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Today, the world is experiencing a step change in the rate of growth in energy demand owing to rising populations and economic development. After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand.
But, as the world develops alternative energy sources, it will not stop using oil and natural gas; it just means that new energy types will be added to the global energy mix.
Although Shell does not subscribe to the peak oil theory, the truth is that the readily accessible sources of conventional oil are being depleted, particularly outside the Middle East.
To tap new resources requires hard choices. In some cases, that necessitates spending more on exploration and development to find and tap ultra-deepwater resources as we are doing in the Gulf of Mexico. It means technology investments to convert oil sands to useable oil fluids as we are doing in Canada. And it requires making the policy decisions necessary to grant access to areas where federal restrictions currently limit exploration and drilling.
It is also about technology. Shell spends more on advancing energy technology than anyone else in the industry. Continuous innovation in exploration and production have unlocked resources that were once out of reach or too expensive. New technologies will come online to open up more new opportunities.
We are prolonging the lives of mature basins around the world and creating new options by moving into unconventional resources, such as the Canadian oil sands, contaminated gas in Australia and heavy oil. We are also developing giant integrated gas projects and are actively developing our business in conventional hydrocarbons.
But many of tomorrow’s projects will probably take place in countries with limited capacity to provide basic public services, from infrastructure and potable water to health care and education. Increasingly, oil companies may be called upon to add value, not just to a country’s oil and gas sector, but also to a society’s entire value chain.