Monday, August 08, 2005

Dial 911: "The world is running out of oil"

Oil giants fanfare energy crisis

Big oil companies are driving advertising campaigns warning that the world is running out of oil and calling on the public to help the industry.

ExxonMobil, the world's largest energy group, said in a recent advertisement: "The world faces enormous energy challenges. There are no easy answers," according to a story of Financial Times published on Friday.

And ExxonMobil's statistics back up the sentiment. In The Outlook for Energy: A 2030 View, the Irving, Texas-based company forecasts that oil production outside the Organization of the Petroleum Exporting Countries, the cartel that controls three-quarters of the world's oil reserves, will reach its peak in just five years.

Chevron, the second-largest energy group in the United States, sends a similar message, but goes two steps further. "One thing is clear: The era of easy oil is over. We call upon scientists and educators, politicians and policy-makers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy. Inaction is not an option," was the message in a recent advertising campaign.

The company has even set up a website, warning of the pressures of high demand and fewer fields and offering a forum of discussion.

Royal Dutch Shell and BP, Europe's biggest energy groups, have recently felt the effects of venturing into more difficult frontiers. Shell was forced by environmentalists to reroute a pipeline that threatened rare whales in Russia's arctic and last month warned of a 10 billion dollars cost overrun at its Sakhalin project there.

In its advertisements BP touts new energy alternatives, while ExxonMobil, which has unapologetically abandoned alternatives that have not been profitable, says in an advertisement: "Wishful thinking must not cloud real thinking."

Meanwhile, a recent simulation exercise showed that terrorists struck oil facilities in the US and Saudi Arabia, pushing oil prices to a record 120 dollars. It goes further to "project" that oil price might rocket to 160 dollars a barrel, after a "simulated" violence in Saudi Arabia which causes evacuation of foreign nationals with oil expertise, ending the country's ability to increase oil production.

However, a senior executive at an oil company not involved in the advertising campaigns speculated that his counterparts were attempting to buy themselves some slack to go after the messier, more expensive, dirty oil. Another executive said it may buy some sympathy for the difficulty many companies are having in increasing their production and reserves.

Neil McMahon, an analyst at brokerage Sanford Bernstein, said: "We think these messages are at odds with the comments normally made to investors regarding future oil prices and the ability of producers to meet demand, and we wonder if perhaps those messages are actually a better indicator of the companies' thinking."

Source: Xinhua


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