May 02, 2017 - 5:15pm

World Oil Demand Needs More than U.S. Shale


Senior Editor, Digital Content

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John Watson, chairman and CEO of Chevron.
John Watson, chairman and CEO of Chevron.

The U.S. fracking boom can only do so much to meet world oil demand, says Chevron’s CEO.

“Shale can help. Certainly between now and the end of the decade it will be a big contributor to meeting that million-barrels-of-oil-demand growth that's out there,” John Watson told CNBC. “But ultimately oil fields decline, and we're going to need all sources of supply, including the shales, but also deepwater and other sources around the world.”

EIA chart: U.S. Shale oil production: 2010-2040.
EIA chart: U.S. Shale oil production: 2010-2040.


President Donald Trump is cognizant of this fact and has made unleashing American energy an important part of the first few months of his administration.

As Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, noted, “Of all executive actions as well as bills to repeal Obama’s midnight regulations, 20% have been focused on energy.”

Last week, President Trump ordered a review of offshore energy development. In the future, we could see safe energy development in the Mid-Atlantic, the Eastern Gulf of Mexico, and the Arctic.

Regulatory Reform

On the regulatory front, the Trump administration earned a good grade from Watson. “Arguably it’s been one of the most significant things the Trump administration has done so far,” he declared. “There have been regulations and guidance documents that have been rescinded by the Trump administration that were just heaping costs on our industry with no discernible benefit.”

 

Locking in those gains is critical. “We have routine regulations in the country—we want those,” Watson explained. “But it’s the overreach without cost-benefit analysis without an understanding of what the real implications are that have hurt this economy.”

The first major move to modernizing the federal regulatory process in decades, the Regulatory Accountability Act, would achieve much of what Watson wants. It would focus federal agencies’ efforts on the most expensive rules and require more analysis, transparency, and public input.

Reining in the Regulatory State will pay off. “The speed of business is slowed by excessive regulation,” Watson said. “Rolling back the unnecessary regulations can kick start the economy in a big way.”

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About the Author

About the Author

Sean Hackbarth standing in front of oil pumps near Baker, Montana.
Senior Editor, Digital Content

Sean has written for various Chamber properties since 2012. In 1999, Sean launched a “weblog” and never looked back, becoming a self-proclaimed pioneer of the medium.