The last decade has seen major changes in energy from the 1990s. The cost of most forms of energy has increased in real terms, security of supply has become an issue and environmental issues are a global concern.
| 1990s | 2008 | 2012+ | |
| Oil | Long-term price below US$20 a barrel | Long-term price over US$60, spikes to US$100 | Price US$80-90, uncertain outlook |
| Plentiful supply | Concerns about peak oil and security of supply | Concerns about adequate investment and future supply | |
| Gas | Prices will fall | US prices over $6/mmbtu, rising Australian prices | Low US prices, prices increasing elsewhere |
| Conventional gas supply | Growth of unconventional | Unconventional mainstream in US and Australia, exploration rush elsewhere | |
| Substantial stranded resources | Growing global trade in gas | Continuing growth in Asia-Pacific LNG | |
| Electricity | Competitive reform to reduce prices | Concerns about black-outs and infrastructure investment | Increasing prices |
| Environment | Little impact on energy development | Commitment to a need for climate change action | Climate change action, increasing concerns about energy land-use |
| Renewables | Minority interest | Area of interest for mainstream investors | Increasingly mainstream |
| Nuclear | Little interest. | Strong interest | Uncertain outlook |
For most of the first decade energy prices (oil, gas and coal) were rising, costs were also rising and there was ample finance for a limited number of opportunities. Commodities and infrastructure also became increasingly important asset classes for professional investors.
The picture changed in 2008. Spot energy prices fell, finance was scarce and more expensive and some marginal projects were being deferred or cancelled.
However growth in energy demand has since returned, despite the uncertain economic outlook. In particular the growth of Asia and the Middle East will continue to drive growing demand for energy, with pressures on prices, security of supply and the environment.
In this turbulent environment companies, investors and governments need:
- Robust and timely market data,
- Rigorous analysis to identify risks and opportunities, and
- Sound strategic advice.
EnergyQuest provides all three.
EnergyQuest also takes an integrated approach. Most energy issues have four dimensions:
- Economic growth: energy is a critical driver of economic growth and living standards.
- Energy security: governments, companies and customers want reliable and secure energy supplies.
- Environment and sustainability: Commitment to the need to reduce pollution and greenhouse emissions from fossil fuels and to develop sustainable energy sources.
- Equity: while the developed world has access to reliable power and motorized transport, 1.6 billion people in the world do not have access to electricity.
There are numerous trade-offs between these dimensions and no energy solution fits well with every dimension. We take an integrated approach to energy issues, taking account of the four dimensions.