2007 Global Energy Survey

At the Cross Roads

At the Cross Roads: Major shifts in prices, geopolitical conditions
and environmental concerns propel the industry into new territory.

The energy industry faces a challenging future. Over the last 35 years numerous factors have grown more urgent, and those issues now require energy executives to adjust their strategies. The rise of the Far Eastern economies,  continued political crises in oil rich regions, the increasing Interconnectedness of the global markets as well as a strengthened social awareness of environmental issues are converging to create a fundamentally different industry landscape. Rising to the challenge will require the use of innovative and unprecedented strategies and solutions. Global primary energy demand is expected to increase by at least 50 percent between now and 2030, an average annual rate of 1.6 percent, according to the International Energy Agency (IEA). The IEA suggests that more than 70 percent of that demand increase will come from developing
countries; China along will account for 30 percent of the increase. Meanwhile, China’s share of world oil demand alone is expected to jump from 7.6 percent in 2004 to almost 11 percent in 2020, according to The Economist. India’s share has also increased last year. Global oil consumption
increased at 3.4 percent, more than the typical annual growth rate of 1-2 percent. Most surveyed executives link escalating demand to the East Asian economic boom (in China, India and Pakistan). Respondents predict an increase in demand for all energy types, including a renewed focus on nuclear energy. Most survey respondents believe that booming demand will further strengthen calls for emission controls from consumers and governments. The stage where industry executives will face environmental challenges while simultaneously addressing the increased demand pressures has been labelled by a number of our respondents as a
period of “Sustainable Creativity” (Figure 1). This period will test the industry’s inventiveness, its ability to reach out across regional and competitive lines and its ability to shape economic and social dialogue. previous | next