Lead participants in a major report by the National Petroleum Council (NPC), which was adopted Wednesday, urged Congress and other energy policymakers to use the report’s conclusions and recommendations to guide their future actions.

“I hope this report will form and shape the energy debate” in Congress, said Alan J. Kelly, chairman of the coordinating subcommittee that worked on the report and former executive with ExxonMobil Corp.

“I encourage those involved in [shaping] legislation to read our report,” he said during a press briefing on the 400-page-plus report, which was submitted to Energy Secretary Samuel Bodman at an NPC meeting in Washington, DC. It’s “important that future [energy] policies are grounded in reality.”

The report imposes a duty on policymakers to take on some difficult challenges with respect to energy, said Deputy Energy Secretary Jeffrey Clay Sell, who was the report’s co-chair.

The lead participants declined to take a position on energy legislation pending in the House and Senate. However, when asked whether a contentious House energy policy reform bill that would impose new restrictions on oil and natural gas producers was consistent with the NPC report’s recommendations, Donald L. Paul, who chaired the supply task group, indicated that it wasn’t.

“If you begin to eliminate branches of opportunity today, the chances are you’re raising the risk…for eliminating the flexibility you will have to deal with uncertainties in the future,” said Paul, vice president and chief technology officer with Chevron Corp.

The NPC is a 175-member oil and natural gas advisory group that reports to Bodman. The study on the ability of the global oil and natural gas supply to keep pace with world demand through 2030 was requested by Bodman in October 2005.

The final report concludes that “oil and natural gas will retain their preeminent position in the hierarchy of U.S. energy supplies for some time to come,” Bodman said. “But we must be mindful of our environmental responsibilities and the [needs of] future generations, so we have to aggressively pursue new energy options and alternatives,” he noted.

“By this I mean not only solar and wind power, but among other strategies the increased use of nuclear power, environmentally responsible electricity generation through coal-fired plants that utilize carbon capture and sequestration technology, and greater reliance on biosciences and biofuels to produce fuels for use in the transportation sector,” he told NPC members.

The report finds that “all forms of energy, traditional and alternative, fossil fuels and renewables, will be needed to meet the world’s [energy] needs” through 2030, Bodman said. It recommends a number of supply- and demand-side strategies that the United States can pursue to achieve this goal. “Our goal is to do more with less, rather than to force the American people to do less because the supplies are not available,” he noted.

“I will read the report thoroughly and will consider its recommendations with great care,” Bodman said. “We are at a very critical stage in developing an energy policy for this country.” The NPC report, which he called a “landmark” effort, “requires us to soberly assess what we will look like in the future and how to plan for how we will get [there].”

The world is not running out of energy resources, the NPC report concluded. But it’s unlikely that traditional oil and natural gas resources alone will be sufficient to meet the growing global demand for energy through 2030, it said (see Daily GPI, July 18).

“It is a hard truth that the global supply of oil and natural gas from conventional sources relied upon historically is unlikely” to meet the projected 50-60% growth in demand over the next 25 years, said the report titled “Facing the Hard Truths About Energy.” It noted that there are a number of risks, such as political and economic, that create significant challenges for traditional oil and gas to satisfy demand.

The United States, once the largest oil producer in the world, is now ranked behind Russia and Saudi Arabia. Domestic oil production has fallen steadily over the past 35 years, while U.S. natural gas production has been more stable. Meanwhile, the demand for both resources has risen significantly, creating a gap that is being filled by imports, the study noted. Many forecasts believe the gap will only widen over the next 25 years.

To address the supply-demand gap for conventional resources, the United States and other countries must look to other energy resources, including nuclear, biomass, renewables and unconventional oil and gas, wrote the NPC, which was chaired by retired ExxonMobil CEO Lee Raymond. It also cited the need for increased efficiency in the transportation (fuel economy), residential, commercial and industrial sectors. This marked the first time the NPC conceded that alternative fuels and efficiency measures will play a critical role in meeting future energy demand.

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