The only things preventing a continued increase in North American natural gas and oil resources will be regulations and a lack of ingenuity, an ExxonMobil Corp. executive said last week in Houston.

A day-long parade of experts from across the energy spectrum offered their thoughts on what’s ahead for the industry at the annual Deloitte Oil & Gas Conference.

ExxonMobil Vice President Bill Colton, who’s in charge of corporate strategic planning, pointed to the constant gains in North American reserves reported in the latest World Energy Outlook by the International Energy Agency (IEA) (see related story). Those reserves increases, he said, have come about because of human innovation.

“This why those who talk about peak oil have to revisit that thought,” Colton said. “This is a technology story about good, old-fashioned human innovation…In the deepwater, in unconventionals like oilsands and tight oil we have seen tremendous growth rates in supply…It’s amazing what people can do now, drilling thousands of feet below the ocean floor. It’s quite an inspiring story, having these new sources of supply.”

The continuing growth in global natural gas resources are particularly encouraging, said Colton. “We do have conventional and unconventional resources around the globe. Note, we’re talking about 28,000 Tcf of gas,” according to IEA’s new estimate. “That amounts to 250 years of supply coverage.” North America “has a particularly attractive resource endowment, particularly on unconventionals…Here in the U.S., the story is dominated by unconventionals.”

ExxonMobil’s annual global energy outlook last December, which last year projected reserves estimates to 2040, predicted that 70% of U.S. gas by then would be from unconventionals (see NGI, Dec. 12, 2011). The next report should be published in the next few weeks. The North American gas outlook will only improve in the coming decades, as will tight oil.

“As we do every year, every time we do our outlook, the number has indeed risen, and we expect tight oil to be higher” in this year’s report. “We try to get a balanced outlook, and not the most optimistic outlook. We look at what is reasonably possible. The world is changing fast in that [tight oil and gas] space.”

ExxonMobil does its analysis “play by play,” said Colton. “We can’t always extrapolate what a producer is doing in one play to another, one region to another…But we get a pretty good idea of decline curves, which tend to get a stable flow over time. We work that into the outlook and put it into the forecast. In new areas, we have a rough destination of how they will play out over time.”

Global gas growth is a mixed picture, but there is “tremendous growth” in liquefied natural gas (LNG), he said. “Where the original markets were, it’s continuing to grow strongly.”

However, ExxonMobil doesn’t share any enthusiasm — outside of fleet vehicles — for LNG or compressed natural gas for cars. The car market is “an area to watch,” but the costs appear to outweigh the benefits (see related story. “There will be two subsets of transportation; there will be fleets…to the same depot to fuel infrastructure. It makes sense to do that…Another interesting segment is LNG for long-haul trucking. The economics for that look interesting also. It will take time, but both of those subsets look good…

“For cars, frankly with the tanks required and all of the infrastructure needed, the math is marginal at best,” he said. “We don’t think it’s a big growth area. The markets will decide over time and customers will decide. It’s a market to watch” (see related story).

Energy use “evolves over time,” said the ExxonMobil executive. “We can’t turn the world of energy over in just a few years. It takes a long time. Investments have lives of 50 years or longer. This goes back to 1850 and started with biofuels (wood) then the industrial revolution brought coal, then when cars came along oil became No. 1…The point is, it’s driven by markets and human innovation…The good news is we can do all of these things,” and “free trade is good for our country. It’s clearly a good thing for the growth of the U.S. economy.”

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.