In 2003, Mike Stice was the chairman of the National Petroleum Council’s supply committee. They reached a consensus on the status of oil in the United States: The country was out of oil and gas.
“Of course, you can see today, we were so wrong,” Stice said.
Now the dean of the University of Oklahoma’s College of Earth and Energy, Stice says emerging technologies, such as hydraulic fracturing, have created a whole new supply of oil and gas in the United States.
The increase in supply has decreased prices. While that may be good for consumers, it creates financial problems for states and countries that rely on oil and gas revenues to fund government.
Many countries in the Middle East are investing their oil revenue in the future, according to Stice. For example, the United Arab Emirates have invested in tourism, Qatar in technology, and Saudi Arabia in education.
“Everybody has a different way of using the wealth that comes from this resource, but it’s important that it not be squandered. It’s important to recognize it is a finite commodity,” Stice told KGOU’s World Views.
At the same time, some economies have struggled with low oil prices. The state of Oklahoma depends heavily on oil and gas revenue, and Saudi Arabia has been forced to burn its cash subsidies. Stice says Saudi Arabia has created “a burn rate, if you will, that relies on moderate oil prices.”
Stice says many economies have benefited from what he calls “reasonable energy prices.”
“You get the benefits of both enough revenue for the states and other nations but, frankly, enough cost that the industry can maintain a good healthy supply,” Stice said.
"You can also manage the environmental consequences you can manage the economic consequences of too high a price. And so there's a number and it evolves because technology changes that break even price," Stice said.
Mike Stice spent much of his career overseas while working in the oil industry. He was the president of ConocoPhillips Qatar for 27 years, and he held leadership positions in the Middle, southeast Asia, and Australia. Closer to home, he has worked in leadership at Chesapeake.
“You may not want or expect to hear this from an oil person. But the reality is, I'm of the view that we have to pay particular attention to the accumulation of carbon in our atmosphere,” Stice said.
Stice says there’s no question that human activity has increased the amount of carbon in the atmosphere, and the carbon is coming from the burning of fossil fuels.
“No longer is there a debate, at least in the scientific community, as to whether or not the human activity that we've engaged in, namely consuming fossil fuels, is contributing to a large accumulation of carbon in the atmosphere,” Stice said.
The question, to Stice, is whether or not the accumulation of carbon is catastrophic. He believes scientists should now focus on deciding what actions to take.. As an example, he credits the adoption of natural gas for decreasing carbon emissions in the United States.
However, Stice says natural gas can’t simply replace oil and goal to solve the problem.
“I think it's clear that we need to be looking at all kinds of energy sources. Renewables are an important part,” Stice said. “I think it's also clear that there's limits given our current technology and understanding as to how how big a contribution they can make.”
On how Middle Eastern countries use their oil revenues
The Middle Eastern countries in which I worked, in Qatar and Dubai and United Arab Emirates, those countries have benefited greatly and they've taken the resources from that and used it to spur their economies in different directions. Sheikh Mohammad al-Maktoum took it the tourism direction. Qatar is taking it in the technology direction. Saudi Arabia is using their money in a different way altogether in its education commitments to its people. Everybody has a different way of using the wealth that comes from this resource. But it's important that it not be squandered. It's important to recognize it is a finite commodity even though we seem to have plenty of supply today may not always be there.
On climate change and renewable energyMike Stice on Globalizing Unconventional Developments
If you look at the accumulation of carbon from a math standpoint, just replacing oil, coal, with natural gas is not going to solve our problem. We've got to think more broadly than that. So I think it's clear that we need to be looking at all kinds of energy sources. Renewables are an important part. I think it's also clear that there's limits given our current technology and understanding as to how big a contribution they can make. So I think our focus should be in technology is figuring out how to extend the life of fossil fuels. Doing as limited as amount of harm as we can to the environment so that we can maintain our needs for energy but also bring alongside these renewable this which I think can play an increasing role over time.