Tomado de la pág.

de CHEVRON, SECCIÓN : will you join us (Noviembre,

15, 2005)

http://www.willyoujoinus.com/issues/alternatives/
TEMAS
• Demand
• Supply
• Population
• Geopolitics
• Environment

SUPPLY
• Intro |
• Oil and Gas |
• Renewables |
• Other Alternatives |
• What’s the challenge? |
• What’s next?

Introduction
Fossil fuels currently supply most of the world’s energy, and are expected to continue to do so for
the foreseeable future.1 While supplies are currently abundant, they won’t last forever.2 Oil
production is in decline in 33 of the 48 largest oil producing countries,3 yet energy demand is
increasing around the globe as economies grow and nations develop.4 Abundant energy drives
economic development, which in turn creates demand for still more energy.5 But it also puts
pressure on supply and impacts the environment. Where does our fuel come from, how is our
energy supply and the sources of energy changing, and what can we expect in the future?

1. World Energy Outlook 2004, p. 29.

2. Ibid.
3. Vital Signs, Worldwatch Institute, 2005, p. 30.
4. World Energy Outlook 2004, p. 29.
5. International Energy Outlook, 2004, p 11.
Oil and Gas
Oil and gas currently provide more than half of the world’s energy supply, and according to the
International Energy Agency, they—along with coal—will continue to be the major sources of
energy well into the 21st century.6 OPEC provides about 40% of the world’s oil, although its
share is slated to grow. While output of conventional oil and gas from areas like Russia and the
Caspian region could rise, North America and the North Sea are expected to decline gradually.7
Over the longer term, where oil and gas are found and in what form will undergo a
transformation. Where costs were once prohibitive, energy companies are using new technologies
to extract oil and gas from existing reservoirs.8 And offshore technologies are allowing
companies to find and extract oil and gas in deep ocean water—a location that was considered
inaccessible just a few years ago.9 Fossil fuels also exist in unconventional forms—hydrocarbons
contained in oil-sands, and even shale are believed to have more energy content than all the oil in
Saudi Arabia.10 The catch is that it may currently take more energy and may cost more to extract
and produce oil from some of these unconventional forms than would be gained.
Then there’s natural gas. Getting natural gas to market takes time and investment. But gas is a
cleaner source of energy than oil or coal, and emits fewer greenhouse gases.11 And natural gas
will only increase in significance. Demand for gas is projected to grow 2.8 % annually through
2025,12 somewhat faster than demand for oil.

6. Ibid.
7. Ibid.
8. Chevronwebsite
http://www.chevron.com/technology/core_technologies/.
9. Ibid.
10. USAToday,9/7/04
http://www.usatoday.com/money/industries/energy/2004-09-07-oil-sands_x.htm.
11. Naturalgas.org
http://www.naturalgas.org/environment/naturalgas.asp.
12. International Energy Outlook, 2004

Renewables
Renewable sources of energy (biomass, solar, wind, hydro and geothermal) are self-replenishing
and clean, and currently contribute 15% of the world’s energy supply.13 Solar power is
expanding as technology improves and its cost becomes more competitive.14 Commercial wind
turbines are now harnessing energy in over 65 countries, making wind power the world’s fastest
growing source of energy after solar.15 And geothermal energy—literally "heat from the earth"—
is meeting a significant portion of electrical power demand in several developing countries.16
But each of these sources has its limitations—technologies are still developing and costs are high
in many cases. While renewables will continue to play a growing role, they aren’t expected to
overtake fossil fuels in the near future in meeting global energy demand.17

13. Tomorrow’s Markets, World Resources Institute 2002. p. 25.

 14. Wall Street Journal, June 2, 2005

http://www.seia.org/news/external/WSJJune2_2005.asp.

15. Vital Signs, p. 34.

16. US Newswire, May 16, 2005

http://press.arrivenet.com/pol/article.php/638535.html.

17. World Energy Outlook 2004, p. 29.

Other Alternatives
Nuclear power has its proponents and skeptics, but it may reemerge as a significant source of
energy.18 It has been developed extensively in several European countries, and currently
provides 75% of France’s electricity.19 While concerns over operating safety and waste disposal
linger, some environmentalists and governments find nuclear power appealing because it is
relatively clean and emits no greenhouse gases.20
Hydrogen also holds some promise in powering fuel-cell vehicles. The issue is finding sources of
pure hydrogen. Currently, the least expensive way of deriving hydrogen is by reforming natural
gas, which means we will continue to be reliant on fossil fuels. Another way to produce hydrogen
is through electrolysis of water, using electricity or sunlight.21

18. International Energy Outlook 2004, World Energy and Economic Outlook, p. 3.
19. http://www.ambafrance-us.org/intheus/nuclear/n2f2/spring2003.asp.
20. New York Times, May 29, 2005

http://www.climateark.org/articles/reader.asp?linkid=42280.

21. Energy Information Administration website

http://www.eia.doe.gov/kids/energyfacts/sources/SecondaryHydrogen.html.

What’s the challenge?

The challenge for the energy sector is to optimize the development and use of all sources of
energy, and drive commercialization of new and emerging sources through successful business—
while continuing to meet the world’s growing energy demands efficiently and with minimal
environmental impact.

What’s next?
Oil, gas, and coal will continue to be a significant energy source for decades to come.22 But, over
time, they will likely share more and more of the market with other sources of energy.23
The sources of energy are changing as energy companies continue to meet the challenge of
fulfilling the world’s demand in the near term and well into the future.

22. World Energy Outlook 2004, p. 29.

23. International Energy Outlook 2004, World Energy and Economic Outlook, p. 2.

DEMAND
• Intro |
• Where is demand coming from? |
• Why is demand increasing? |
• What's the challenge? |
• What's being done? |
• What's next?

Introduction
The 20th century was marked by rapid growth and an increase in prosperity throughout the
world.1 But the past pales in comparison to the pace at which the 21st century is advancing.2
Populations are increasing, economies are developing, and the world is consuming energy faster
than ever before.3
By 2020, some experts predict the world’s energy consumption will be 40% higher than it is
today.4 Efficiency, improvements, and conservation are part of the solution, but will not, in
themselves, meet the need for more energy.5

1. Tomorrow’s Markets, World Resources Institute, 2002, p. 22.

2. For example, the number of patents accelerated rapidly near the end of the 20th
century:http://www.pbs.org/fmc/book/14business9.htm
Moore’s Law in computing leads to the doubling of processing capacity every 12
months:http://www.techtrend.com/blog/archives/000009.html
For theory of accelerating change see:
www.kurzweilai.net/articles/art0563.html?printable=1.
3. Tomorrow’s Markets, pp. 10, 12, 24.
4. International Energy Outlook 2004, p. 1.
5. Tomorrow’s Markets, pp. 24, 28, 29 (reflects current relationship, not future).

Where is the demand coming from?

The biggest leap in energy consumption will come from emerging economies, like China and
India, where populations are expected to grow by 25% over the next two decades, and economic
output and standards of living will rise dramatically.6 Energy demand in China and India alone is
expected to double by 2025.7 But the issue isn’t limited to developing countries.
Rising energy demand in developed countries will add to the pressure on supply. The US, for
example, is home to 4% of the world’s population but is consuming 25% of the world’s energy.8
As wealthier countries in general continue to prosper, their energy needs will continue to grow
accordingly.9

6. International Energy Outlook 2004, p. 5.

7. Ibid., p. 1.
8. Cambridge Energy Research Associates and US Census Bureau.
9. Tomorrow’s Markets, p. 24

Why is per capita demand for energy increasing?

Increased energy use is a natural consequence of economic growth and improving living
standards in the developing world. Where people once burned wood for heating and cooking, oil
furnaces, stoves, and refrigerators are now more available and affordable. In many Asian cities,
bicycles are being replaced by automobiles, increasing mobility and convenience (as well as
congestion and pollution), and providing more options for employment and leisure.10 At the
same time, soaring business activity and industrial output are also boosting demand.
In the developed world, houses are getting bigger, and are increasingly "wired" with computer
and audio and video equipment. And people are driving their cars—which in many cases are no
more fuel efficient than cars of 20 years ago11—more miles each year.12

10. ChinaDaily
http://www.chinadaily.com.cn/english/doc/2004-11/11/content_390685.htm.
11. Cambridge Energy Research Associates and US Census Bureau.
12. Automotive Aftermarket Suppliers Association

http://aftermarketsuppliers.org/articledetail.php?articleId=696

What’s the challenge?

The challenge is to provide the clean, affordable energy necessary for rapid economic growth and
rising living standards in emerging economies, while also fulfilling demand in the world’s more
developed economies. This will require a combination of increasing conservation, expanding and
diversifying our energy supply, and improving energy efficiency

What’s being done about it?

The increase in demand is being partially offset by conservation and improvements in energy
efficiency by industry and governments.13
The concern over climate change and the adoption of the Kyoto Protocol by most industrial
nations14 has focused businesses of all sizes to reduce their electricity consumption,
simultaneously reducing their consumption of fossil fuels while reducing their emissions of
greenhouse gases.15
Cogeneration, which is nearly twice as efficient as traditional methods of producing steam and
power separately, has created energy efficiencies in the manufacturing sector.16
In the transportation sector, hybrid vehicles are proving to be affordable and realistic options for
consumers,17 while energy-efficient public transportation is providing an alternative to private
cars.18
And the search continues for new sources of energy, from both fossil fuels and alternatives.

13. Tomorrow’s Markets, p. 24.

14. Kyoto Protocol Signatories

http://unfccc.int/essential_background/kyoto_protocol/status_of_ratification/items/2613.p
hp.

15. The Carbon Disclosure Project documents the efforts of the FT Global 500 Index
companies to reduce energy consumption and greenhouse gas emissions
http://www.cdproject.net.
16. US EPA, Combined Heat and Power Partnership
http:www.epa.gov/chp/index.htm.
17. The Detroit News charts growth in hybrid vehicle sales
http://www.detnews.com/2005/autosinsider/0505/30/A01-197580.htm.
18. Center for Transportation Excellence
http://www.cfte.org/trends/benefits.asp

What’s next?
Energy efficiency and conservation will continue to play an important role in slowing the growth
in our energy demand.19
In addition, continued improvements in technology, lightweighting of materials, use of alternative
materials (such as non-petroleum-based plastic), and personal and industrial recycling must also
be encouraged.20
It is in the interests of all stakeholders—energy producers, industrial users, governments and
consumers—to make the energy sources we have go as far as they can go.

19. 2004 World Energy Outlook

http://www.iea.org/Textbase/press/pressdetail.asp?PRESS_REL_ID=137.
 20. Winning the Oil End Game, Rocky Mountain Institute, 2004
http://www.oilendgame.com/pdfs/WtOEg_ExecSummary.pdf.

POPULATION
• Intro |
• What’s happening now? |
• What’s on the horizon? |
• What’s the challenge? |
• What’s being done? |
• What’s next?

Introduction
At 6.4 billion and climbing, the world’s population is expected to exceed 9 billion by 2050.1 Yet
our known fossil fuel reserves are in decline, and alternative energy sources are not expanding
rapidly enough to meet future demand.2
Only by working together to create innovative solutions can we meet the challenge of delivering
energy for human progress today and tomorrow. Here is some background on the world
population outlook.

1. World Population 1950-2050, US Census Bureau

http://www.census.gov/ipc/www/worldpop.html.
2. How Long Will the World’s Oil Last?, Energy Bulletin, 9/09/04
http://www.energybulletin.net/2007.html.

What’s happening now?

More than 80% of the world’s people live in developing countries and nearly 40% of them are
children and teenagers.3 While population growth is near zero in the world’s richest countries,
rapid growth in low and medium-income countries is contributing many potential workers and
consumers to the world’s economy.4
The world is getting wealthier5 and the economies of poor countries are developing, yet poverty
remains a major problem. Nearly four in five people in the world are considered poor, existing on
less than US$10 per day.6 The availability of affordable energy will be critical to raise their
standard of living. Meanwhile, many of the world’s ecosystems are under stress, and will become
more so as an increased population puts increased demand on resources.7

3. Tomorrow’s Markets, World Resources Institute 2002. p 10.

4. Ibid. p 11.
5. http://soundmoney.publicradio.org/archive/old_features/chris970913.htm
6. Tomorrow’s Markets, World Resources Institute 2002. p 13.
 7. Stress on the Environment, Society and Resources, Global Issues
http://www.globalissues.org/EnvIssues/Population/Stress.asp.

What’s on the horizon?

Developing countries like India and China are experiencing population growth and rapidly
improving standards of living, while energy consumption continues to rise in the developed
world.8 Together they will place growing strain on the energy equation. And the environmental
impacts of producing, delivering, and using energy will become even more critical than they are
today.9

8. Energy Information Administration

http://www.eia.doe.gov/oiaf/ieo/world.html.

9. The Hidden Cost of Fossil Fuels, Union of Concerned Scientists

http://www.ucsusa.org/clean_energy/health_and_environment/page.cfm?pageID=88.

What’s the challenge?

The challenge lies in meeting this growing demand in a way that improves quality of life today
without sacrificing it for future generations. This requires us to use all the resources we have at
our disposal, and continue to develop long-term solutions that foster social progress while
protecting the environment.10

10. World Summit for Social Development Copenhagen, 03/95

http://www.earthsummit2002.org/wssd/wssd/wssd3.htm.

What’s being done about it?

Both individuals and institutions are conserving energy in ways large and small:

• companies and governments are making large commitments to research and development
of advanced technologies and alternative sources of energy
• auto makers, jet engine manufacturers, electric utilities, and many others are finding ways
to improve energy efficiency and reduce waste
• energy companies are bringing to market unconventional and alternative fuels, such as tar
sands, liquefied natural gas (LNG), gas-to-liquids, solar, wind, geothermal and biofuels
• and millions of small businesses and individuals are doing their part to reduce energy
consumption

But we are still a long way from figuring out how to continue meeting energy demand as
population increases.
What’s next?
There is no silver bullet solution for meeting future demand. But there are many ways we can
address the issue:

• improved energy policies

• greater conservation
• alternative energy sources
• new sources of fossil fuels
• increased yield from existing reservoirs

These are all part of the solution, but each has its costs and benefits. The challenge we face is to
use all resources at our disposal in a way that will improve the lives of the 6.4 billion people on
the planet today, while preparing for a future world of 9 billion.

GEOPOLITICS
Where are we now?
As globalization continues to dissolve borders, nations are becoming more and more energy
interdependent. Yet the majority of current hydrocarbon resources are concentrated in just five
countries.2 While this has long been the case, what is different now is that more stable sources of
supply—those in the U.S., Canada and Western Europe—are for the most part mature resource
basins, declining in production.3
In the news today, we hear about uncertainties around the world. Even if disruptions do not affect
supply in any meaningful way over the long-term, they do create a psychological risk factor,
which can lead to short-term volatility in energy markets, and a reluctance to invest in those
regions.4

2. Middle East to Dominate World Oil for Many Years, International Monetary Fund, March
2003
http://www.imf.org/external/pubs/ft/fandd/2003/03/okog.htm
3. Accessing the Coal Resources of the United States, US Geological Survey July 1996
http://energy.usgs.gov/factsheets/nca/nca.html
4. Chevron website
http://www.chevron.com/news/speeches/2004/2004-06-24_oreilly.asp

What’s the Challenge?

A stable social, political and business environment is essential for attracting long-term
investments. That means a reliable legal framework that recognizes the rule of law and respects
contracts—which in turn leads to predictability and security. Revenue transparency is necessary
to reduce the occurrence of corruption and abuse. And the basic needs of the local people must be
met to provide a reliable work force, supply chain and market for products.5

5. The Rule of Law in Western Thought, The World Bank Group

http://www1.worldbank.org/publicsector/legal/western.htm

What’s next?
When these basic conditions are in place, investment can flow and partnerships can thrive.
Private industry will be more likely to bring their resources and expertise to bear on the
challenges of finding new sources of energy.6

6. Ibid.

ENVIRONMENT
• Intro |
• Air |
• Water |
• Global Climate Change |
• Ecosystems and Biodiversity |
• Workable Solutions

Introduction
Every person on the planet is dependent on the natural resources that make up our environment—
our "natural capital."1 We sometimes take it for granted, but this capital is vital for sustainable
economic and social progress.2 Energy is a key driver of economic progress throughout the
world, yet the development, transport, and use of energy from all sources impact the
environment.3 So how do we protect our "natural capital" while ensuring an ongoing supply of
reliable and affordable energy?

1. For example, forests provide wood and paper, as well as oxygen; oceans provide food to
eat; agriculture is dependent on fertile soils, etc.
2. Our economies are dependent on raw materials taken from the natural environment.
3. Tomorrow's Markets, p. 24.
Air
The air we breathe day in and day out has a significant impact on our health.4 And while air
quality in many cities in North America and Europe has improved significantly over the last two
decades, many cities in both developed and emerging economies have severe air pollution
problems.5 As economies and urban center populations continue to grow, the air quality
challenge will grow as well. The burning of fossil fuels for power generation and transport has
been a significant contributor to urban air pollution.6 That’s changing for the better in many
places with the spread of low sulfur fuels which are less polluting.7 And while switching to
renewable energy sounds like an obvious solution, the generating capacity and cost of
alternatives remain significant obstacles.8 Meanwhile, technology, regulation, and consumer
choices can all play a role in reducing the impact of our energy use on the air we breathe.9, 10

4. Ibid., p. 26.
5. Ibid., pp. 26, 27.
6. Ibid., p. 26.
7. American Public Transportation Association
http://www.apta.com/services/intnatl/intfocus/lowsulfur.cfm
Asthma Regional Council
http://www.asthmaregionalcouncil.org/about/focus_diesel.html.
8. International Energy Outlook 2004.
9. Urban Air Quality Management, World Bank.
10. For example, more energy efficient industrial process, minimum efficiency standards, and
energy conservation practices.

Water
Energy development and delivery requires the use of, or affects, water in many different ways.
Water is used in the extraction of oil and gas, and as a heat exchanger in refineries, gas plants and
nuclear power plants.11 Crude oil, gasoline and LNG are often transported on rivers and across
oceans. And hydro dams use water directly to generate electricity. But many parts of the world
face a scarcity of clean water, and the crisis is expected to grow.12 Over the past century, world
water withdrawals have increased almost twice as fast as population growth, and in many places
currently exceed recharge capacity.13 In other areas, industrial, residential and agricultural
development have impaired water quality.14

11. 2002 ChevronTexaco Corporate Responsibility Report, p. 47.

12. Tomorrow's Markets, p. 37.
13. Ibid., p. 36.
14. Ibid., p. 36.
Global Climate Change
One of the most critical environmental challenges facing the world today is reducing long-term
growth in greenhouse gas (GHG) emissions.15 The use of fossil fuels to meet the world's energy
needs has contributed to an increase in GHGs—mainly carbon dioxide and methane—in the
earth's atmosphere.16 Many think this increase is leading to climate change, with potentially
adverse effects on people, economies, and the environment—from coastal flooding, to droughts,
to changes in ecosystems and biodiversity.17, 18 Many governments and businesses agree on the
importance of addressing the risk of climate change.19 The challenge is to do so while still
providing the energy required to meet the demands of growing populations and economies.

15. So say business leaders at the 2005 World Economic Forum.

http://www.weforum.org/site/knowledgenavigator.nsf/Content/_S1531?open.

16. Chevron website

http://www.chevron.com/social_responsibility/environment/global_climate.asp.

17. Chevron website

http://www.chevron.com/social_responsibility/environment/global_climate.asp.

18. IPCC Climate Change 2001.

19. Kyoto Protocol Signatories

http://unfccc.int/essential_background/kyoto_protocol/status_of_ratification/items/2613.p
hp

Ecosystems and Biodiversity

Ecosystems support our livelihoods and well-being. The world’s grasslands, forests, oceans,
coastal areas, and rivers provide the food, water, air, biodiversity, and climate stability we need to
thrive. But many of the world’s ecosystems are under significant stress; 10% of all known plant
species are under threat of extinction. Wetlands and forests are disappearing.20 Dams built for
irrigation and energy generation fragment rivers and destroy aquatic habitats.21 Acid rain
resulting from power plant emissions harms forests, lakes and agriculture lands.22 Deforestation
of land to make way for housing, farming, grazing, roadways and resource extraction reduces
biodiversity, accelerates species extinction, and compromises climate stabilization.23 And
populations which are growing in numbers and wealth will only increase the pressure on the
ecosystems that sustain us.
Top

20. Tomorrow’s Markets, p. 32

 21. International Development Studies Network

http://www.idsnet.org/Resources/Dams/Development/impact-enviro.html.

22. EPA, Effects of Acid Rain

http://www.epa.gov/airmarkets/acidrain/effects/index.html.

23. Vital Signs, pp. 92-93.

Workable Solutions
So how do we address the world’s expanding need for, and impact on, "natural capital," without
diminishing its availability in the future? That will require awareness, vision, thoughtful
assessment, creativity, political will, and cooperation.
Technology is critical to lessening energy development’s impact on our environment (for
example, directional drilling reduces the footprint of exploration and production)24 and advanced
engines reduce pollution and greenhouse gas emissions.25 The rise of alternative energy sources
can make a positive contribution.26 Regulation has a role to ensure that all companies meet
minimum public expectations. And every one of us, companies and individuals alike, need to
understand that our own behaviors and consumption patterns impact the environment, and do
what is within our ability to protect the resources we all depend on.
Top

24. American Petroleum Institute

http://api-ec.api.org/environ/index.cfm?bitmask=001003002001000000.

25. Union of Concerned Scientists

http://www.ucsusa.org/clean_vehicles/trucks_and_buses/page.cfm?pageID=238.

26. 2002 ChevronTexaco Corporate Responsibility Report, p. 41