Last Friday, we discussed what happens when one adopts a my-way-or-the-highway approach to energy development, in this case opposition to Canadian oil sands. You get what we already have, which is projections of $150-a-barrel oil and $4.50-a-gallon gasoline, the product of a belief that, starting next year or soon thereafter, oil demand will start to exceed supply. This state of affairs vexes Christophe de Margerie, the CEO of France's Total oil company, who met with a small group over breakfast this morning at the Center for Strategic and International Studies. "If you say no to shale oil, no to heavy oil, no to Iran -- no, no, no, no -- what about life?" de Margerie said. Oil companies must be responsible in how they work, but everyone else must grasp that they actually need oil, and will for many decades to come, he said.
De Margerie is refreshing on two fronts -- his wicked sense of humor (Note to oil CEOs: it is possible to be funny and successful) and among the clearest minds on the oil patch. When we last visited with de Margerie, he was on a similar bent -- he was saying that the world is fast approaching the maximum volume of oil it can possibly produce, which he reckons is about 95 million barrels a day; that's just 8 percentage points higher than the 88 million barrels a day the world consumes at the moment. Today, he dove deeply into the wrong-headedness of attempting, at least at the moment, to weed out large energy supplies that one will and will not accept. When it comes to oil, we need all of it.
We still want to drive our cars at will, and own all the plastic gadgets in our homes. We want to fly off to Costa Rica and Bangkok. Not incidentally, we would like our helicopter-borne armies not to worry if they wish on the spur of the moment to capture Osama bin Ladin. That is the stuff that's at risk.
So among other things, the United States would be shrewd to accept the added 500,000 barrels a day to be produced from oil sands in the Canadian province of Alberta, which has been under long scrutiny because of the pollution produced when it is mined and refined. At the same time, Chesapeake Energy CEO Aubrey McClendon might stop congratulating himself for a billion-dollar venture-capital subsidiary aimed at creating demand for surplus shale gas, and instead act aggressively to become super-transparent and police the bad actors who are driving doubts about his industry.
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.