Energy Strategy, Technology, and Current Issues in the Oil Industry
Energy Overview / Current Issues in Energy

Susan Smith Nash, Ph.D.


Issue:
Global outlook: Sustained, worldwide growth.


Worldwide growth in the economy, coupled with population growth requires conservation, new technologies, and diversified, multi-pronged solutions.
 
The view is complicated, however, by the fact that there are regional slowdowns as well as debt crises in certain countries. For example, countries in Europe with high levels of debt (Ireland, Greece, Portugal, Italy, Spain) along with banking crises (Cyprus, Iceland), have experienced severe downturns, resulting in lower levels of GNP and also higher unemployment.

The impact of high-growth transforming economies (India and China) on global economic outlook and energy has been not quite as straightforward as one might think. While the Chinese economy was booming, there were the following initial impacts:
   
•    Increased demand for imported oil, meaning competition for oil produced in the Middle East, South America, Asia-Pacific
•    Increased investment in infrastructure and energy sources, which include coal fired plants and also drilling / production / pipeline construction
•    Increased investment in stakes in overseas oil and gas producers in order to “fast track” acquisition of technology
•    Increased levels of air pollution in Beijing

During 2013, China’s economy experienced a slowing of growth, along with a surge in bad local debt has caused concern among planners and economists in China. They have announced that they will attempt a plan to avoid a possible repeat of the late 90s crisis in Asia that essentially stopped the Asia Tigers in their tracks, and the crisis in Japan that resulted in the “lost decades.”

The level and extent of the debt crisis is not well known, but details are emerging, along with projections of possible impact. In addition, scenarios for dealing with the debt crisis are also being developed. They are complicated by the fact that consumer spending (and borrowing) has been a transformative factor in Chinese culture in the last 10 – 15 years, and a major downturn or recession could have politically destabilizing effects.
 
 
Readings:
 
Taking Europe’s Pulse
http://www.economist.com/blogs/graphicdetail/2013/05/european-economy-guide

Europe’s Economic Crisis
http://www.globalresearch.ca/europes-economic-crisis-unemployment-hits-record-highs-in-spain-france/5333053

Spring Forecast 2013
http://ec.europa.eu/economy_finance/eu/forecasts/2013_spring_forecast_en.htm

Risk of Stagnation: India and China Need to Improve their Economic Institutions
http://articles.economictimes.indiatimes.com/2013-04-29/news/38904429_1_imf-latest-regional-economic-outlook-trend-growth

The Euro Debt Crisis and its Economic Impact on the World
http://www.dummies.com/how-to/content/the-euro-debt-crisis-and-its-impact-on-the-world.html

Oil and Gas Financial Journal. 2013. Unconventional Resources.  http://www.ogfj.com/unconventional.html
 
U.S. Energy Information Administration. Short Term Energy Outlook. January 2013. http://www.eia.gov/forecasts/steo/report/renew_co2.cfm -- full report: http://www.eia.gov/forecasts/steo/pdf/steo_full.pdf
 
ExxonMobil. 2013. The Outlook on Energy to 2040. http://www.exxonmobil.com/Corporate/files/news_pub_eo.pdf
http://www.exxonmobil.com/corporate/files/news_pub_eo2013.pdf
 
The Shale Revolution’s Shifting Geopolitics. NYTimes. Dec. 26,  2012. http://www.nytimes.com/2012/12/26/opinion/global/the-shale-revolutions-shifting-geopolitics.html?_r=0
 
Report Underlines Bleak Outlook for Wind in 2013. Wind Power Monthly.  29 August 2012. http://www.windpowermonthly.com/news/1147539/Report-underlines-bleak-outlook-wind-2013/
 
IBM – Technology http://www-935.ibm.com/services/us/gbs/bus/pdf/g510-3882-meeting-challenges-oil-gas-exploration.pdf
 
 
Guiding Questions:
 
Where are major areas of uncertainty in the energy sector?
 
How is technology a key driver in energy?

What are some of the predictions for the Chinese economy? What are some of the potential impacts?
 
What are key energy factors to keep in mind when making strategic decisions for the following companies / industries over the next 5 years?
 
•    transportation industry
•    infrastructure
•    travel and hospitality industry
•    manufacturing
•    internet communications
•    services
•    logistics
•    national security / military