Many top corporate and political figures gathered in Houston on Tuesday for the annual CeraWeek conference on the outlook for energy, and they got an earful from John B. Hess, chairman and chief executive of the Hess Corporation.
“An energy crisis is coming, likely to be triggered by oil,” he predicted. “Demand is expected to grow on an annual basis by at least one million barrels per day, driven by the developing economies of the world and by growth in transportation as we go from one billion cars today to two billion cars in 2050.”
The problem, he said, is not that the world is running out of oil. He estimated that while the world has produced one trillion barrels of oil, two trillion more remain on the ground. Meanwhile surplus oil production capacity is three billion to four million barrels a day.
But watch out for the future. “As demand grows in the next decade, we will not have the oil production capacity we will need to meet demand,” Mr. Hess said. “Supply will then have to ration demand, and prices will skyrocket – with the likely outcome of bringing the world’s economy to its knees.”
So where are oil prices going? “The $140-per-barrel oil price of three years ago was not an aberration,” he said. “It was a warning.”
Mr. Hess’s policy prescription was not surprising: he wants more drilling, including in the Gulf of Mexico, and more natural gas used in the generation of electricity, among other proposals. His stark vision of the global energy future stood out nonetheless.
Read more: New York Times