Global oil industry and the environment

Petronas of Malaysia was host to the Fifth Asian Oil and Gas Conference. This conference, which was opened by Malaysia?s Prime Minister Dr Mahathir bin Mohamad, attracted a total of over 700 participants including the chairmen of Shell, UNOCAL, and several other companies. The global representation of organizations at this conference was a clear indicator of the interest in Asia and the hydrocarbon development taking place in the region. The global oil industry is going through a critical period of change with oil prices having increased over the past 15 months, even though they have come down from the recently high of around US $30. Oil companies are generally in good financial health. At the same time, the Asian economy which went through a difficult time since 1996/97 have, with the exception of Indonesia, rebounded strongly, and are confident of healthy growth in the future. This has led to a major increase in demand for oil, with the share of Asia going up prominently. Several speakers at the conference made repeated references to the importance of Asia and particularly China and India in determining the future course of the global oil market. One fuel that received a great deal of attention is natural gas and the prospects of rapid growth of trade in both liquefied and piped natural gas in the Asian region. This is as much a function of environmental concerns as the emergence of new discoveries of gas on the Asian continent and the need to ensure energy security among importing countries. The final session of the conference in which I spoke focused on structural changes taking place in the global oil market, and the likely impacts on the environment. Given the fact that the Framework Convention on Climate Change would have important implications for the use of specific fuels and that local environmental impacts would bring about major environmental changes in activities such as transportation, companies are likely to be influenced to a great extent by environmental concerns and problems in the future. This would dictate their plans in the direction of making them energy companies with a preference for cleaner fuels such as natural gas and ultimately renewable energy technologies. Overall the Fifth Asian Oil and Gas Conference was a successful event that would undoubtedly be repeated with similar success in subsequent years.