Is Oil Sustainable in a Carbon-Constrained World?
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es, it is. In a nutshell, that was the answer to the question that Sherri Stuewer, Vice President – Environmental Policy and Planning, Exxon Mobil Corporation, set out to answer when she took the podium at the Fletcher School. The world is currently facing a dual challenge: meeting growing energy needs to support progress while also reducing greenhouse gas (GHG) emissions. It turns out, according to Stuewer, that at the current level of technological development, oil and natural gas will continue to play a significant part in meeting the growing demand for energy.
Stuewer emphasized two basic drivers of energy demand—GDP growth and energy efficiency. While GDP growth increases energy demand, energy efficiency lowers it, and energy efficiency remains a major source of “supply” of energy in the future. According to ExxonMobil’s projections, the global energy demand is expected to grow at an average rate of 1.2 percent a year between 2005 and 2030, even with substantial efficiency gains. Although studies differ in their conclusions on the future role of specific sources of energy supply—such as nuclear and renewables including wind, solar and bioenergy—they all agree that the future energy demand cannot be met without fossil fuels.
Another consequence of increased global energy demand and continuing predominance of fossil fuels is an increase of global GHG emissions. Due to the expected growth of oil, natural gas and coal consumption, especially in the developing countries, the increase in annual energy-related carbon emissions is expected to be 7.5 billion tonnes by 2030 versus 2005. According to the International Energy Agency, achieving a 50 percent reduction in CO2 emissions from the 2005 level by 2050 would require an additional global investment of 45 trillion USD and successful innovation to commercialize advanced technologies in the energy sector. Stuewer pointed out that for the foreseeable future there is no “silver bullet,” or one single solution that could satisfy the energy needs of growing economies while at the same time limiting the global environmental footprint. Therefore, ExxonMobil supports the use of integrated solutions—driven by technology—to meet the dual challenge. The solutions include increasing end-use efficiency, developing new supplies of energy from all economic sources, and deploying technologies that reduce emissions.
ExxonMobil employs these integrated solutions in its own operations, as well as helping consumers use energy more efficiently. One of the end-use efficiency technologies that the company has developed is a new tire lining technology that helps tires maintain the proper level of inflation. Properly inflated tires can translate into savings of up to a tank of gasoline each year. A measure undertaken to reduce CO2 emissions at some ExxonMobil refinery operations is a process called cogeneration, which is the combined production of steam and electric power. Cogeneration can be up to 50 percent more efficient than separate production of steam and power. Other examples that Stuewer highlighted included separator film for lithium-ion batteries, on-board production of hydrogen for fuel cell vehicles, and carbon capture and storage, among others.
In conclusion, Stuewer suggested that a revenue-neutral carbon tax in the United States would be more effective than a cap-and-trade system to regulate GHG emissions. She contended that a tax would result in predictable carbon prices, providing the certainty to businesses necessary to stimulate investment in low-carbon technologies. She also reiterated that it is clear that sustainable development still requires the use of oil and natural gas, as redoubled efforts and investments in low-carbon technologies cannot immediately result in a global switch to clean technologies. Therefore, oil and gas will remain at least for another century, and so will ExxonMobil.
Aleksey Dolinskiy F09