Energy News (April 01, 2001)

Critical Potential Crises in Energy Supplies and Global Warming

The California energy crisis and OPEC cutbacks only hint at the challenges utilities face between now and 2010, according to a new Deloitte Research report, Geology, Geo-Politics, and Global Warming. The report, based on survey results and interviews, is Part 3 of the authoritative study, The Utility Executive’s Field Guide to the Future.

The utility business runs on fuels that are subject to three big uncertainties, says study director Dwight Allen. The first is whether OPEC’s oilfields will start running low. The second is whether political troubles will block the flow of oil and gas. And the third concerns the “greenhouse effect”.

“It’s possible to minimize the risk [to utilities and other energy firms] in this uncertain time, while also moving forward with business planning,” says Allen. Additionally, utilities need systems, processes and a culture that makes them versatile–that permits them to nurture “just-in-case” technologies, products and businesses, spot leading indicators of change, and switch strategies without confusion and delay.

“With conditions this unsettled, companies should not lock themselves into one set of assumptions as to how things will turn out,” advises Allen. “Almost any forecast will be off to some degree, and the odds of being spectacularly wrong are far higher than before.”

Parts 1, 2 and 3 of the report are available by visiting http://www.dc.com