Today we confront one of the toughest challenges in our industry's history: planning for the world's long-term energy needs in the midst of the most serious global economic recession in decades. In the past, major economic downturns led almost invariably to a period of underinvestment in both energy-industry assets and people. The result? Another period of tight supply. Let me make the case for continued investment.

Reliable, affordable and abundant energy helped drive the prosperous periods in the past, and it's essential for a healthy global economy and social climate in the future. Our industry must continue to invest in assets and people, especially in crude oil and natural gas. Despite the near-term problems, long-term growth prospects are robust, with total energy demand projected to grow by 40% by 2030. Energy demand in OECD countries is expected to increase by a modest 12% by 2030, whereas demand in non-OECD countries is expected to increase by 76%.

Expanding and diversifying future oil and gas supplies will require significant investments. To ensure sufficient energy supplies, the International Energy Agency has projected investments of $400bn-$500bn a year between 2007 and 2030. Although in recent months oil demand has slumped and is expected to decline further in 2009, there are risks to adequate reliable, affordable supply in the long term. The 2007 National Petroleum Council study projected an additional 30m barrels a day (b/d) to 45m b/d of new capacity by 2015, and 70m-100m b/d by 2030 because of a natural production declines and expected demand growth.

Even if demand were to remain flat to 2015, we will need about 30m b/d of additional capacity to make up for declines. In 2008, half of the top-15 oil producing countries experienced production declines, and many doubt that sufficient new capacity will be in place to meet the demand required by 2015.

Meanwhile, the near-term natural gas markets are expected to face periods of oversupply due to weakened demand and sufficient liquefied natural gas (LNG) supply to 2012. But longer-term natural gas demand is expected to increase by more than 50% by 2030, with growth driven by the power sector. And more than three-quarters of that demand growth will come from developing countries.

LNG is projected to account for 80% of the increase in inter-regional gas trade by 2030, requiring LNG infrastructure capacity expansion. At times, there could be risk that gas demand may test the upper bounds of capacity due to temporary shortfalls in infrastructure - upstream facilities, LNG supply chain, and long-distance pipelines - and upstream development.

The downstream sector is better situated, with little capacity risk for the next five years. Currently announced refining projects are expected to add about 12.5m b/d of crude distillation capacity by 2015, although some of these projects may be deferred. Growth in oil demand will continue to be dominated by transportation fuels. Over the long-term, average yearly demand growth for road diesel and gasoline are projected at roughly 0.7m b/d. Capacity should be adequate in the medium term.

We are in a long-term business, so investments must focus on the long term. The best enabler for adequate investment is a stable investment environment. The long-term capacity challenge is not about resources. We know the resources are there. Rather, investment today depends on:

• Financial system stability;
• Access to resources;
• Commitment to invest in assets and skilled people;
• Development and application of innovative technologies;
• Confidence that the fiscal climate will be stable for the duration of decades-long projects.

Our success as reliable suppliers of energy for economic growth and human progress will be determined on how well we stay focused on the long term - and on our shared commitment to continue investing in people and assets through the commodity cycle.