Commodity Price Volatility Is Prime Concern Among Global Energy Leaders
An April 6–issued report released by the World Energy Council suggests that the single biggest worry among global energy leaders is commodity price volatility.
Prices appear to be a big concern because of the “Grand Energy Transition” toward de-carbonization. Leaders in resource-holding countries, such as Saudi Arabia, are anxious about long-term economic models, if prices decline. On the other side of the coin are consumer nations heavily dependent on imports, such as some countries in Asia and Africa, where higher prices are a concern for their developing economies.
In the middle are countries such as the U.S. and Canada, which are both major producers and consumers of energy. Leaders in these nations have massive amounts of capital tied up in the energy industry and are “held hostage” by commodity prices, according to the report.
The World Energy Council is the United Nations–accredited global energy body, representing the entire energy spectrum, with more than 3,000 member organizations drawn from governments, private and state corporations, academia, nongovernmental organizations, and energy stakeholders. More than 1,200 energy leaders, including ministers and CEOs from more than 90 countries, are said to have participated in the survey used to create report titled “World Energy Issues Monitor 2017: Exploring the New Energy Realities.”
Climate framework, still a critical uncertainty according to the report, was significantly less worrisome to leaders than price volatility. The authors suggest that climate fears have waned following the Paris climate agreement because leaders believe the world is on “an irrevocable path towards decarbonisation.”
Technology advancements in electricity storage and renewable energy are considered keys to the continuing transition. While the report suggests that electric vehicles could become a viable alternative to gasoline- and diesel-fueled cars, adding to demand for electricity, energy efficiency efforts could dampen growth. In the end, the survey “shows the increasing acceptance of lower global economic growth as a reality that needs to be managed.”
Traditional energy sources, such as coal-fired generation, nuclear power, and hydro, all “fail to excite energy leaders,” the report says. Coal usage is seen falling in future decades, and although zero-carbon energy sources, public concerns about nuclear power’s safety and hydropower’s environmental impacts are seen hindering the growth of both.
—Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)