Editor's column Although the oil and gas industry can be full of surprises, its executives tend to rally around a consensus point of view on where the market and industry are headed. For the past 2–3 years, the hundreds of executives from around the globe who attend the annual CERAWeek conference in Houston have painted a grim picture of the present and perhaps the future, and were right in early 2015 when they agreed that the current downturn was looking a lot like the severe one that occurred in the 1980s. But at this year’s gathering, held during the first week of March, there was a lack of consensus about the industry’s short- and medium-term future, and some opinions were at odds with the views that are being played out in the media and other public forums. Although executives at Shell and BP pointed to climate change, or reaction to climate change, as being a real threat on the horizon, others disagreed. Although acceptance of electric vehicles is rising and strides have been made in battery technology. Saudi Aramco’s chief executive officer said alternative vehicles offer little threat to the industry. “I am not losing any sleep over the idea of peak oil demand or stranded resources,” Amin Nasser told the gathering. The success of electric vehicles is not guaranteed, he said, adding that “the future role of oil is widely misunderstood.” But elsewhere at the conference, the chairman of General Motors told the gathering that the company’s “commitment to an all-electric, zero-emissions future is unwavering, regardless of any modifications to future fuel economy standards,” and an electric car was on display. BP called on the industry to reduce greenhouse gas emissions and Shell CEO Ben van Beurden said that the necessity for a lower-carbon future was already here. “There is no other issue with the potential to seriously disrupt our industry on such deep and fundamental levels as climate change,” he said. OPEC and the International Energy Agency (IEA) called on the industry to invest more in oil and gas exploration and production, warning that current investment levels are not high enough to meet future hydrocarbons demand. Others saw oil production from the US, and particularly the Permian Basin, swamping consumption needs for several years. The IEA forecasts that US oil production will represent 60% of new global output to 2023, and that other non-OPEC output will take up the rest. Permian production will soon hit 3 million B/D, and the US may soon overtake Saudi Arabia as the world’s second-largest producer behind only Russia. Some independent producers, however, noted that several companies had missed their unconventional production targets in the fourth quarter of 2017 and will likely do so again in the first quarter of this year. Labor shortages, infrastructure bottlenecks, and lingering problems over “frac hits” may be issues, as well as the reality that many unconventional “child” wells are not nearly as productive as the parent wells. If there was consensus, it was that the industry is in a better place than it was a couple of years ago. Sessions were certainly more optimistic, although cautiously, and there was little talk of oil prices getting out of the $50–65/bbl range. And there was a sense that the uneasy alliance between OPEC and shale producers, which one executive described as “walking a tightrope,” would continue.
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