WORLD: Shell Predicts Two Decades of Rising Energy Prices

Publisher Name: 
The Independent

Worldwide energy
prices are set to rise over the next two decades as individual
countries become more concerned about ensuring security of supply and
governments take a more pro-active role in dictating energy policy and
regulating markets, according to the latest global outlook from the oil
giant Shell.

Its "global scenarios" report, the first to be produced since the
twin shocks of the terror attacks of 11 September 2001 and the Enron
scandal, also suggests that Shell in common with other oil majors will
place more emphasis on developing renewable energy sources such as wind
and solar than extracting more hydrocarbons through unconventional
means.

The report outlines three potential scenarios up to 2025. Under the
first, "low trust globalisation", world economic growth is assumed to
be 3.1 per cent and as the process of globalisation continues, it is
fettered by a much stronger regulatory role for governments and
stricter curbs on cross-border movement of people, goods and knowledge.
The second, "open doors", envisages stronger growth of 3.8 per cent as
the markets provide solutions to the twin crises of security and trust
sparked by events such as 9/11 and Enron and the only restraint on
exploiting new energy sources is the investment available.

The third, "flags", depicts a world in which nation states retreat
into their shells and conflicts put a brake on globalisation, resulting
in annual growth of just 2.6 per cent.

Albert Bressand, the vice-president of global business environment
at Shell and the report's main author, said that under each of the
scenarios security of supply assumed greater importance, "potentially
leading to far more politicised energy relations and creating new
sources of tensions among countries".

The "flags" scenario may increase development of expensive forms of
renewable energy, such as wind, as states sought to ensureindigenous
supplies, the "open doors" scenario was likely to produce the biggest
rise in the cost as growing demand drove up prices.

AMP Section Name:Energy