Industry Leaders Tout Technology, Change at WEC
Technology and deregulation are viewed as the preeminent drivers
for change in the energy industry by executives speaking last week
in Houston at the 17th congress of the World Energy Council.
Indeed, change - of the fast-paced and relentless variety - seemed
to be regarded as a given by most at the congress.
Texaco CEO Peter I. Bijur called these the last days of the
traditional oil company. "And its demise is related to the very
topics of this conference - technology and development. I believe
the companies that transcend and prosper will be new corporate
beings - new in outlook, new in attitude and new in purpose." He
invoked the words of Jonathan Swift, saying vision is the art of
seeing the invisible.
The view from the other side of the Atlantic is much the same.
"If politics is the art of the possible, technology is the art of
the impossible," said John Browne, group CEO of British Petroleum.
"Progress has always required a redefinition of the possible, and
science has always responded to that requirement."
In his remarks, Enron CEO Kenneth L. Lay predicted technological
advances in alternative energy, such as wind and solar power, as
well as improvements in gas and oil efficiencies will save the
environment and bring reliable energy to countries currently doing
The three executives' speeches dovetailed with that of
Secretary of Energy Bill Richardson. Richardson said future energy
needs must be met and environmental consequences mitigated. "This
can only be accomplished through a substantial and sustained
commitment to science and technology. We can strategically and
efficiently manage our energy resources through a concerted
investment in research and development which will advance all
energy options: oil, gas, biomass, hydropower, wind, nuclear
fission and fusion, and solar."
Bijur recounted creating a team of Texaco employees to formulate
predictions for the oil industry's future. Three scenarios emerged.
The first suggests a decline in the industry's access to oil. "This
declining access will not be caused by expropriation as in eras
gone by, but by a change in the nature of competition. We believe
that host governments will gradually exert more control over their
own natural resources.
"We see innovative companies emerging, companies that will offer
the necessary technical expertise without insisting upon ownership
interest. These high-tech, high-service, high-solution companies
will enable host governments to realize the full value of their
assets." With the erosion of the oil company's upstream producer
role the value of its knowledge will be its true worth.
The second Texaco scenario focuses on the downstream and
predicts new options coming to consumers from innovators, such as
Microsoft, Wal-Mart, and Sprint, who are not currently in the
energy business. With this comes commodity convergence. "Eventually
the distinction between oil, gas and electricity will blur as new
competitors offer customers 'units of power' from a variety of
sources, rather than individual products."
Technology and the environment take center stage in the
company's third set of predictions. "We will see multiple ways to
power cars - hybrids, advanced batteries, fuel cells, even cars
that run on pure hydrogen. How soon? Prices dropped dramatically
and power increased exponentially with microchips. Why should the
chemical reaction in fuel cells be exempt from such scientific
breakthroughs? Who among us would want to bet against technology?"