Technology Drives Prices, Drilling Lower
Certainly not BP's Browne, who offered a litany of E&P
technology advances. "In real terms, oil prices today are more than
40% below where they stood a decade ago and comparable to levels
last seen before the Yom Kippur War 25 years ago. The reason we're
all still in business is that average finding, development and
lifting costs have all fallen - on average by almost a third in
real terms over the last decade."
Besides driving costs down, technology has driven E&P deeper,
growing reserves along the way. "Over 30 billion barrels of
discovered but undeveloped oil lie in deep water together with over
150 Tcf of gas. The best independent estimates say that at least as
much again remains to be found in those areas."
On the demand side, worldwide environmental concerns will create
a larger role for natural gas, said Lay. "Combined cycle technology
for power generation - particularly with natural gas - is the
cleanest fuel source available and accounts for 60% of total new
installed capacity in the U.S. since 1991." Lay pointed out
combined cycle gas plants cost less to build than coal, about $500
per kWh compared to a new coal plant, which costs $1,066 per kWh.
Before 2010, Lay said gas is expected to overtake coal to become
the second most widely used fuel in the world behind oil. "Gas is
abundant - at today's worldwide production rate of 77 Tcf/year,
potential gas resources have a 200-year life and the potential is
probably significantly understated.
"According to a recent Enron study, 44 countries have announced
requirements for clean power plants from gas and renewables
totaling 222,500 megawatts of new capacity over the 1997 to 2015
Lay highlighted technological advances impacting every part of
the energy industry. Automated electricity metering, for instance,
introduced to the market last year, is more precise and improves
load management ability. "These meters diagnose outages, bill with
greater accuracy, protect against tampering and make it easier for
customers to change suppliers. Lay said Enron introduced the first
two-way automated electricity metering system last year.
"With technology, innovation and vision, our transition to a
cleaner world will be seamless, our products and services will be
greatly improved. we will protect the environment from millions of
tons of harmful emissions. and consumers will save billions."
Joe Fisher, Houston
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