Syed Rashid Husain SOME five years back, on July 18, 2007 to be exact, the US National Petroleum Council (NPC), an advisory group to the secretary of energy, presented its “Global Oil and Gas Study: The Hard Truths,” to the then secretary Bodman. This was to be a comprehensive view to 2030 of global oil and natural gas. The report highlighted two important issues confronting the energy world. The council argued that driven by increasing population and the pursuit of improving living standards, the total global demand for energy was projected to grow by 50-60 percent by 2030. And then at the same time, it also highlighted the accumulating risks to the supply of reliable, affordable energy to meet this growth, including political hurdles, infrastructure requirements, and availability of a trained workforce. In real sense, not much time has elapsed since the report was presented. Yet the energy world today represents a completely altered environment. A complete metamorphosis, in the meantime, has enveloped the energy world. Consumption today seems to be stabilizing. The galloping demand has in the meantime, been reined in. Increasing efficiency of combustion engines, the depressing state of economy in the Western world and the slowing of growth in China are all pointing to a completely altered picture today. In simple terms, the global demand is not galloping – as was forecasted – or projected – in the Hard Truths. And supplies are not tight too. The very concept of ‘Peak Oil' has been put to the dustbin of history – at least for the time being. Conventional and unconventional sources have changed the supply scenario altogether. In reality, the energy world today is not as hard pressed as was projected in the ‘Hard Truths' – only five years back. Interestingly, in 2006, Secretary Bodman appointed Adam Sieminski to the National Petroleum Council (NPC), where he helped author the NPC's above mentioned ‘Global Oil and Gas Study: The Hard Truths.' Things have in the meantime, changed on EIA front too. Change of guards has taken place. Guy Caruso stands retired and on June 4, 2012, just five years after presenting the ‘Hard Truths' to Secretary Bodman, Sieminski was sworn in as the eighth administrator of the U.S. Energy Information Administration (EIA). And he was here in Riyadh last week presenting, “EIA's Annual Energy Outlook 2013 and the future of US domestic oil and gas production,” unveiled only about a month ago - in December 2012, before a packed audience at the IEFS headquarters. And the outlook points out, in very explicit terms, the energy world stands truly revolutionized today. Growth in energy production is now outstripping consumption growth as crude production is set to rise sharply over the next decade. And by 2040, the US should also be producing an additional 8 million bpd – courtesy the tight oil. Yet despite the rising US domestic production, the EIA stresses that the country would continue to import a part of its requirements by 2040. However, one major change is evident. Washington would no more be dependent on Middle East for its crude requirements. Canada would be meeting most of the remaining crude needs of the big brother next door then. North America, as a continent will be self sufficient – as far as crude was concerned. And in gas terms, US would already be a net exporter by 2020. On the issue of crude price trajectory to 2040, the EIA points to uncertainty. However, the EIA administrator, graduating into public service from the private sector, was - thankfully - blunt in conceding that a market price of $140/150 a barrel was still affordable. Economies can sustain it – he admitted without mincing words. And according to the EIA projection, the OPEC share into the global liquids market is to creep up slightly to 44 percent – from 40 percent in 2011. Indeed the growing emphasis on efficiency is contributing to the emerging trend. Energy used to generate a dollar of GDP has been going down for some time now. And it continues. Stringent fuel economy is changing consumption patterns. New light duty vehicle fuel economy is to touch 50 miles per gallon by 2040, Sieminski emphasized. And this in itself means a major leap toward reducing the US crude consumption. And then, despite issues with pollution, the role of coal in the electricity generation seems sustaining, not only in China and the developing world, but in the US too. Though the electricity mix shifts somewhat toward natural gas (courtesy production from shale), coal would continue to stay the largest source of electricity in the US, the EIA Administrator conceded. However, Sieminski was also quick to point out an interestingly inverse relationship between coal consumption and the charge levied on carbon. The greater the charge, greater appears the will to generate power from nuclear source – despite the Fukushima debacle. And while the US has often been criticized for opting out of the Kyoto protocol and failing to take a lead on the issue, yet the EIA Administrator laid out that the US carbon emission is estimated to be 5.69 billion MT in 2040, less than 6 billion MT in 2005. How far all these forecasts are to be taken seriously? No one has the Crystal Ball to look into the future of the energy world. At best these are guestimates. Energy forecasting could be professionally hazardous too, one can't argue. Many instances could be cited. Even the NPC report presented in 2007 to Secretary Bodman, when seen in the light of the reality, turns out to be significantly different. And hence one kept wondering during the presentation, how seriously the 2013 report should be taken? And before one could ask this question straight, Sieminski himself conceded; ‘at best all such compilations are projections into future.' And indeed projections could turn wrong too, one can't contest! And then during the QA session, post-presentation, interesting issues came up for discussion. The future of the Strategic Petroleum Reserves (SPR), created in the aftermath of the 1973 OPEC oil embargo, needs the attention of the policy makers in Washington. And the EIA administrator appeared in agreement, stressing that the growing domestic production in the US has, to a very great extent, altered the need of the SPR. How to put this to use, remains a question. And when asked to comment on the recent Saudi output cut and on the divisive issue of the Keystone XL pipeline, Sieminski was cautious, ensuring not to generate any controversy. After all he has a family to feed too – and – no one likes to be fired, one has to understand. And Sieminski is no exception!