For those of you who missed it last night Lee Raymond CEO of Exxon Mobile was on Charlie Rose on PBS last night.
And if there were any doubts about the dire state of affairs for OIL he dispelled that very well.
Some of the points he made:
1. There is no quick fix replacement for OIL, there is no other energy source on the horizon that can replace the energy equivalent of oil. None! If there was they would be in it. He made a very strong point of how OIL energy has been the single element that has made possible the fantastic economic growth of the 20th century and there is nothing out there that can replace it.
2. China and the U.S. are running out of oil, in his words “No doubt about it”
3. No major oil company wants to operate in Iraq. In his words: ” the oil infrastructure in place in Iraq is the same infrastructure built by the oil majors in the late 1960’s and early 1970’s before they were kicked out by Saddam Hussein and the Iraqi oil industry nationalized, It has never been updated. And the US government was naive to believe that oil production could be ramped up beyond its pre-war levels. The infrastructure is not capable of increasing production” It will be years and billions of dollars will need to be invested before production can be increased significantly. The US government was also naive to believe that revenues from Iraqi oil production would be sufficient to rebuild Iraq and its oil infrastructure.
4. He confirmed that the North Sea was facing severe production declines and the UK was becoming a net oil importer.
5. Stated that is was not the OIL companies objective to ensure they operated in strictly democratic countries and the type of goverment was not their concern. Their aim was to go where the oil was.
6. Stated that Exxon Mobile was not consulted or part of Vice President Cheney’s Energy Task Force.
7. Stated that at the current time there was an adequate supply of oil on the market, they could buy all they wanted. What was driving up the price currently was speculators entering the market due to political instability in some of the world’s major oil producing countries.
8. Stated the need to bring back Nuclear Energy for Electrical Generation as it was the only viable alternative.
9. Solar energy is not a viable replacement. He made the comment that it would take 84 square miles of solar panels to replace the energy that a single gas station sells on a single day. It would take solar panels covering all of New Jersey to replace the energy dispensed by just 100 gas stations in a single day. Exxon has 3,000 gas stations in the US and only has 13% of the market, and in his words “Do the math” noting else is feasable to replace oil as an energy source!