Rice University’s Baker Institute for Public Policy hosted the annual statistcal review of world energy, presented by British Petroleum. Mark Finley, BP’s general manager for global energy markets, presented the study’s findings. He says despite financial market turmoil that began in August, world economic growth was strong last year.
“Where energy markets are given the opportunity to work, we see producers and consumers responding to that. Where we see through policy and government actions that interfere with market mechanisms, are the places where we see these kind of discontinuities emerging. We see impediments to the market’s ability to respond through either subsidies that shield consumers from demand, or through production policies that interfere with the natural response of supply to higher prices.”
Rice Professor Amy Myers Jaffee is Director of the Baker Institute Energy Forum. She found several points from the review interesting, like pressure on countries that subsidize fuel prices and production numbers from countries like Russia.
“Starting with the turn of the century, we’d seen big growth in oil production in Russia, and the fact that that has reversed itself last year, gives cause to worry that if that production is not made up for in increases in the Middle East or other places, and the Russians don’t turn around those factors that have caused production to fall there, that we could actually see tighter markets in the future, and the price of oil be under more pressure to go higher, not less.”
Dale Dorn from San Antonio is in the natural gas exploration business. He found the information useful.
“It’s all been alternatives. It’s all part of the mix, and we need them all. We need more gas, more oil, more alternatives, more nuclear in a big way, and that’s what price is sort of telling us.”
The study concludes opportunities exist for more supply and a better balance in the energy market. The challenge is having the right investment mechanisms & policies in place to achieve that better balance.
Juan Castillo, a Milby High School junior, is interning at Rice. He’s trying to make sense of all the information.
“Experience on the current events, dealing with gas around the world, and with this information I got today, who knows, I might help it in the future.”
Pat Hernandez, KUHF, Houston Public Radio News.