and there always will be. But time and time again, the petroleum industry has risen to the challenge, and it will continue to do so in the future. Against the backdrop of these uncertainties, we look to the challenges ahead. Are oil prices, like all commodity prices, on an endlessly upward escalator? While the world's major energy forecasting agencies publish a variety of scenarios regarding the future energy mix, one thing is abundantly clear - the world is going to need a lot more energy in the decades ahead. Despite the variables, most energy outlooks agree that global energy demand will grow by 40 percent or more over the next two decades, due to increasing prosperity and world population growth of another 2 billion people by 2030, predominantly in developing nations. Meeting future energy needs will require contributions from across the spectrum of sources - including renewables, nuclear, natural gas, coal, and of course, oil. Such great demand will mean that the more established energy sources will be called to the fore, given their known quantities including supply, infrastructure and end-use technologies. The gap between the readiness of fossil fuels on the one hand, and that of renewables, which still must surpass hurdles on the way to appreciable contribution, on the other, makes a compelling argument for the place of oil in the energy mix. The world does not have the luxury of discarding any particular energy source, marginalizing or penalizing its competitiveness through policy, public opinion, regulatory measures, or distribution of subsidies and incentives to unfair advantage. The effect of such an approach would be detrimental to global economic growth and to efforts to raise living standards for the billions of people still living in poverty. A level playing field that encourages the investment needed for all viable energy sources to fully contribute is essential for a secure energy future. Likewise, that level playing field should be free from government intervention policies that manipulate demand, creating uncertainties through artificial means rather than market signals. The traditional fossil fuel energy sources, especially oil, will continue to serve as the “base-load” for meeting growing world energy demand for decades to come. Just as those energy outlooks concur on a 40 percent jump in energy demand over the next 20 years, they also indicate that more than 80 percent of that demand will be met by fossil fuels - of which oil will deliver the lion's share. This will be true at least through mid-century, and perhaps even longer, thanks to human ingenuity. The petroleum resource base continues to be vast: it is more than sufficient to meet projected demand for many decades to come. The in-place resources of conventional oil are estimated to be six to eight trillion barrels. In addition, the world endowment of unconventional resources, such as extra-heavy oil, tar sands and shale oil, is estimated at another seven trillion barrels. Of these, only about 1.2 trillion barrels have been produced to-date. On top of all this, the world could call upon gas-to-liquids, coal-to-liquids and even bio-fuels, if need be, notwithstanding issues related to conventional bio-fuels. As I have often noted, the Kingdom of Saudi Arabia, as the world's leading supplier of oil with 264 billion barrels of proven oil reserves, could continue to supply crude oil at current production levels for another 80 years, even if we never found another barrel. However, we are continually finding those new barrels through new discoveries and improved recoveries, so that our reserves have not decreased. --More
