~ Check against delivery ~
Thank you for this opportunity to discuss my favorite issue – energy.
I’m going to start by being a bit of a pedant and taking issue with the word “transition”. This is a much used and misunderstood word in the energy debates that we seem to be seeing more and more of.
Transition means different things to different people.
It suggests to many that we are transitioning out of fossil fuels into new clean renewable energy – but, as I’m sure most of us in this room know that’s not how the energy industry works.
When you look back over the history of energy you realise it has never been a kind of relay race where one energy source passes the baton and then leaves the field.
I often hear people talk about gas being a good transitional fuel – a bridge from coal to renewables.
To believe this you have to seriously overestimate the capacity of renewables and underestimate the importance of gas to our economy – not just for electricity, but heat for industries, for the manufacture of petrochemicals, ammonia and fertilizers, and the advanced lubes that make our wheels go round.
The reality is, changes in energy have always been more evolutionary than transitional.
Advances in technology have made more types and more sources of energy available.
At the beginning of the 19th century 100% of the world’s energy was biomass – essentially burning wood and dung.
At the beginning of the 20th century it was roughly 50-50 biomass and coal (NOTE actual: 51% biomass, 47% coal, 1% oil, 1% gas), with oil & gas just starting to appear.
At the beginning of the 21st century we have a smorgasbord of energy sources with oil, gas and coal accounting for over 80%.
There has never been an actual transition. No energy source has vanished – in fact in the year 2000 we were using twice the amount of biomass we were using in 1800. And we expect biomass consumption to continue to grow out to 2040.
In fact, in our Energy Outlook we see all forms of energy growing.
We will continue to see energy types evolve over time as scientists, engineers and entrepreneurs develop new technologies.
To give ourselves a plug here, ExxonMobil continues to be at the forefront of this technological development.
In our R&D laboratories, where synthetic rubber, rechargeable lithium-ion batteries and numerous other inventions were born, we are seeing a constant stream of technological advances.
Recent highlights include cMist processing, CFZ and fuel cell technology for CCS and algae for biofuels.
But apart from these headline projects we also get evolutionary advances that reduce costs and extend the performance of our operations.
These advances – in for example, drilling, seismic acquisition and analysis as well as process controls – have had a significant impact on our operations here in Australia.
We recently started up gas production from our Kipper Tuna Turrum Project – at more than $5.5 billion this is the largest single investment into Australia’s domestic gas market.
It would not have been feasible without innovative engineering and the development of new technology.
The same goes for the Gorgon Project here in WA.
So going forward, whether it be unconventional hydrocarbons or renewables, we see technology continuing to diversify the world’s energy mix and provide an increasing abundance of options to meet future energy demand and promote greater prosperity.