Energy security and America

by Tony Hayward , Group Chief Executive, BP, London

Energy security is a front-of-mind issue for the people of the world. We face the difficult fact that the current market environment is a tough one, and the energy industry is working hard to keep the energy flowing. The oil price is close to the real-term record set in 1979. Every geopolitical event causes a spike in the price, but these spikes only happen because the underlying market is itself tight. Strong demand is coming mostly from the developing world, led by China, and it is a lesser known fact that rising demand is also coming from oil and gas producing nations themselves, many of which are using their booming oil revenues to invest in their own economies.

Oil supplies have not already peaked. There are, at the very least, 40 years of proved oil reserves left, at current rates of production, and over 60 years of natural gas. Unfortunately, political and technical obstacles hinder bringing these reserves to market, and become more challenging all the time. For the medium term, the era of cheap energy is behind us.


To the consumer, energy security means access to reliable sources of energy, at an affordable price, produced in an environmentally responsible and safe manner. However, energy security cannot be examined in isolation, as it is linked to other issues, such as economic efficiency, competitiveness and growing concerns about climate change.

Anxieties about energy security arise when high prices alert consumers to the tensions in the energy market. Across the world, geopolitical events, rising investment costs, prolonged project delay and high decline rates of major fields are together creating a drag on worldwide production capacity, particularly in oil.

These trends are global, because the world energy market is interlinked and interdependent. US imports account for 60% of domestic consumption last year, up from 33% only 20 years ago.

World Oil Magazine