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What EMTM Professionals Should
Know About Energy and Global Warming

In this special InSITE interview, Dr. P. Hugh Helferty, Manager of Products Research and Technology with ExxonMobil, talks with writer Jim Senior. Helferty shares insights into his company’s long-term energy and global warming outlook to 2030. He also offers views on the career impact of new energy technology on EMTM professionals — including business opportunities. Helferty, with a PhD degree in chemistry and an MBA, assumed his current position in March 2005. He leads the Products Research & Technology organization headquartered in Paulsboro, NJ, and has oversight responsibilities for the Paulsboro Technical Center, the Tonen General Research Lab in Japan, and the Sarnia Research Lab in Sarnia, Ontario, Canada.

What is the key driver for the growing energy demand
in the world today?

The increasing gross domestic product in the developing world, especially Asia Pacific, is driving global energy demand. In addition, population growth translates into increased demand for goods and services and a higher standard of living. A lot of energy is required; it’s fundamental to the way we live. So based on our long-term outlook to 2030, we see this energy demand growing across the world by 35 percent with 80 percent of the new demand coming from developing countries, especially China.

Where will the additional energy supply come from?
It’s going to come from multiple sources. In terms of the energy resources, we expect there will be about a one percent annual growth in oil supply, a two percent increase in gas supply, a more than two percent increase in nuclear, and increases in energy supply from alternatives such as wind, solar and bio-fuels at a yearly rate of about nine percent. Wind, solar and bio-fuels start from a small base, but if alternative energy sources get the investment they require and thereby grow annually at a rate of nine percent, they will help to manage greenhouse gases. Also we see a bit of growth overall in coal, but most of that would come from developing countries such as China.

How important is energy efficiency in meeting demand?
Energy efficiency is essential to meet the global demand. If we don’t get more efficient every year, then the actual energy demand, driven by population and economic growth, will be much greater than the projected 35 percent increase. For example, we need better insulation of homes, use of new types of light bulbs, use of smaller vehicles that consume less energy. In fact we believe that the efficiency gains over the time period to 2030 will be greater than the increase in supply from all other sources.

What is the career impact of the global energy
challenge on EMTM professionals?

There are lots of opportunities to lead. That’s because a lot of decisions you’re making — even if you’re not in the energy industry per se — influence energy consumption. Let’s say you’re responsible for a pharma lab; you will want to make energy-efficient decisions to help keep your lab cost-efficient. You will consider the current energy prices and what you might recommend to management if prices rise. I encourage technology managers to pursue energy efficiency whenever they can. EMTM gives you both business and technology aspects. People with science and engineering backgrounds can complement their skills with a business background and utilize their combined technology and business understanding.

Will global warming concerns get lost
in the run for power generation?

No. I think that the global warming concern is going to remain prominent for decades to come. What is needed is technology to meet the increased power demand without adverse environmental impact. Unfortunately, coal, which is plentiful, is not a good example. It’s the fuel that generates the most CO2 emissions. The U.S. gets 50 percent of its energy from coal. China is opening coal-fired power plants at a rate of one per week. The technology we need for coal is carbon capture and storage. You need a way to efficiently capture CO2 as it is produced at a power generation plant. Then you need a mechanism to transport and store that CO2 to ensure it’s not released into the atmosphere. We need to develop and improve this clean coal solution on a commercial scale. People are working on CO2 capture.

What will be the role of gas?
Of the fossil fuels, gas has the fewest contaminants such as sulfur. It’s the cleanest and has the lowest amount of carbon per unit of energy. Of the carbon based fuels, gas is the one that has the largest potential for growth. The key challenge is getting the gas to where the customers are. One of the technologies to address that problem is liquefied natural gas. You cool the gas, put it in large ships, transport it across the ocean, re-gasify it and pump it into the pipeline system to heat your home. While oil might grow at one percent per year over the next 20 years, we estimate that gas will grow twice as fast.

What about nuclear?
Bottom line, if we are serious about reducing CO2 then we are going to have to accept greater use of nuclear power as part of the solution. CO2 emissions associated with nuclear are minimal. France has taken a completely different nuclear strategy than the U.S. About 85 percent of the power supply there is generated by nuclear, so the majority of people there have clearly accepted nuclear. In our long-term outlook, we think that there will be more nuclear power plants in the U.S. and in other nations.

Given their small base today, can alternative energy
sources, such as wind, solar and bio- fuels materially
reduce CO2 emissions?

It varies across those examples. Clearly wind is a good example because there are no emissions associated with it. And solar can be much like that if we can get solar cells to be more efficient. Now in the case of bio-fuels, it’s a mixed story. The reason is that there is substantial energy consumed and CO2 emissions in the actual production of the bio-fuel. If you think about it, you have to prepare the field, sow the crop, fertilize it, harvest it, and process it. Plus you have to transport the fuel to customers. All of these things consume a lot of energy and release greenhouse gases.

In your outlook, the cars we drive, light duty vehicles,
are not so big a factor as we go forward, are they?

They’re not a big factor from the perspective of growth in demand, particularly in the U.S. and Europe, because we see low to no population growth. I don’t think one should ignore the fact that there’s a big base case demand. In the global transportation sector for light duty vehicles, demand is in the range of 15 or 16 million barrels of oil per day. By 2030 we estimate that demand will grow to 20 million barrels per day. To the extent one can reduce that demand — and there certainly is an opportunity to reduce it — that’s good. All you have to do is look at automobile energy efficiency in the U.S. versus Europe and you’ll see there’s potential for greater efficiency in the U.S.

How long do you think oil will be around?
We think oil will play an important role in providing energy for the foreseeable future. Substantial resources remain. No doubt, geologic and man-made barriers can impede the energy industry’s ability to access oil and gas. Yet technology keeps enabling production of oil that otherwise might not have been possible to produce. Take for example the oil sands production in Alberta, Canada, where over one million barrels/day of oil is being produced. Alberta sends oil all the way to the Gulf Coast of the U.S. via pipeline. Then we have successfully used advanced horizontal drilling off the coast of Russia seven miles under the ocean floor. And we’re transporting liquefied natural gas in ships that are 80 percent larger today than just a few years ago. Not that long ago these technologies simply didn’t exist.

Why is the short-term outlook not a good planning tool
for the energy industry?

Energy is a very capital intensive business. The timeframes for the investments are 20 to 30 years. In terms of the overall economics of the investment, short-term perturbations don’t make a huge difference to the economics. To determine the worth of the investment, it’s what you think the energy will be worth over the long haul that is important. So what we do is try to estimate what energy prices may be over the long term and then plan our investments on that basis. From an investment standpoint, many of our projects, just to create the facility that produces energy, take five-plus years. Our capital investments in 2008 were about $25 billion. We have not adjusted our plans at all for our current projects even though the price of oil has dropped dramatically recently.

What must be better communicated to those people who claim to love a clean environment but are unwilling to change habits that cause CO2 and other pollution?
It seems to me, you have to internalize the claim that you want a clean environment. You have to change from merely saying, “I understand my behavior is causing the CO2 emission” to “I’m willing to act on that information and do something about it.” My oldest daughter works for an environmental NGO (non-governmental organization). She has internalized this conservation and energy efficiency issue. She walks most places she goes. If she needs public transportation, she takes the bus. She doesn’t own a car. She uses trains rather than planes to travel if she can. Most people aren’t willing to do that today. What we need are more people to internalize the concept of energy efficiency by personally being more efficient. If everyone moved just a little bit in that direction, the impact on CO2 emissions would be significant.


“Population growth translates into increased demand for goods and services and a higher standard of living. A lot of energy is required; it’s fundamental to the way we live. So based on our long-term outlook to 2030, we see this energy demand growing across the world by 35 percent with 80 percent of the new demand coming from developing countries.”

Dr. P. Hugh Helferty
Manager of Products Research and Technology
ExxonMobil
Paulsboro, NJ

“I think that the global warming concern is going to remain prominent for decades to come. What is needed is technology to meet the increased power demand without adverse environmental impact.”

Dr. P. Hugh Helferty
Manager of Products Research and Technology
ExxonMobil
Paulsboro, NJ

“Energy is a very capital intensive business. The timeframes for the investments are 20 to 30 years. In terms of the overall economics of the investment, short-term perturbations don’t make a huge difference to the economics. To determine the worth of the investment, it’s what you think the energy will be worth over the long haul that is important.”

Dr. P. Hugh Helferty
Manager of Products Research and Technology
ExxonMobil
Paulsboro, NJ

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