TEN YEARS HENCE
Ten Points About Energy Sustainability
FEBRUARY 6, 2009
On Feb. 6 2009, Patrick T. Mulva, vice president and controller of Exxon Mobil Corporation, presented “Energy Sustainability: A View to 2030,” which contained the following excerpts:
- The world is facing a tremendous energy challenge. It is using the equivalent of 245 million barrels of oil per day. We project between now and 2030, energy demand will grow by 35 percent. The majority of that increase will occur in developing nations.
- In 2030, we expect oil to remain the world’s dominant energy source for transportation and will make up about 94 percent of the total mix, with the balance made up by bio-fuels and natural gas. Oil remains the only fuel with the scale, infrastructure and energy density needed to meet the majority of the world’s transportation demands.
- Coal represents 90 percent of China’s power generation source, and in 2030 will remain the dominant source at about 75 percent. The Asia-Pacific countries – China, India and Australia – have the world’s largest reserves of coal at 100 billion tons. They have turned to coal usage in a significant way.r resources.
- In the United States, 50 percent of our power generation comes from coal. We project that in 2030 it will drop to 30 percent. Renewable energy sources ¬– primarily hydro, wind and biomass – will provide a significantly increasing proportion, but will be on a very small number basis
- By 2030, oil will remain the largest source of global energy supplied, at 34 percent. Natural gas will increase to 25 percent and surpass coal as the second largest energy source. Coal use will grow but at a slower pace. Nuclear power will grow significantly and will be the fourth largest fuel source. Wind, solar and bio fuels will grow at a rate of over 9 percent per year.
- Despite all the work on energy-efficient cars and mandates in the United States, we average about 20 miles per gallon, the same as in 1980. That’s because we drive bigger vehicles with more power. We believe the nation will meet a mandate of 35 miles per gallon average by 2020, but it will require a significant shift in what automakers are providing.
- We often are asked if we will run out of oil soon. Before people started producing oil, there were 3 trillion barrels of oil reserves globally. So far, we have consumed 1 trillion. This doesn’t take into account untraditional sources such as the oil sands in Canada. We are not worried about running out of oil; we just need technology so we can produce it at a reasonable price.
- Energy exploration is an expensive business to run. Fifteen years ago, it cost $25 million to drill one oil well. Today, we are drilling wells that cost $120 million to $150 million.
- To solve the world’s energy problems, we need an integrated solution and resolve in order to increase efficiency, expand supplies and mitigate emissions. The effort must be global in scope and involve science, technology, economics and politics. The oil companies can’t do it alone.
- We wish that the new presidential administration would create and stick with a comprehensive energy policy that looks many years to the future. We have lacked a comprehensive policy for the more than a couple of administrations. Regrettably, energy decisions in Washington have been driven by election cycles.
Patrick T. Mulva is vice president and controller of ExxonMobil Corp. in Irving, Texas. He holds a bachelor’s degree in business administration from the University of Notre Dame and an MBA from the University of Texas-San Antonio. He joined Exxon Mobil in 1976 as a financial analyst and held positions including vice president-investor relations and secretary. He was elected to his current position in 2004. He is chairman of the American Petroleum Institute’s General Committee on Finance and is a member of the Financial Executives International.