ChevronTexaco CEO Dave O’Reilly said it’s time for the United States to “get real about energy,” and encourage responsible development in remote or inaccessible regions like the Outer Continental Shelf, Alaska and the Rocky Mountain states.

Speaking on Wednesday as part of the U.S. Chamber of Commerce’s CEO Leadership Series in Washington, DC, O’Reilly said higher energy prices, for both crude oil and natural gas, have become a “page one story…a presidential campaign issue, and a growing concern” domestically.

“We’re emerging from a period of cheap oil and even cheaper natural gas, a period in which American consumers and industry were the biggest beneficiaries in the world,” he said. “This model doesn’t exist anymore. It’s time to create a new one.”

By historical standards, today’s energy prices remain “bargain,” he said, but the higher prices “may not be a short-term aberration. I believe energy prices are going to face continued pressure — reflecting fundamental changes in demand, supply and geopolitics. We are, in fact, witnessing a change in the basic energy equation.”

The “real growth is in the demand for cleaner-burning natural gas,” he said. “It’s projected to increase by approximately 25% over the next 15 years. With this kind of demand growth, increasing pressure is put on finding supplies and getting those supplies to market — where they’re needed and when they’re needed.”

However, O’Reilly said many Americans don’t understand what it takes to build more pipelines and power plants.

“It is becoming more challenging — and more expensive — to develop new production sources today,” said O’Reilly. “In many places, the easy discoveries are behind us. Increasingly, future supplies are in deepwater and remote areas. Developing these sources takes more investment, more innovative technology, more sophisticated risk management and more partnerships.”

Bringing new production online has become more difficult, because the “so-called ‘stable’ sources of supply, those in the U.S., Canada and Western Europe, are for the most part mature resource basins,” O’Reilly said. But as the United States turns to more “turbulent” regions around the world, it has created a new “energy equation that is significantly different from the past.”

The United States has to have a “factual, pragmatic discussion about our near- and medium-term energy needs…We do not have the luxury of favoring some sources over others.” O’Reilly said, “I would suggest that now is the time to play ball…In the U.S., for instance, that means allowing access.”

Natural gas, he said, “needs to be commercialized sensibly and aggressively.” He pointed to the growing need for importing liquefied natural gas (LNG) to domestic markets, but noted that the energy industry has to “do a better job of educating the public about the need for…and the merits of…LNG.”

O’Reilly said “abundant, predictable energy supplies are a key strategic business issue for every sector of the American economy.” But “we need to have a unified voice on this, and the business community needs to embrace energy as a strategic issue, not just an expense item.”

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