Mr. Tony Hayward, chief executive of BP made a dramatic revelation about the evolving energy industry published at the Telegraph last week.
He said that the "centre of gravity" of the energy markets had permanently shifted towards emerging markets.
We quote Mr. Hayward (emphasis added), ``But one event went almost unnoticed. 2008 was the year when the centre of gravity in the energy market tilted sharply and permanently towards the emerging nations of the world. For the first time ever, non-OECD energy consumption outstripped that of the OECD nations.
``This really is a decisive moment. People have been predicting such fundamental shift, with its implications for the world economy and geopolitics, for some time. Now it has happened."
Yet, ironically, many so called experts stubbornly insist that the world can't decouple.
He said that the "centre of gravity" of the energy markets had permanently shifted towards emerging markets.
We quote Mr. Hayward (emphasis added), ``But one event went almost unnoticed. 2008 was the year when the centre of gravity in the energy market tilted sharply and permanently towards the emerging nations of the world. For the first time ever, non-OECD energy consumption outstripped that of the OECD nations.
``This really is a decisive moment. People have been predicting such fundamental shift, with its implications for the world economy and geopolitics, for some time. Now it has happened."
Yet, ironically, many so called experts stubbornly insist that the world can't decouple.
Adds Mr. Hayward, ``As has been the case for several years, China again led the way in incremental energy consumption in 2008, accounting for three-quarters of the extra growth, and India took second place.
``Both countries rely heavily on coal for power generation. China in particular has extensive coal reserves and this means that coal remains the fastest-growing fuel, as it has for six consecutive years.
``The shift in energy consumption towards the non-OECD is not a temporary phenomenon. On the contrary, I believe it will increase still further over time. It is a trend which will continue to affect prices and raise questions about the sustainability of economic growth, energy security and climate change."
Well it isn't just Mr. Hayward or BP saying so, research institute McKinsey Quarterly observes the same dynamics in motion too.
Mckinsey Quarterly's Interactive chart depicting of the World Energy Demand (I placed it under a severe downturn scenario).
Also Mckinsey Quarterly's Interactive chart on World oil consumption (I also placed it under a severe downturn scenario)From McKinsey, “More than 90 percent of this demand expansion will come from developing regions, with China, India, and the Middle East leading the way. Five sectors within China—residential and commercial buildings, steel, petrochemicals, and light vehicles—will account for more than 25 percent of global energy demand growth. India’s light-vehicle, residential-buildings, and steel sectors and the Middle East’s light-vehicle and petrochemicals sectors will be other notable contributors to the growing demand for energy.” (bold highlight mine)
So Emerging Market demand, restricted supplies, inflationary policies and limited geographical access adds up to $200 oil or more as we wrote in $200 Per Barrel Oil ,Here We Come!
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