U.S. Energy Secretary Sam Bodman said today it will take years to close the gap between increasing world oil consumption and the ability of oil producers to meet demand. "I think we're going to be measuring this in years, not in months," he said in a Washington speech to the National Petroleum Council. Bodman noted that before 2004, world oil demand grew annually at a rate of about 1 million barrels per day (bpd). But last year, it rose by 2.7 million bpd. "Worldwide, the supply of oil is having considerable difficulty keeping pace with growing demand," he said, adding that a large part of the increase in oil demand is due to strong economic growth in nations like China and India. As it becomes more difficult for energy companies to find new oil, Bodman said, heavier crude that contains sulfur and takes more time to process at refineries will have to be used to meet rising oil demand. "If heavier crude continues to take on a larger share of our oil consumption, we will need to make substantial investments in, and modifications to, our refining assets," he said. Bodman also said U.S. natural-gas supplies remain "very tight" and consumers and businesses will face high natural-gas prices for some time. "This is a trend that, as far as I can tell, seems likely to continue," he said.
