American Oil and Gas Reporter - November 2016 - 94

ConventionCoverage: New Mexico Oil & Gas Association

World Set For Energy Demand Growth
SANTA FE, N.M.-The world will
change in many ways during the next
quarter century, but Chad Harris, energy
adviser in corporate strategic planning
for ExxonMobil, predicted the key drivers
supporting increased energy demand
would remain in place.
Speaking at the New Mexico Oil &
Gas Association's annual convention, held
Oct. 2-4 in Santa Fe, Harris pointed to
global population and economic growth
as key factors in the company's energy
projections. Population will jump from 7
billion today to 9 billion by 2040, he said,
and economic growth is projected to more
than double for that period, he added.
"All these additional people and economic growth drive additional energy demand needs," Harris said. "We expect
energy demand is going to grow 25
percent from 2014 to 2040. Energy demand will grow at a significantly slower
pace than economic growth, aided by
major improvements in efficiency. Finally,
we expect carbon emissions will peak
around 2030, as fuel choices shift toward
lower carbon sources."
Overall, Harris projected that by 2040,
oil would remain the world's top fuel
source, with natural gas usage increasing
the most of all fuel sources, and solar,
wind and biofuels growing the fastest,

Jay Ottoson, president and chief executive
officer of SM Energy Co., warns the New
Mexico Oil & Gas Association that the industry does a poor job of communicating
to the public how important oil and gas
products are to them. He described his
efforts to improve that message through
the Look Beyond.org platform.

94 THE AMERICAN OIL & GAS REPORTER

with an annual 5 percent growth rate.
The 20 percent increase in oil demand
will be met by production increases from
the Organization of Petroleum Exporting
Countries, as well as North America, he
projected. Conventional crude and condensate production will fall slightly, and
the gap between supply and demand will
be met by what Harris called "technology-driven supplies:" oil from relatively
newer techniques and services.
Looking at oil use, he said transportation and industrial sectors were the key
demand drivers, with the chemical industry
especially likely to see a strong increase,
as developing nations and their expanding
middle class populations-almost 2 billion
more in India and China combined-
looked to buy plastics and advanced materials. Even more significant growth will
be seen on the transportation side, Harris
predicted, as additional goods move from
factories to markets, and more people
can afford light-duty automobiles.
Energy efficiency increases will help
mitigate the impacts of more cars on the
roads and additional appliances in homes,
Harris suggested. "Think about how much
more efficient cars and industrial processes
are today," he said. "Going forward, not
only do we expect this trend to continue,
but we expect improvements in energy
intensity to happen twice as fast. A lot of
this will be policy and mandate driven."
Public Education
Oil and gas companies excel at touting
production achievements and work safety
records. When it comes to helping consumers understand their products' importance, the industry falls short, argued
Jay Ottoson, former Western Energy Alliance chairman. "There is a big white
space in our communications when it
comes to talking about how our products
enable and empower our customers," he
told NMOGA.
Ottoson, president and chief executive
officer of SM Energy Co. in Denver, described how his company partnered with
a global public relations firm to develop
Look Beyond.org, a platform for positive
communications efforts about the industry
to fill that space.
The sole purpose of the oil and gas
industry is to provide a service to customers, he said. In the past, companies
adopted the style of communication typical

of commodity producers and assumed
customers saw the merits.
"Those products are so integrated into
our modern lives that they are almost invisible to many people, people who are
encouraged by our opponents to see our
contributions to society as the emissions
from car tailpipes," Ottoson assessed. "We
have to explain how we are not damaging
the environment. We have to be diligent
in that sense, but we also need to point
out the many ways our products make
peoples' lives better and our country more
secure. We have to do this in a way that
interests and engages them."
Look Beyond has three major components, he detailed, and asks people to:
* Look around: Most products people
use every day would not exist without oil
and gas. "Oil and gas production allows
us to enjoy the benefits of plastics, fibers
and fabrics, packaging, household goods,
outdoor equipment, personal care products,
and so much more," he said.
* Look again: There are surprising
things people don't realize are made from
oil and natural gas. Ottoson gave examples
of electric-powered vehicles and wind turbines as he described how oil and gas were

SEE GROWTH PAGE 101

Chad Harris, energy adviser in corporate
strategic planning for ExxonMobil, predicts global population and economic
growth will be key drivers supporting increased global energy demand. Harris
was one of the speakers at the New Mexico Oil & Gas Association's annual convention, held Oct. 2-4 in Santa Fe, N.M.

American Oil and Gas Reporter - November 2016

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