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[Editor's note: This story originally appeared in the March 2020 edition of E&P. Subscribe to the magazine here.]
The quest for prosperity has long pushed people into the unknown in search of resources to make lives more comfortable. The Earth’s resources have been the foundation of that prosperity. Early day explorers sailed the world in search of resources like fish, gold, spices and timber that would serve to expand and increase the prosperity of their patrons. Energy, when applied to a raw resource, only elevates prosperity to a greater degree. Take glass, for example. Without sand and heat, there would be no windows to protect us from the elements when inside a building.
Energy consumption, and therefore its demand, will continue to increase, noted Dr. Robert Stewart, professor and holder of the Cullen Chair in Exploration Geophysics at the University of Houston, in a 2019 presentation.
“We are going to use more energy than we think,” Stewart said. “There is no lack of demand for increased prosperity.”
It is this quote that immediately comes to mind whenever I hear the calls to “keep it in the ground.” Those calls are being heard and leaving many to ponder the impact of the energy transition.
In Wood Mackenzie’s “Exploration Themes—5 Things to Look for in 2020” energy insights report, the authors noted that fund managers will feel even more pressure to justify owning oil and gas shares from their customers. Also, that exploration will feel “more heat as investors question the need to explore at all given the vast discovered resources.”
The heat crept higher in January when, in a letter to investors, Larry Fink, the founder and CEO of BlackRock, the world’s largest asset manager with nearly $7 trillion under management, announced that the firm would make investment decisions with environmental sustainability at their core. Changes will include “exiting investments that present a high sustainability related risk” and “launching new investment products that screen fossil fuels.”
Our need for energy is as strong as our need to explore. The question investors should be asking is how those vast discovered resources are being managed. The efficiency and quantity of previously discovered resources are not always equivalent to a new discovery. As our knowledge of shale increases, so too does our understanding of how to develop it efficiently and safely. Are we starting to see that what worked for conventional oil and gas development is not working for unconventionals?
In the era of rising renewables, why should we continue to explore for oil and gas, and even coal? The answer is found in the versatility of the resources.
Oil and gas are more than fuels for powering vehicles or heating homes. “Petrochemicals are used to manufacture thousands of different products that people use daily, including plastics, medicines, electronics, solar power panels and wind turbines,” as a statement on the University of Calgary’s Energy Education website reminds us. It is this type of diversification that the coal industry is now trying to attain. Coal has traditionally had one use: fuel. But coal is carbon-based and researchers have found ways to harness it to create products like carbon fiber. Not only is it stronger than metal, but its properties also conduct electricity, control corrosion and more.
So why do we explore? One, it is human nature. Two, new discoveries enable the application of new thinking to efficiently and safely recover more resources. And three, continued prosperity provides the means to ensure a sustainable future.
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
2024-02-05 - Here’s a roundup of the latest E&P headlines, including an update on Enauta’s Atlanta Phase 1 project.
2024-01-11 - The Norwegian Offshore Directorate provided updates on 2023 activity, including 14 wildcat discoveries and eight projects going online and urging exploration in frontier areas.
2023-12-15 - The oil and gas rig count, an early indicator of future output, fell by three to 623 in the week to Dec. 15.
2024-01-05 - The oil and gas rig count, an early indicator of future output, fell by one to 621 in the week to Jan. 5.