BP's chief executive says that the industry and government must work more closely to satisfy the world's future energy demands. Tony Hayward of the London-based oil giant says industry and government must balance the need for finding and producing more fossil fuels with a plan to reduce carbon emissions. His remarks came in an address before the Cambridge Energy Research Associates conference in Houston. Hayward suggested creating policies in the United States and abroad to encourage needed investment in fueling the world's transportation, as well as heating and cooling its homes and powering its factories.
"Energy companies and governments must have confidence in each other if we are to invest the $26 trillion needed to meet expected growth in energy demand over the next 20 years. Fiscal and regulatory policies must be stable and enduring so industry can invest with confidence. And we must make the right policy choices first time, because inappropriate and ineffective regulation can discourage investment."
Hayward says it's critical to look beyond the current economic downturn and prepare for the enormous growth ahead. He notes that the International Energy Agency has projected the world will need 40 per cent more energy in 2030 than it consumes today.
The government says wholesalers cut back on their inventories in December by the largest amount in 16 years, as companies slashed stockpiles amid the deepening recession. The reduction means wholesalers ordered fewer new goods, leading to reduced production and potentially more job layoffs. The Commerce Department says wholesale inventories fell 1.4 per cent, nearly double analysts' expectations of 0.8 per cent. It also was the fourth straight monthly decline. Sales at the wholesale level dropped 3.6 per cent, slightly steeper than analysts' expectations, but less than November's record 7.3 per cent drop.
Treasury Secretary Timothy Geithner says the new administration will wage an aggressive two-front battle against the worst financial crisis in seven decades, while the Federal Reserve expands a key lending program to up to $1 trillion. The efforts are part of the government's major overhaul of the widely criticized financial rescue program. The Fed says it will expand the size of a key lending program to as much as $1 trillion from $200 billion. The program, which has yet to begin operations, is designed to boost resources for consumer credit and small business loans. The Fed says the program also is being expanded to cover the troubled commercial real estate market and certain residential mortgages.
Federal Reserve Chairman Ben Bernanke says a flurry of radical programs aimed at busting through debilitating credit clogs are showing promise and pledges to keep Americans better informed about efforts to battle the worst financial crisis since the 1930s. While acknowledging that measuring the impact of the Fed's programs is complicated because many factors affect market conditions, Bernanke tells the House Financial Services Committee that the central bank was encouraged by feedback from Wall Street and others. The Fed chief appeared just hours after Treasury Secretary Timothy Geithner unveiled a multi-pronged attack to get credit flowing freely again and to restore stability to financial markets by using the second, $350 billion installment of the $700 billion bailout fund.
Governors and state legislators are closely watching the path of the economic stimulus package as they scrape together budgets. Several governors are holding up budgets over the uncertainty about how much money they can expect from the $800-billion plus package. Others have proposed budgets based on what they expect to receive. Governor Rick Perry says Texas isn't looking for a bailout, but if taxpayer money is distributed, Texas should get its fair share. House democratic Leader Jim Dunham of Waco says legislators may decide whether to accept stimulus money, even if the governor fights it.
"Hopefully the stimulus bill will have a provision, as it currently has, that gives more than one option to request the funds. That way, if the governor doesn't want to do it, the legislature can decide whether or not to do it."
At least 40 states are running deficits this year.