined his reasons for deposing the Middle East at a meeting of the Energy Industries Club in London. At the time of the oil shocks of the 1970s and 1980s nonCommunist demand was growing at 7%/year and had been for more than YO years.
World reserves of accessible, low cost oil were being depleted fast, and replacements were much more expensive to develop and,produce.
Current outlook for world oil demand is perhaps growth of 1.5%/year, while technological advances have considerably reduced the cost of developing abundant new sources. Shell sees a tendency for oil supply to exceed demand, with the underlying price trend much as it has been for the last few years$15-20/bbl.
The facts on the challenge facing the energy industries are stark, Collins said. Since World War II, economic development has been fueled by a fivefold increase in energy supply with a corresponding burden on the environment-local, regional, and global.
"Whether in the form of global warming, land exhaustion, water shortages, or resource depletion, human activity is straining the environment," Collins said. Small wonder that the goal of sustainable economic development has reached the top of the agenda for world statesmen. But is it attainable?"
RESOURCE EFFICIENCY
The solution lies largely in industry's hands through transformation of economic activity to incorporate much greater resource efficiency offered by advancing technology.
Contrary to popular belief, economic development does not always harm the environment. New investment embodying the latest, most efficient technology is replacing the old, the inefficient, and often the dirty.
Continuing progress will have profound implications for the energy industries. As much as $1 trillion could be needed to continue raising environmental operating standards and production of cleaner products to tighter specifications.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
