With prices skyrocketing and supply fears growing, energy ministers from the world’s major producing nations and multinational oil company heads face unprecedented challenges at this year’s World Petroleum Congress.
It wasn’t always that way. Markets have been relatively steady most years since the congress first started meeting 19 years ago, allowing the thousands of delegates it draws annually to focus much of their attention on topics geared to catch the attention of energy insiders.
There is some of that too this year.
When the meeting opened yesterday, world interest was focused on what the more than 20 energy ministers from OPEC and elsewhere would have to say about how to quench raging market volatility, as well as on an oil market report forecast to be released by the International Energy Agency today.
But as alarm has grown that world economies may no longer be able to compensate for raging oil prices, this year’s congress slogan says it all: “A World in Transition: Delivering Energy for Sustainable Growth.”
The equation is simple, reflected by the knee-jerk of plummeting stock markets every time crude sets a new record.
Oil prices cannot rise indefinitely without world economies suffering, and with them just about everyone using oil, gas or their derivatives — whether it is to light a simple cooking fire somewhere in Africa, fill up at the pump in the US or heat a 20-room mansion in Europe.
Environmental concerns that clash with the world’s seeming readiness to pay for oil and gas at just about any price complicate the mix. Producers and refiners in the Spanish capital will be struggling to find answers not only on how to ensure stable supply, but also on doing it in a way that leaves a relatively small carbon footprint.
Organizers are seeking to reflect environmental awareness. They say that for the first time that the meeting will offset its carbon emissions by neutralizing its greenhouse gas emissions through purchase of carbon credits that will be invested in a Guatemalan hydroelectric carbon plant.
Still, statements from participants and organizers reflect the obvious: Primary concern is over availability and prices.
“Increasing population growth, energy intensity and globalization has led to a phenomenal rise in the use of energy,” World Petroleum Council president Randy Gossen said before the opening session.
“The challenge for our industry is to ensure continuous, affordable and reliable energy supply in a sustainable, transparent, ethical and environmentally sound manner,” Gossen said.
And Jorge Segrelles, chair of the meeting’s organizing committee, said: “The conference theme appropriately reflects what is happening in world markets.”
He added: “The industry must deliver and in a sustainable way.”
But can it, against what seems to be all odds?
There is the weakening US dollar; each time it falls, traders buy oil as a hedge, and the greenback appears set to fall further with Europe possibly moving toward interest rate increases even as low US rates stand firm — trends that will see more investors abandon the US currency.
Also see: Oil nears US$142 in Asia
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