Baker Institute conference, study to weigh risks for global energy markets

Baker Institute conference, study to weigh risks for global energy markets

BY FRANZ BROTZEN
Rice News staff

A conference at the James A. Baker III Institute for Public Policy will bring together senior policymakers, economists, academic specialists and industry professionals to discuss the geopolitical risks currently facing international energy markets and the global financial system.
 
The conference, titled “The Global Energy Market: Comprehensive Strategies to Meet Geopolitical and Financial Risks,” will be held May 21 from 8:30 a.m. to 5 p.m. in James A. Baker III Hall’s Doré Commons. It is sponsored by the Baker Institute’s Energy Forum.
 

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Panelists will also investigate the consequences that such risks could pose to energy security, pricing and supply, as well as to the transparent and smooth operation of the global market for oil and natural gas trade and investment.
 
In recent years, a growing scarcity of energy commodities worldwide has heightened concerns about key geopolitical risks and threats, such as conflict in the Middle East, terrorism and resource nationalism. However, a study to be released at next week’s conference by the Baker Institute suggests that, taken individually, many of the risks driving the oil price premium may be less catastrophic than they seem at first glance.

The study, which was written in conjunction with the Institute of Energy Economics, Japan, analyzes several of the top current market risks, including the U.S.-Iranian conflict over Tehran’s nuclear aspirations, Russia’s aggressive natural gas strategies in Europe, resource nationalism in Latin America and international terrorism against oil facilities, among others. It concludes that dire predictions that markets cannot alone allocate the costs of these risks in a manner that would avoid wars among major nations are unfounded.

Nevertheless, the study warns that energy and financial markets still face a substantial threat from the ongoing petrodollar boom cycle. It also warns that the high speed of globalized market contagion means that any sudden collapse of asset bubbles in one part of the world could threaten the smooth operation of the entire global financial system, should proper economic policies not be put in place.
 
The Shell Distinguished Lecture Series keynote speaker at the May 21 event will be Martin Feldstein, the George F. Baker Professor of Economics at Harvard University and president of the National Bureau of Economic Research. Feldstein’s speech is titled “The U.S. Economy, Financial Markets and the Price of Oil.”

The conference also features two keynote speakers: Thomas Fingar, deputy director of National Intelligence for Analysis and chairman of the National Intelligence Council, and Reuben Jeffery III, undersecretary for economic, energy and agricultural affairs and coordinator for international energy affairs at the U.S. Department of State.
 
Topics to be discussed by the conference panelists include resource nationalism and conflict, oil and terrorism, Iran and the nuclear standoff, scenarios for disruptions in Russian natural gas supplies to Europe and oil, the dollar and financial markets
 
For more on the conference, or to view the webcast, go to www.bakerinstitute.org/events/the-global-energy-market-
comprehensive-strategies-to-meet-geopolitical-and-financial-risks.

Rice faculty, staff and students who want to attend must RSVP by e-mail (bipprsvp@rice.edu) or by fax (713-348-5993).