Demand for oil will continue to climb as nations like China and India grow in the coming decade, and according to a top oil executive on campus Tuesday as part of International Education Week, companies must make additional investments in petroleum production to meet that crucial need.
R. Casey Olson, executive vice president of Occidental Petroleum Corporation, spoke Tuesday in the LaRose Digital Theatre. His afternoon talk on the past, present and future of oil production and energy use dabbled in history, economics and geopolitical issues of today.
“To really understand something, you oftentimes have to go back to the beginning and think about how it all started,” Olson said before discussing the origins of oil production in the United States, the rise of Standard Oil and the nature of oil ownership.
Oil, he said, belongs to the owner of the land over which the oil sits. Companies sign lease agreements with land owners and typically provide a percentage of revenue from the petroleum pulled from the ground.
Over the years, the ownership of the largest oil companies has belonged to governments. Olson said that foreign governments now own 15 of the world’s 20 largest oil companies. A majority of those governments are in the Middle East. And with energy consumption expected to climb 44 percent worldwide between today and 2030, the security of the region is imperative, he said.
Such a demand will continue to keep petroleum a highly valued commodity, Olson said. “Renewable energy sources,” he said, “simply are not economically feasible to compete with fossil fuels on a large scale basis.”
The talk also examined recent price swings at the gas pump. Oil is traded like a financial asset, Olson said, and speculators helped push prices to record highs in mid 2008 before the recession brought costs back down by early 2009.
“It’s traded just like other paper assets around the world,” he said. “When you have that kind of trading going on, you can have volatility.”
Olson previously held the position of president, Oxy Oil and Gas – International with responsibility for the management of all Oxy international oil and gas operations and international business development efforts.
Occidental Petroleum Corporation is the fourth largest U.S. oil & gas company, based on market equity capitalization, with operations in the United States, Middle East/North Africa and Latin America. In the United Arab Emirates, Olson is a member of the board of directors of Dolphin Energy Limited. He also serves as vice chairman of the U.S./United Arab Emirates Business Council.
The Isabella Cannon Centre for International Studies and the Martha and Spencer Love School of Business co-hosted the talk.