Chairman and CEO, ConocoPhillips
Excerpt from remarks to Boston College’s Chief Executives Club
October 22, 2015
TAKEAWAY: Fossil Fuels
So again I’ll take the GPS and I’ll take the crystal ball. If you got a crystal ball that will help you predict commodity prices, I want one of those as well. But you say how do you manage through this? It’s a pretty volatile time. And why even worry about oil and gas, because renewable energy will take over? In fact that will play a major role in the future energy mix for the globe, and we do expect continued technology improvements in that space. But today we’re a world of seven billion people. Estimates have us growing as a world to nine billion people by 2040. And we’re going to need all the energy sources to fuel that economy.
The IHS here in Boston has studied the time spans historically required for meaningful energy infrastructure change. So for example, replacing a fleet of electric power plants takes 40 years. Replacing a shipping fleet takes 25 years. Heating systems take 20 years. Vehicles—light vehicles—even take 15 years to replace the market. So building major-scale infrastructure from scratch can cost hundreds of billions of dollars, even trillions of dollars, and it happens gradually. And that’s even with pretty dramatic technological changes. Take the changeover from hardwired telephones to cell phones. That’s taken almost 50 years, and there are still growing pains. And we still don’t have cell phones that work everywhere. So it’s an indication how long it takes to flip that infrastructure.
And that’s why natural gas is so important to the energy mix today, first as a major source itself, and second, gas-fired power plants are highly flexible. They’re needed to back up the intermittent solar and wind power that we’re producing. New energy sources like this typically take a half a century or more to assume a major scale. Meanwhile, demand generally remains high for the older sources, or even increases.