By Linda Hsieh, Managing Editor
ExxonMobil projects that, by 2040, there will be 2 billion new consumers of energy and 3 billion more people will join the middle class. Even factoring in significant increases in energy efficiency, global energy demand is expected to grow by approximately 25%, Randy Cleveland, President of ExxonMobil subsidiary XTO Energy, said at the 2016 IADC/SPE Drilling Conference on 1 March in Fort Worth, Texas. Such demand growth means that the industry must push forward with investments in innovation, even during the current low oil price environment, in order to unlock new supplies of energy. “By valuing the role of continuing innovation, we can continue to push our industry forward and deliver the energy that the world will need for decades to come,” Mr Cleveland said in his keynote address.
The North American shale boom is a shining example of what can be achieved by pioneering innovative technological solutions. “The result of these innovations have been a growth in energy supplies that no one would’ve imagined even a decade ago,” he said. “However, this growth comes just as the global economy has slowed.” This means that the industry must operate more effectively and more efficiently than ever before. “For those companies that are able to find increased efficiencies from better execution, advanced technologies and path-breaking innovations, I think there are tremendous opportunities ahead.”
XTO, for example, is continuing to drill in many US basins, particularly in the Permian and the Bakken. “Internationally, we recently expanded our position in the Montney and Duvernay in Western Canada, and in just a few weeks we’ll be spudding our first well on a pilot project in the Vaca Muerta in Argentina,” Mr Cleveland said. “We remain focused on the long term because our view is that there’s clearly a need for energy, and it’s universal. In the decades ahead, the world will need all of us to develop new technologies and new supplies of energy because the global demand for energy is clearly on the trajectory to grow.”
He praised the industry for the efforts that have been put in to reduce the number of days required to drill and complete wells. Such efforts have enabled companies like XTO to move into production faster than ever before, he said. “In the Bakken, for example, we now drill wells that are 2 miles deep and 2 miles long in less than 17 days that took over 30 days just a short four years ago.” XTO also has been able to reduce the drilling time in its West Texas horizontal program by 40% since 2014, he added, despite a 20% increase in well depth.
Simultaneous to these achievements has been a 60% reduction in LTI rates for contractors working on XTO sites since 2012, Mr Cleveland pointed out. “I would say it’s that type of responsible and innovative spirit, along with growing support from community leaders, as well as policymakers, that’s enabling our industry to meet rising energy demand.”
Underlying all of this work is a critical moral imperative – to end energy poverty for billions of people around the globe, he emphasized. People in the developed world take energy for granted. It enables what we consider to be everyday and mundane things – waking up to an alarm clock, jumping into a hot shower, making a cup of coffee, checking e-mails on our smartphones and driving to work in our cars. “There are billions of people around the world that can only fathom some of those things that we take for granted,” Mr Cleveland said. Yet, one in five people on Earth still have no access to electricity, and two out of five people still rely on biomass for basic cooking and heating needs.
“For billions of people around the world, simply gaining access to affordable energy is the means to a healthier and better life. For their communities, energy is the key to cleaner water, better sanitation, safer and more nutritious food, and even light for education and personal advancement,” he said.
“Energy is essential for modern life, and our industry will be instrumental in meeting this fundamental human need,” he continued. “This means that all of our investments and innovations continue to be vital in the decades ahead, regardless of where we are or where we find ourselves in the current commodity cycle.”