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Mon, Nov 1st 2010, 23:32

Dariusz Lesniak, NYU: SCPS, Bronze Contributor (17)

China has indeed been busy; snapping up supplies of energy in Africa, Eastern Europe, as well as negotiating deals with Russia and other neighboring nations. I wonder though if the perceived threat of China is over-inflated. Ultimately, even China will feel the pinch of the global recession, which will impact its need for energy amongst other components of its economy.

Wed, Nov 24th 2010, 05:48

Alexander M. Vinograd, NYU , Bronze Contributor (15)

Global economies will eventually grow out of this recession, and the growth for the demand in resources will again increase. We must be prepared for a more highly competitive and further unregulated and volatile market.

One of the main problems with the global energy sector is that it is not governed by any consistent set of rules or a regulatory body, such as the WTO. It is outside the international legal framework, and are thus subject to the policies and capacities of the countries that produce, price and export these resources. Nationalism is also playing a more predominant role in the energy field, where governments are taking a more influential role in the production and competition of energy supplies. Governments acting as gate keepers are easily corrupted, in order to extract benefits and side deals benefiting a few, furthering unfair competition.

We will eventually again find need to be vigilant of oil price hikes, due to less than sufficient supply and increased demand. The potential of oil embargos created by energy cartels is a foreseeable possibility, now for more politically motivated reasons. Multinational have a less of a clout in foreign nations and more and more regional alliances are formed no longer under the clout of U.S. Hegemony. Rising demand for resources will in the long term increase the likelihood of conflict as resources become more scarce.

The supply of alternate resources will play a major part in reducing dependence but not sufficiently. The ultimate goal should be to trade energy in the open market and depoliticize it as much as possible in order to void the volatility and conflicts that accompany it. Saudi Arabia's new seat on the WTO should hopefully incentivize other nations to move towards a more open market based behavior.