Crude oil will continue to be in demand for a very long time yet, the chief executive of Chevron, Mike Wirth, told the New York Times in an interview.
Asked about his take on International Energy Agency predictions of peak oil demand, Wirth said that “First of all, the I.E.A. has not always been right, historically, on things, and it wouldn’t be surprising if the I.E.A. is not right about this.”
“Even if they are, once oil demand reaches a level where it’s no longer growing, it’s unlikely to drop off quickly. It’s more likely to stay at a plateau,” the executive added.
Wirth then went on to explain that oil and gas production is “a depletion business”, meaning that once a barrel of oil is produced, it cannot be produced again. This, in turn, means that investment in new supply is necessary even when demand is not growing—as suggested by the IEA itself more than once, when the global oil market balance threatened to tip into a shortage.
In response to a question on whether Chevron could one day stop producing oil and gas altogether and become a “renewable energy sources” producer, Wirth said “One day, I’m sure it will make sense to do that. Probably a long time from now. When the world stops using oil and gas, we’ll stop looking for it.”
However, Wirth noted, “to stop beforehand runs the risk of creating a lot of adverse consequences in terms of the world not having the energy that it needs.” In that, the Chevron CEO echoes a concern also expressed by other oil industry executives and OPEC officials.
Chevron also put its money where its mouth is with regard to future demand for oil, with its acquisition of Hess Corp and its stake in the Stabroek Block in Guyana, which has turned into the rising star of the global oil stage.
By Irina Slav for Oilprice.com
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