The US focus on increasing it’s energy self sufficiency due to the rising level of production of gas, from sources such as shale, existing field tight gas, blended ethanol and other renewable sources will in turn impact on world oil and gas prices, commodities and the value of the US Dollar and other currencies.
The EIA reports on the US dependence on imported petroleum liquids declining by more than 1 million barrels per day by 2020, with the fracking production of gas to increase US reserves to around the 100 year level.
It is anticipated that Australia will become the largest energy exporter in the major industrialised economies with the potential to ship LNG, coal uranium and oil to the Asian economies
With the US not as dependent on Middle Eastern crude, China and Europe, along with Japan, Korea and India could become major users. But with the value of the Dollar on the increase, oil prices will not necessarily rise as many projections forecast, while renewables are therefore likely to remain uncompetitive and need subsidies for longer.
Article source: British Investment Digest
Photo courtesy of FLICKR user: Jurijus Azanovas
How Financial Directors can Regain Power Over Rising Energy Costs Impacting Their Organisations’ Profits
Wholesale energy prices have soared in the last six months as high oil prices continue, the Middle East is uncertain and the nuclear disaster in Japan causes concern. The major energy providers have passed these price increases on to their business customers. Many face energy bills which could be 50% higher than they were paying only two years ago.
In June 2011, the FT and The Economist Business Barometer Research found that leaders foresee the biggest risks to their businesses to be rising costs of oil, commodities prices and interest rates. This prompts greater scrutiny of their profit margins and higher expectation for financial directors to perform in challenging times.
In July, after a second major British energy supplier announced double-digit tariff increases, RWE npower reported: ‘Three hundred major and small energy user companies counted energy as a top risk concern, next to sales and legislation, in their Business Energy Index 2011. Only 66 percent said they had a strategy to manage it.’
One of Consultantswas back with us for some continuing professional development training this week and while catching up on general news he happened to mention a £1,073 rebate on a gas overcharge he’s just identified for a small client.
This might not seem too significant, but for an organisation that usually spends about £1,903 per year on their gas supply it could have made a big difference to their budgeting for the year. The error occurred when a new meter was fitted at the client’s premises and the gas supplier took an incorrect reading – or rather made an incorrect assumption from their reading – which made it look as though they had used twice as much gas as they actually had. As is the case in many companies, the client themselves hadn’t picked this up – after all, it’s not a huge amount and they didn’t have the time, internal resource or expertise to check every detail on every invoice every month.
Of course, now they have an Auditel consultant working, essentially, as another member of their management team, they have got all of these things and a rebate from the gas supplier. What’s more, because Denis will be checking all their invoices going forward, they also have peace of mind that if it happens again, there’s no chance of it slipping through the net unnoticed.