| No Impending Energy Crisis, say Energy Chiefs at World Economic Forum Annual Meeting 2006
| There is no reason for pessimism over securing future energy needs as high oil prices and the rise of India and China push search for alternative supplies
27 January 2006 - Davos, Switzerland
Leading energy chiefs have assured that there are adequate world energy supplies, and that the market and governing energy institutions are able to absorb energy shocks. “There is no reason for pessimism,” declared Jeroen van der Veer, Chief Executive of Royal Dutch Shell, today at a press conference devoted to energy security, during the World Economic Forum Annual Meeting taking place in Davos. “Easy oil may have peaked,” he said, but high oil prices are providing the public and private sectors with the incentive to invest in discovering alternative sources of energy which are in plentiful supply. A further step will be to find ways to cut the CO2 footprint, added van der Veer.
Diversification will alleviate pressures on world supplies, agreed Fatih Birol, Chief Economist and Head of the Economic Analysis Division at the International Energy Agency. Governments and companies will have to diversify away from oil and gas, as well as away from traditional suppliers to find new markets.
“We have the mechanisms, machinery and institutions that can respond” to oil shocks, said Daniel Yergin, Chairman of Cambridge Energy Research Associates, USA. He does not foresee an oil shock unless there is a “massive recession”.
Hurricanes Katrina and Rita demonstrated how initial panic over interrupted energy supplies proved unfounded and “the situation was quickly normal again,” commented Yergin. “The system reacted well,” he said.
“The oil infrastructure is robust enough to deal with a 5% cut in supply,” said Birol, but he stated that market uncertainty is destabilizing.
Mohammed Barkindo, Acting Secretary-General of OPEC, said that his organization “remains ready to step into the market”. He pointed to the fact that the Vienna-based institution made its reserves available in the wake of Hurricane Katrina. “This shows that OPEC will step in at any time there is a shortage in the market because one of the key issues is market stability,” he said.
The experts agreed that the disclosure of reserves needs improvement and called for guidelines to be updated. “We need a universally accepted definition of reserves reporting,” said Birol.
OPEC does not believe nuclear energy to be a viable alternative option, while Birol stated that “climate change and energy security will see Europe and the US look at nuclear much more closely.”
Notes to Editors:
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