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Considering the increased complexity of energy projects as companies are entering a new technological era marking the end of "easy oil", there is a growing concern about the real preparedness of companies to deal with the new risks they are facing. The potential severity of those risks due to the important damages caused to the environment and their possible impact on populations explain this apprehension.
A new era and an uncertain future
Few would go against the view that energy companies and policy makers are facing significant challenges as we enter a new era. The issues to be addressed are many: can we count on technological breakthroughs to cope with surging energy demand and at the same time handle the long term environmental constraints? What type of regulatory framework is most likely to provide the incentives for the necessary changes to take place? To what extent are nations ready to cooperate in addressing global energy challenges? Can we be assured that capital markets will provide the tremendous funds needed to develop energy infrastructures and improve energy efficiency?
Patrick Gougeon presents to the Industry and Parliament Trust (IPT) Energy Commission
Last week Prof. Patrick Gougeon gave a presentation at the Industry and Parliament Trust Energy Commission.
We are delighted to share Patrick's presentation and introduction here.
For more information on the Energy Commission's work, please visit http://www.ipt.org.uk/PolicyEvents/Energy.aspx
The shortage of engineering skills to meet the energy industry demand is a well established statement, particularly in the UK[1]. Even if they differ as to the estimated size of the gap the many reports on that issue all conclude that for the coming years the number of graduates will not be sufficient to meet the growing needs due to the redeployment of the energy system. The reason for that is also well known: because of weaknesses in maths, too few students can access to STEM[2] programmes. Unfortunately however, even if remedial actions are taken now it will take years before an impact on the outflow of engineering graduates is effective. So, what can be done now?
Are investors running away?
With a barrel of oil worth about $30 today and no clear signal of rebound, whereas for most companies the break even price is above $50, the harsh reality for the oil and gas industry is well expressed by the following: “The longer you’ve got low oil prices, the more companies will have to focus on pure survival” [1]. In this context the generous oil major’s payouts seem a bit quirky. A recent survey [2] provides indications on the dividend policy of large oil and gas companies (table 1)
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