Energy markets prove buoyant
27-12-2009
Tamsin Carlisle UAE
A new solar energy project near Seville. Though the year started off rough for alternative energy projects, they later gained political traction. Marcelo del Pozo / Reuters
For an industry tossed about by unprecedented oil price volatility, changing energy consumption patterns and a worldwide drop in fuel demand, the once unassailable energy sector demonstrated remarkable resilience this past year.
What they said
If others do not begin to invest similarly in new capacity expansion projects, we could see within two to three years another price spike similar to, or worse than, what we witnessed in 2008
Khalid al Falih the Saudi Aramco chief executive
The momentum behind alternatives to oil continues unabated, which clouds the future prospects of oil demand. Compounding this clouded outlook are calls to lessen or end dependence on oil
Ali al Naimi the Saudi oil minister
You can take all conventional resources and you’ll have nine times more unconventional resource that’s technically recoverable
Stephen Holditch the head of petroleum engineering at Texas A&M University.
We’re entitled to it
T Boone Pickens, the US financier, on whether US companies should get a cut of Iraq’s oil.
For us in Iraq, it shows the government is fully free from outside influence. Neither Russia nor America could put pressure on anyone in Iraq
Ali al Dabbabh, a government spokesman, on Iraq’s auctions of oil licences
We’re reducing our dependence on foreign oil in the Middle East
Barack Obama the US president
The price is perfect.
Ali al Naimi, the Saudi oil minister, commenting on crude prices hovering around US$75 per barrel
Although asset market prices have rebounded and economic growth has resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be
An OPEC communique explaining the group’s decision this month to leave production quotas unchanged
Price levels we see today between $70 and $80 [a barrel] is a good price level for almost all investment, but if the prices would go higher than this, it would be risky for the global economic recovery
Fatih Birol the chief economist of the International Energy Agency
At the start of the year, oil and gas producers were grappling with the most difficult conditions their industry had faced in at least a decade. The price of crude had tumbled more than 70 per cent from its record of more than US$147 per barrel in July last year, constricting cash flow and erasing profits from high-cost oil extraction ventures such as oil sands.
Global oil demand had been falling for nearly a year as the world economy slid into a deep recession. US natural gas prices followed a similar path as a surge of new production preceded a sharp contraction in industrial demand. Many banks stopped lending, making project financing a nightmare for energy developers. Worldwide gluts of oil refining, petrochemicals and gas liquefaction capacity replaced former supply bottlenecks.
Finding their export revenues shrinking, the governments of oil producers had less to spend on social and economic diversification programmes. Several tried to extract more rent from foreign oil firms operating on their soil. Others, following populist agendas, threatened to nationalise their energy sectors.
Climate change clawed its way up the international agenda and seemed to hold bright prospects for renewable energy development. Yet existing manufacturers of solar panels and wind turbines found their customers reluctant to spend, sending prices for the hardware plunging in oversupplied markets.
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