Technology and deregulation are viewed as the preeminent driversfor change in the energy industry by executives speaking last weekin Houston at the 17th congress of the World Energy Council.Indeed, change – of the fast-paced and relentless variety – seemedto be regarded as a given by most at the congress.

Texaco CEO Peter I. Bijur called these the last days of thetraditional oil company. “And its demise is related to the verytopics of this conference – technology and development. I believethe companies that transcend and prosper will be new corporatebeings – new in outlook, new in attitude and new in purpose.” Heinvoked the words of Jonathan Swift, saying vision is the art ofseeing 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 ofthe impossible,” said John Browne, group CEO of British Petroleum.”Progress has always required a redefinition of the possible, andscience has always responded to that requirement.”

In his remarks, Enron CEO Kenneth L. Lay predicted technologicaladvances in alternative energy, such as wind and solar power, aswell as improvements in gas and oil efficiencies will save theenvironment and bring reliable energy to countries currently doingwithout.

The three executives’ speeches dovetailed with that of Secretary of Energy Bill Richardson. Richardson said future energyneeds must be met and environmental consequences mitigated. “Thiscan only be accomplished through a substantial and sustainedcommitment to science and technology. We can strategically andefficiently manage our energy resources through a concertedinvestment in research and development which will advance allenergy options: oil, gas, biomass, hydropower, wind, nuclearfission and fusion, and solar.”

Bijur recounted creating a team of Texaco employees to formulatepredictions for the oil industry’s future. Three scenarios emerged.The first suggests a decline in the industry’s access to oil. “Thisdeclining access will not be caused by expropriation as in erasgone by, but by a change in the nature of competition. We believethat host governments will gradually exert more control over theirown natural resources.

“We see innovative companies emerging, companies that will offerthe necessary technical expertise without insisting upon ownershipinterest. These high-tech, high-service, high-solution companieswill enable host governments to realize the full value of theirassets.” With the erosion of the oil company’s upstream producerrole the value of its knowledge will be its true worth.

The second Texaco scenario focuses on the downstream andpredicts new options coming to consumers from innovators, such asMicrosoft, Wal-Mart, and Sprint, who are not currently in theenergy business. With this comes commodity convergence. “Eventuallythe distinction between oil, gas and electricity will blur as newcompetitors offer customers ‘units of power’ from a variety ofsources, rather than individual products.”

Technology and the environment take center stage in thecompany’s third set of predictions. “We will see multiple ways topower cars – hybrids, advanced batteries, fuel cells, even carsthat run on pure hydrogen. How soon? Prices dropped dramaticallyand power increased exponentially with microchips. Why should thechemical reaction in fuel cells be exempt from such scientificbreakthroughs? Who among us would want to bet against technology?”

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