Lord David Howell of Guildford
Former Minister of Energy & Writer on Energy Issues
Energy Policy Now – a World of Contradictions
The energy industries of the planet, both upstream, midstream and downstream, are now having to operate in an era of unprecedented uncertainty, fluidity and political turmoil. This is an entirely new context and it has to be understood if business decisions are to make any sense.
There is no global consensus on the future energy mix, despite many assertions that fossil fuels are about to become ‘the wrong side of history’, as was proclaimed loudly at the Paris Climate Conference last autumn. Almost every country is pursuing is own energy and environmental strategies, often in conflict and often cancelling each other out.
And at the same time forces are at work, driven by the power of networks which the digital age has enabled and encouraged, which transcend the power of any government, any trade bloc, such as the old European Union, and any international institution, such as OPEC or OIEC, or the AU, or ASEAN or the OECD or the GCC or the SCO (Shanghai Cooperation Council), or any number of other structures which have grown up in response to the 21st century shift in global economic gravity.
Where does power increasingly now lie? It lies not in the hands of superpowers, or those who spend the most on military hardware and defence. It lies increasingly in the networks which grow as they overlap each other, which devour hierarchies and push on past traditional mindsets and conventional planning in a disruptive flood of innovation, and instant and continuous connectivity on a scale never before seen in history.
Volatility on all sides, but especially in financial markets, in commodity prices, and especially in oil and gas prices, is going to be the chief feature of this more fluidised world.
These trends are ones to which all investors, be they governments or private funds, are going to have to adapt with agility, and this applies with acute relevance in the energy sector at all levels, and in the increasingly complex and extended supply chains which service it and of which it is a part.