Mervyn Sambles, vice-president corporate development for giant Texas-based Fluor Corporation, told the delegates at the Gold Coast event that infrastructure was not accounted for in many forecasts.
“Unfortunately, it is poorly understood in the public domain and by policy makers that such a large and complex infrastructure – including transportation, storage, manufacturing, and distribution – is needed to support this expected future growth,” Sambles said.
“The combination of significant growth in supply, geographic shifts in demand centres, and the growth of unconventional resources, all point to a need for massive infrastructure investment. Estimates about energy infrastructure investment suggest around $20 trillion will be required over the coming decades.”
Sambles was delivering a keynote APIA address as a representative of the US federal advisory body Natural Petroleum Council (NPC).
The NPC conducted an 18-month study into future energy needs to address key concerns about energy - availability, reliability, cost, and environmental impact. The study involved 350 people from within the energy industry and beyond, including Australian executives and industry leaders
“One of our findings on the infrastructure front is that most forecasts assume that infrastructure capacity appears – as, when and where needed –with little attention given to scale, capacity, timing and competing demands,” Sambles said.
“It is unclear, however, to what extent the industry will be able to continue the technological, operational and regulatory improvements it has made in the past, and the infrastructure demands of many alternative energy sources are not well understood,” he said.
Sambles global energy demand would grow by 50% to 60% to the year 2030, driven by population and prosperity, and the world is not running out of energy resources.
“Although the magnitude and share of non-fossil fuels are growing, fossil fuels will continue to play a significant role through 2030,” he said.
“This is the hard truth about demand –fossil fuels are indispensable to satisfying demand as global prosperity and incomes increase.
“The hard truth of supply is that the world is not running out of energy resources. The challenge is that these resources will be increasingly inaccessible, remote and require significant time and investment to develop.
“There are accumulating risks to the ability of conventional oil and gas resources to meet growing demand.”
Sambles said global cooperation would be required to meet tomorrow's energy challenges.
“Actions must best begin now and be sustained over the long term,” he said.
The study also found that the bulk of the energy sector workforce is due to retire within the next decade, and policies aimed at curbing carbon dioxide emissions will alter the energy mix, increase energy costs and require reductions in demand growth.
Sambles predicted that Australia would continue to grow its gas production but growth areas would become more remote and more technically challenging.
“The role of tight gas and high pressure reservoirs will become more significant,” he said.
“In the US, for example, more than 20% of gas comes from unconventional sources. The unconventional is fast becoming conventional, with a broad range of gas supply projections differing due to assumptions on growth, intensity, fuel mix and risk.”
