The global environment is changing. And it continues to change. Yesterday’s perceived energy scarcity has given way to a new era of energy abundance, thanks to technological innovation in the oil and natural gas industry.
As a result, the United States and Canada are enjoying an energy renaissance and accompanying economic stimulation and job creation. Their energy security has dramatically improved – self-sufficiency seems attainable – and the energy renaissance may now spread worldwide.
Among the revolutionary innovations making this possible are:
- Combined use of hydraulic fracturing, also known as “fracking,” and horizontal drilling to produce oil and natural gas from shale rock and other tight formations.
- Improving recovery from Canada’s prolific oil sands through use of steam-assisted gravity drainage and other techniques.
- Increasingly advanced equipment and expertise that enable drilling in ever-deeper offshore waters.
- Efficient ocean-going vessels that enable delivery of liquefied natural gas to markets worldwide.
Through this technological revolution, the natural gas outlook in the United States has improved profoundly. A century of supply is believed to be available. Production is up one-third just since 2005; 20% further growth is expected by 2035; and long declines in reserves and demand have been reversed. North America is now essentially energy independent in natural gas – an achievement until recently considered impossible. And the United States soon could even become an exporter.
The new shale technologies are also being applied to liquids-rich fields. Since 2008 U.S. oil reserves have grown 22%, and oil and liquids production is up 30% – the first meaningful increases in 20 years. Thanks to both shale and the Canadian oil sands, North America could become self-sufficient in oil by 2025 and even a net exporter afterward.
Meanwhile, shale potential exists in dozens of other countries, and expertise and equipment developed in North America is being exported. Development elsewhere remains in early stages and may not progress as rapidly as in North America. It was encouraged here by the availability of privately owned mineral rights, an existing industry infrastructure, and an established regulatory framework.
ConocoPhillips is ideally situated for this new energy landscape. Our mid-2012 repositioning made us the world’s largest independent exploration and production company based on production and proved reserves. We had long maintained a major presence in North America, with legacy acreage in many of the best producing regions. This included the early shale trends, and we have since expanded those positions.
We now have substantial conventional production in the U.S. Lower 48 states, Alaska, the North Sea and other areas; rising shale liquids production in the United States; promising shale acreage in Canada, Australia and Poland; growing production in the Canadian oil sands; major lease holdings in deepwater trends in the Gulf of Mexico and Asia Pacific regions; and a vital presence in the global LNG business.
For consumers, the changing energy landscape means greater ability for the world to meet the needs of its growing population, with reduced risk of price volatility and greater economic stimulation and job creation. For ConocoPhillips, it means ongoing opportunity to fulfill our long-term mission of responsibly supplying the energy that powers modern life.