Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Outsourcing and energy, not interest rates, dominate discussion about the economy at Fortune’s Brainstorm conference.
Paul R. La Monica, CNNMoney.com
Forget about the Fed. Attendees at Brainstorm had longer-term economic concerns.
Although the Federal Reserve will in all likelihood raise the target on a key short-term interest rate for a 17th consecutive time on Thursday, economists at Brainstorm, a conference sponsored by FORTUNE Magazine and the Aspen Institute, were not discussing the rate outlook, inflation, or other factors that have recently roiled the markets.
Instead, the issues of outsourcing, technology and energy dominated two panel discussions about the global economy on Wednesday.
Alan Blinder, a professor of economics at Princeton University and former vice chairman of the Federal Reserve, said the biggest threat to U.S competitiveness in the global economy is the continued shift of jobs overseas.
“The potential shift is massive, dwarfing anything we’ve seen in the past couple of years,” he said. Blinder estimated that between 28 million and 42 million jobs in the U.S. are “potentially offshorable” and warned that it may not just be manufacturing and call center jobs that are at risk.
He said that any services job that doesn’t require a large degree of personal service could wind up being lost to competitors and he thinks that a lot of white-collar workers are not prepared for this.
…
Gary Flake, a technical fellow with Microsoft (Charts), echoed concerns about investing in new technology. During a question and answer session, he said it was “shameful” that the U.S. lagged other areas of the world.
Flake added that another area of technology that the U.S. must do a better job of supporting is the burgeoning field of alternative energy.
“We should have a man on the moon type mission for new energy sources,” he said.
And the discussion of biofuels like ethanol, as well as solar power and wind turbines were a big part of another panel Wednesday.
Lester Brown, president of the Earth Policy Institute, an organization focusing on ways to provide an “environmentally sustainable economy” said during a panel highlighting the risks of global consumption of oil and other natural resources, said that is becoming obvious that there needs to be an alternative source of energy besides oil.
“We are an oil-based civilization. Oil is a depletable resource and it is being depleted,” he said, adding that the drain on the world’s oil supply will only worsen as China becomes more of an economic power.
(29 June 2006)
Australia: Howard faces balancing act over China
Wendy Lim, NZ Herald
Australian Prime Minister John Howard, keen to boost ties with an increasingly powerful neighbour, promised China yesterday his country would be a reliable supplier of the energy it needs to fuel growth.
Speaking at the unveiling of the country’s first receiving terminal for liquefied natural gas, which will get its supplies from Australia’s North West Shelf project under a US$19 billion deal, he drew an unspoken comparison with regional competitors for China’s investment.
“Australia is a stable, reliable, competitive supplier of energy. We deliver our commodities on time, we deliver them safely, we deliver them according to the prearranged agreed price,” Howard told journalists on his ninth visit to China.
Beijing has been arguing with Indonesia over the cost of gas for a second terminal in Fujian province, because of steep rises in global markets since the two agreed an initial price.
(29 June 2006)
Petro-hysteria grips a superpower
Peter Kiernan, Asia Times
High oil prices, political instability in oil-producing states, the rise of energy-hungry China, jihadist terrorism and the return of “resource nationalism” are factors constantly cited in Washington these days as evidence that national security is being undermined by unrestrained consumption of oil. Petroleum, once seen as the energy source that fueled the “American century”, has more recently been interpreted by some legislators, policymakers and pundits as the Achilles’ heel of global dominance.
Daily op-ed pieces, many in fact written by neo-conservatives, state that US dependence on imported oil strengthens assertive petro-states that work against America’s interests, bankrolls jihadist terrorism, and allows producers to leverage their market power now that prices are high. Others warn of Chinese energy “mercantilism” sowing the seeds of conflict between the United States and China.
… Inevitably, the argument goes, China is on a collision course with the United States, as it will cultivate close ties with oil producers inimical to US interests, namely Iran. It has also been stated that China may even challenge the United States’ role as the security guarantor of the Middle East as well.
US-China relations are mixed, but both powers have a common interest in the stability of oil supplies as significant consumers who are also increasingly dependent on imports. This can be used as a source of cooperation with the right policy mix by both states, and does necessarily imply an automatic degeneration into conflict.
China’s energy acquisitions may not always be economic, but ultimately if this is the case it will be China that pays the price. Furthermore, its development of oilfields leads to a greater level of global oil supply, rather than resulting in a situation where one more barrel of oil for China means one fewer barrel for everyone else. Overall, China’s energy policy is more defensive in nature, and it does not seek direct confrontation with the US over energy supplies. Treating China as if it does, however, may eventually lead to the realization of a self-fulfilling prophecy.
The debate over the linkage between oil dependence and national security is a valid one, but needs to be tempered with a realistic assessment of what the problem actually is, and a clear understanding of what’s required to be done about it. Prices are high and markets are tight, but there’s no reason to run for the hills just yet.
Peter Kiernan is a Middle East and energy analyst in the Washington, DC, area.
(1 July 2006)
