Petrobras CEO at Platts Global Energy Outlook Forum: Tight Oil Market is “New Normal”

Oil Major Along with Executives, Economists and Officials Made Comments at Fifth-Annual Event.

New York – The era of cheap oil is over and “the new normal will be a very tight oil market,” said Petrobras chief executive officer José Sergio Gabrielli de Azevedo to the fifth annual Platts Global Energy Outlook Forum, “The World’s Quest for Clean Energy,” held in New York City today. He said one factor that may shift the balance will be the penetration of electric vehicles.

Nearly a dozen panelists from the energy industry, government and think tanks engaged in wide-ranging discussions centering on the challenges to and realities of the green economy and the economics and supply/demand factors of low-carbon energy alternatives for the future.

Attending executives largely echoed Gabrielli’s view that tight oil supplies are here to stay and that oil exploration will be more difficult and more expensive going forward. However, one common counterpoint was that renewals development is advancing past its infancy. Panelists held differing views on how best to get scalable renewables development off the ground and to what degree government should be involved in that development. Executives had mixed views on the degree to which the global economic slowdown will affect the advancement of renewables.

An economic recovery could pull down U.S. gasoline demand by 300,000 barrels per day (b/d) to 600,000 b/d as drivers replace aging vehicles with more fuel-efficient models, said Kevin Book, managing director of ClearView Energy Partners, one of the presenting panelists.

Jean-Paul Crouzoulon, Senior Vice President Operations, AREVA Renewables, said, “One key to overcoming the complexities of supply and demand is looking at integrated approaches.” He stressed that a portfolio approach that incorporates hybrid solutions that combine renewable with other energy sources is the way to optimize effectiveness.

Southern Nuclear General Manager Cheri Collins said educating citizens on the realities of supply and demand in the quest for clean energy is imperative if the nation is to put thoughtful, balanced thinkers into positions of influence regarding a national energy policy and energy regulation. “The more U.S. voters know about energy alternatives and the role each source can play in a balanced strategy the better off we will be. . .As Southern company’s CEO, Tom Fanning says, ‘The issue of a national energy policy is not a Democrat issue. It's not a Republican issue. This is an American issue.’”

Manhattan Institute Senior Fellow Peter Huber raised the question as to how, if at all, “the green economy” can operate in ways that are of interest not only to government agencies that tax, subsidize, or regulate, but also to the private money economy, and most especially privately owned electric utilities.

The Platts Global Energy Outlook Forum is an open, ongoing platform for critical debate of the issues facing energy and supply sustainability. This year’s Forum included two roundtable discussions – “Energy Outlook for 2012 and Beyond, the Supply and Demand Realities” and “The Green Economy” -- and a keynote address. See full agenda here.

The Forum is held annually in association with the Platts Global Energy Awards, a program now in its 13th year, recognizing exemplary industry leadership and innovation in more than a dozen performance categories spanning the entire energy complex. [www.platts.com/ConferenceDetail/2011/globalenergy/index].

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