Diversifying energy supply for a more secure future


Courtesy of Energy Institute (EI)

Chris Finlayson, Chief Executive Officer, BG Group, was the Guest of Honour and speaker at this year’s IP Week Dinner. He looked back at the last 100 years of the energy industry and at the growing importance of gas and LNG during this time.

‘I’m honoured to be invited to speak at this illustrious occasion. IP Week is a tremendous opportunity for us all to get together to discuss the issues facing our industry. This year is special as it’s the centenary of the inaugural meeting of the Institution of Petroleum Technologists – the forerunner of the Energy Institute.

So, before I give you my thoughts about the future of the energy industry, I’d like to reflect for a moment on the very different world of our predecessors a century ago. Little did they know as they gathered in London in 1914 what lay in store, not just for our industry but for society as a whole. Western civilisation was, of course, teetering on the brink of the First World War. However, many of the key themes that were discussed at the Institution back then, still sound familiar today.

High on the list of talking points was the rapid rise and abundance of natural gas in the US. They also discussed the huge potential of gas reserves that had been discovered in Queensland and other parts of Australia. But history doesn’t always repeat itself – if anyone had suggested the possibility of commercial oil production in Brazil in 3,000 metres of water and below 1,000 metres of salt, I suspect they may have been locked up!

In a paper presented to the Institution in 1915, Dr Leo Henderson extolled the benefits of natural gas for households as being of great value to the economic life of a nation. In the discussion that ensued, the President recalled how in Pittsburgh the burning of bituminous coal hadmade it “customary, and in fact necessary,” to keep a special suit of clothes to wear in that city. Switching from coal to gas had made Pittsburgh’s atmosphere beautifully clear, as he put it. Not so different to the situation in Beijing 100 years later.

Diversity of energy supply was not just a topic for members of the Institution to debate. It was also a political issue at the highest level with huge implications for national security. Winston Churchill had just taken the controversial decision to convert the British Navy from Welsh coal to imported oil. A risky choice, on the face of it, for a nation that had no oil and huge reserves of coal.

100 years of achievements

When I watched the London Olympics opening ceremony, I was struck by the absence of recognition for the oil and gas industry amongst the celebration of the industrial revolution. We should be immensely proud of the UK’s role in its evolution. Two of the “seven sisters” – BP and Shell – are listed here today, with roots going back over 100 years and partly driven by that decision of Churchill.

Looking back over the period from 1914 to 2014, history has witnessed a wealth of noteworthy achievements in our industry. It was 100 years ago in 1914, that the first wells were drilled in Britain in search of domestic oil supplies to meet the growing demand for energy. Although Britain’s first commercial oil discovery was not made until 1919, this example shows how a pressing demand for energy prompts a hunger to search for untapped discoveries.

Britain turned to the US in 1942 when the country had just two months stock of oil remaining. American rigs were imported secretly along with US drilling crews who focused on oil fields in Nottinghamshire. The crews kept their secret by sparking a rumour that they were making a Western starring John Wayne.

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