Energy Strategy for the Road Ahead

Energy Strategy for the Road Ahead

Scenario Thinking for Business Executives

and Corporate Boards

2007

a member of the Monitor Group

Printed on 100 recycled paper

Copyright 2007 Global Business Network a member of the Monitor Group The US Environmental Protection

Agency (US EPA) and its ENERGY STARreg Program supported this effort We encourage readers to use and

share the content of this report with the understanding that it is the intellectual property of Global Business

Network and US EPA ENERGY STARreg and that full attribution is required

101 Market Street Suite 1000 bull San Francisco CA 94105 bull Telephone (415) 932-5400 bull Fax (415) 932-5401

wwwgbncom

GBN Global Business Network bull Energy Strategy for the Road Ahead

Table of Contents

Executive Summary 2

Introduction 4

Rehearsing the Future through Scenario Thinking 6

Creating the Scenarios 7

How Might the US Energy Environment Evolve through 2020 7

The Scenario Framework 8

ldquoThe Same Roadrdquo 10

ldquoThe Long Roadrdquo 12

ldquoThe Broken Roadrdquo 14

ldquoThe Fast Roadrdquo 16

Implications for Energy Management 18

Energy Strategy for the Road Ahead 20

First Master the Fundamentals 21

Second Take Both a Longer and a Broader View 22

Third Search Out Business Transformation Opportunities 24

Fourth Prepare Contingent Strategies 26

Finally Take Personal Action 27

Appendix Scenario Comparison Tables 28

Summary of Key Elements 28

Implications for Energy Value Chain 30

Notes 31

Acknowledgments 33

Energy To-Do List Back Cover

GBN Global Business Network bull Energy Strategy for the Road Ahead 1

Executive Summary

What if hellip terrorists destroy three Gulf Coast oil refinery operations

hellip a new more global and powerful OPEC emerges to embargo US companies

hellip the US spurred by major shifts in public opinion about climate change enacts aggressive mandatory targets to cut greenhouse gas emissions

As alarming or unlikely as these possibilities may sound proactive US corporations are systematically looking at the risks that energy impacts may present for their businesses in new ways They are doing this to successfully manage energy-related risks despite deep uncertainty about the future These companies are valuing energy very differently today than they did 20 years ago Why the change Senior executives realize that given the dynamics of todayrsquos world energy has emerged as a greater risk to the health of their business than in the past The very astute also see greater opportunities arising from these uncertainties

Recently a group of senior corporate executives from a variety of manufacturing and commercial companies worked with Global Business Network (GBN) and the US Environmental Protection Agencyrsquos ENERGY STARreg Program to evaluate how the world energy scene might impact their businesses through 2020 The group framed and created four plausible ldquoroadsrdquo ahead each posing a specific challenge to corporate leaders

ldquoThe Same Roadrdquo where the world continues much in the same direction it appears to be going now in regard to How would energy and environmental concerns around your company climate change as it operates

ldquoThe Long Roadrdquo where the world undergoes a significant shift in today survive economic geopolitical and energy centers of gravity

mdash or even succeed

ldquoThe Broken Roadrdquo where the world continues much in the direction of today but is then hit by a severe event that overturns established systems and rules

on mdash a journey down

ldquoThe Fast Roadrdquo where reasoned decisions and investments about energy and climate risk are made early

any of these roads

enough to make a difference

Participating Companies

California Portland Cement HSBC PepsiCo Frito-Lay Cascade Engineering Jones Lang LaSalle PPG CEMEX Merck amp Co Procter amp Gamble Dow Chemical Mercury Marine Shell NA Eastman Chemical Mittal Steel Toyota NA Genentech National Starch amp Chemical UPS General Motors Owens Corning


Energy-intensiveBefore taking any trip seasoned travelers prepare Similarly travel on any of these roads requires advance preparation in the form of corporate energy strategies Our group of business executives companies are not looked to the scenarios and considered the strategies that would the only ones enable a company to successfully travel along whichever future concerned aboutactually emerges The widespread conclusion is that there are several steps that all businesses can take now to ensure energy managing an success regardless of the future increasingly volatile

First Master the Fundamentals of energy efficiency Build an future Everyone energy efficiency culture through executive leadershipmdashappointing needs an energyan empowered corporate energy director and team setting and climate aggressive goals measuring and tracking energy performance for all operations and establishing accountability and review and strategy Nowrecognition systems across the business

Second Take Both a Longer and a Broader View of investments and strategic decisions about energy Make major company strategic decisions (eg acquisitions technology choices and facility location) with energy cost use and supply in mind Balance more assured returns of energy project investments against lower initial returns across a longer time horizon See the entire Energy Value Chain including upstream inputs from suppliers (into internal operations) and downstream outputs to customers (from internal operations)

Third Search Out Business Transformation Opportunities in the way the company manages procures and uses energy Frame energy as a lever for positive growth and change within the business not simply a cost Make the most of the strategic value of energy by thinking in terms of ldquoEmbedded Energyrdquo and ldquoEnergy Productivityrdquo Be innovative and aggressive in pursuing and publicizing new product and service offerings based on new energy technologies and supplies

Fourth Prepare Contingent Strategies for emergent future scenarios Rehearse specific aspects of the future including substantial and sustained swings in energy price and supply severe weather events and penalties or incentives around energy use and greenhouse gas emissions Actively manage exposure to risks and ready plans to take full advantage of what the future brings Monitor for signs of which ldquoroad aheadrdquo is emerging

Finally Take Personal Action Corporate leaders can take a number of ldquoto-dordquo actions today for tomorrow All can be taken individually in companies on boards and across industries For specifics see the back cover of this report

What if hellip a business could increase energy efficiency by 5 percent in one year and then do better in each of the next five years

hellip a corporation could use investments in energy as strategic stabilizers to ride out uncertain times

hellip a company could identify major new opportunities for its skills and products in a world that is reinventing its relationship to energy


Introduction

ldquoMy interest is in the future because I am going to spend the rest of my life thererdquo

mdash Charles Franklin Kettering founder AC Delco and Vice President General Motors Research (1876 ndash 1958)

In the last year energy and climate change issues have moved from the sidelines to center stage Once a topic ldquoownedrdquo by environmentalists it is increasingly one that is ranked as urgent by senior executives from just about every industry There has been a wholesale shift in business attitudes in the US around climate change and energy in the last year coinciding with the course of this project Companies are beginning to see the true costs of carbon-centric energy consumption patterns exemplified by recent natural disasters like Hurricane Katrina combined with volatility in energy markets geopolitical turmoil changes in the regulatory climate surging energy demand from emerging economies and changes in the attitudes of customers This congruence of concerns around cost supply reliability and environmental impacts of the energy needed to sustain our economies and very way of life are increasingly influencing business decisions at the highest level In short our relationship to the energy that drives our economies and societies is in the throes of a fundamental transformation

As a result of this rapid change of perceptions corporate America has reached a tipping point with companies across a host of industries now making the cost availability and environmental impact of their end-to-end energy consumption a strategic priority Increasingly the wider impact of climate change on their markets and operations is being factored in They are now frequently viewing energy management as a form of risk management What had once been managed purely as a cost is increasingly being managed as a strategic riskmdashand even intriguingly as a source of new value and opportunities

However the future of energy is still very uncertain territory Factors such as growing world energy demand threats to supply from terrorism emerging regulations and market changes to address climate change and developments in efficiency and alternative energy are just some of the issues pushing that uncertainty still higher leaving the timing and nature of the transitions and shifts ahead over the next several decades impossible to predict Nevertheless decisions must be made by companies not only to secure energy but to use it productively over the long term Despite major uncertainties about tomorrow critical decisions must be made by executives today Making such decisions requires corporations to deepen their individual and collective understanding of the dynamics ofmdashand possible strategies formdashthe USrsquos energy future


This report is the result of just such an effort Starting in November 2006 the US Environmental Protection Agencyrsquos ENERGY STARreg Program sponsored two groundbreaking workshops The first brought together a group of influential corporate leaders from a broad spectrum of industries to participate in a scenario planning exercise on the future of the US energy environment through the year 2020 This group developed four scenarios about how US energy issues might play out over the next 15 years with active facilitation contribution and analysis by Global Business Network a member of the Monitor Group

In February 2007 a second group of senior executives came together to consider the business implications of these scenarios They assessed how these different futures could influence the way corporations approach and manage energy They also evaluated possible strategies that might enable their companies to sustainmdashor potentially re-inventmdashtheir core business within and across these various futures in spite of the high levels of uncertainty over how the energy future might play out

This report is designed to be useful both for the business leaders who attended these workshops and those who did not It is divided into three sections The first explains how scenarios work and why they offer uniquely valuable insight into the underlying uncertainties of the emerging and evolving energy environment we are facing The second outlines four scenarios for the future of US energy and begins to explore how we might know if these scenarios are playing out The third communicates key strategic steps that any executive corporate leader or manager canmdashand even mustmdashtake to successfully navigate future uncertainty around energy given these possible roads into the future

PROJECT SUMMARY

Goal Understand the factors that are likely to influence the US energy environment in the future and create strategies for its management

Approach Conduct a scenario-based analysis of the future of the US energy environment through the year 2020 and consider implications of those changes in terms of how they could influence the way corporations manage energy

Support Two groups of managers and executives from a variety of industries facilitated by Global Business Network and its Chairman Peter Schwartz business strategist and futurist

ldquoBoth Hurricane Katrina and the Russian natural gas embargo on the Ukraine are mere hints of the growing vulnerability of our energy systemsrdquo

mdash Peter Schwartz scenarist strategist and GBN Chairman


Rehearsing the Future through Scenario Thinking

ldquoYou can never plan the future by the pastrdquo mdash Edmund Burke political philosopher (1729 ndash 1797)

There are a number of trends that moving on their current course could significantly change the US energy environment over the next decade or two New directions will come from technological innovation inside and outside of the energy sector along with emerging national or state-driven regulatory change and policies to address environmental concerns such as climate change The US energy environment also exists within a global market shaped by a wide range of geopolitical environmental economic and social forces To cope with this complexity and to encourage new and open thinking about the longer-term future the US EPA through ENERGY STARreg and consultation with GBN chose scenario planning as the tool for initiating new thinking about more strategically managing energy in the face of inherent and increasing uncertainty

Scenarios help us make sense of our emerging future They are not predictions nor are they strategies They are stories with a beginning a middle and an end Scenarios outline and then add color and dimension to plausible futures in which we might find ourselves They enable us to rehearse the future to test current strategies and to generate novel approaches and options when it comes to making decisions today to prepare and plan for tomorrow Scenarios also help us discover robust strategies for a range of possible futures and by so doing highlight the risks and opportunities inherent in each of these future worlds

Scenario thinking simultaneously considers a number of different possibilities in order to make better-reasoned choices and to rehearse todayrsquos decisions against a variety of futures Such rehearsing often leads to decisions that are more likely to stand the test of time create distinct competitive advantage and produce robust strategies By recognizing the signs anticipated in scenarios decision-makers can also gain advantage through flexibility avoid surprises and act effectively and proactively


Creating the Scenarios To be useful scenarios must be focused The set of scenarios created in the November 2006 workshop were anchored by the following focal question

How Might the US Energy Environment Evolve through 2020

From this standpoint the group identified the forces of change in the world that could have a significant impact on the issue in question GBN engaged the group in a detailed process that systematically considered many factors that could influence the future US energy environment The discussion was also informed by a number of subject matter experts in the areas of oil commodity markets energy technology regulation and policy Project participants focused on the most uncertain forces ultimately arriving at consensus around a set of eight critical areas of uncertainty

1 Advances in global energy supply and use technologies

2 Shifts in US politics and regulations related to climate change (especially as the impact of carbon dioxide emissions)

3 Public and shareholder perceptions of climate change

4 Shifts in financial markets that impact energy markets

5 Changes in energy commodities supplies

6 International political and economic patterns around energy

7 Growth in energy efficiency

8 New business opportunities arising from energy and climate change


Once identified these uncertainties were narrowed down Two seemed simultaneously most uncertain and most critical to the issue at hand These chosen two were then overlaid on axes where the endpoints represent extremes of how that uncertainty might play out

How might shifts occur in US political and regulatory arrangements especially as it relates to carbon dioxide emissions and climate change

Shifts in US Politics and Regulations

Less emphasis on controlling carbon emissions

Economic growth more of a priority

No new regulations or incentives

More emphasis on controlling carbon emissions

Environmental health more of a priority

New regulations and incentives

How might changes occur in global economic patterns markets and rules that drive general energy demand supply and prices

Changes in Global Economic Patterns

Production and capital flows re-center toward the industrially developing nations

More volatile energy price swings

Production and capital flows remain centered in historically industrial nations

Less volatile energy price movements

Centered in Historically The Scenario Framework Industrial Nations

The two axes were then crossed to form a two-by-two matrix framework consisting of four scenario quadrants Each quadrant represented a plausible and relevant story that

Looser Shifts in US Politics and Regulations

Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today

Tighter taken as a set provided different Carbon Carbon Focus future trajectories Focus

Centered in IndustriallyDeveloping Nations


T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip

This framework not only allowed other important areas of uncertainty to be played through each quadrant but also served as backdrop for movement across between and through each quadrant Workshop participants all agreed that the upper-left quadrant is where we find ourselves in 2007 but they did not see that quadrant as a steady state How would we move from where we are today to where we will find ourselves tomorrow What would be the paths into the future

Project participants agreed that four possible different ldquoroadsrdquo lie ahead for the future of energy ldquoThe Same Roadrdquo moves slowly to the lower left ldquoThe Long Roadrdquo moves quickly through the lower left to the lower right and then heads for the upper right ldquoThe Broken Roadrdquo circles in the upper left before heading to the upper right And ldquoThe Fast Roadrdquo moves directly from the upper left to the upper right

The scenarios that follow are not meant Centered in Historically

to be exhaustive They are designed to dustrial Nations

be provocative yet plausible and wide-

oda y

Sh in US Politics and Regulations

obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos

ranging yet bounded Once these futures were created the next step was to try to imagine what it would be like for an organization or society Tighter

Carbon Carbon to live in each of these futures The Focus Focus

exercise may sound simple but the results were surprising and profound In the process of adding detail and color to each future new issues and strategic concerns rose to the surface while old issues were reframed (See Appendix Summary of Key Elements)


The story associated with each ldquoroadrdquo provides a different answer to the focal question and as such serves as a ldquowind tunnelrdquo of the future in which company executives can test and create their own energy management strategies Each scenario carries with it a set of implications for energy strategy and management at a general level Each will prompt particular options that will be industry-specific and even more precise for individual companies

Scenario Thinking

1970

1980

1990

2000

2007

2020


ldquoThe Same Roadrdquo

Today global economic growth keeps the US energy environment in familiar territory Energy prices fluctuate in well established patterns along an upward trend with a series of price spikes Economic power steadily shifts toward developing nations but not at a disruptive pace that threatens the historically industrialized nations There is slow growth toward strategic energy management due to relatively low energy prices few government incentives and lack of policy initiatives to address climate change

Beginning Years 2007ndash2010 The US retains its leading position in the world economy amidst a relatively peaceful process of globalization In particular relationships with China India and Russia remain positive and productive Oil and natural gas supplies remain adequate and new finds are regularly announced Oil and natural gas prices fluctuate along an upward trend but even at high points the world economy is able to adjust without significant recessions Annual GDP growth in the US remains in the 2ndash4 percent range In this environment energy management within companies remains more decentralized as most new capital investment goes overseas particularly in manufacturing

Middle Years 2011ndash2015 Although the political debate continues to raise the dangers of greenhouse gases and climate change only moderate policies are put in place most based on using economic incentives and By 2015 China

voluntary structures to address the problem Several US states surpasses the US in

successfully implement regulations that drive energy efficiency energy use and also in

throughout their economies Hybrid automobiles comprise 33 several key industrial

percent of new car sales and clean coal power plants make up markets India and

50 percent of new electricity generating capacity in the US Southeast Asia now equal

Global energy market structures continue to evolve including a the European Union in

global liquid natural gas commodity market overall GDP The US becomes just one key

The most notable feature of the world economy during these player among several as years is the continuing rise of the developing economies By China and India wield 2015 China surpasses the US in energy use and also in greater influence in both several key industrial markets India and Southeast Asia now the United Nations and the equal the European Union in overall GDP The US becomes World Trade Organization just one key player among several as China and India wield and the EU continues a greater influence in both the United Nations and the World Trade steady expansion and Organization and the EU continues a steady expansion and integration integration The problems of the Middle East are still politically tender however some agreements have been reached that

This is a world in which a combination of political inertia and


support expanded trade and dialogue both of which have brought a general ratcheting down of war and terrorism Capital investments continue to follow these shifts searching for greater returns outside of the US American companies are increasingly squeezed by ever-climbing energy prices and cost-cutting measures focus on reducing exposure to energy-related risk

End Years 2016ndash2020 World energy supplies strain to meet demand resulting in overall energy use beginning to flatten some new energy-efficient technologies coming online and renewable fuel use primarily ethanol and biodiesel expanding Oil now increasingly flows from places like Alaskarsquos Arctic Natural Wildlife Refuge Siberia and Iraq Significant innovation has also occurred in the use of liquid and clean versions of coal Concern about global climate change remains an issue but serious impacts have not been realized Companies approach energy as they would any other global riskmdashwith thorough assessment and management systems

ldquoRoad SignsrdquomdashIndicators of this Future

ldquoNot Much Market for Worry Beads in the Executive Suitesrdquo A recent study published by the accountancy PriceWaterhouseCoopers indicates that US executives rank below their international counterparts in considering the environment in strategic decision-making The study also points to a general neglect of longer-term issues that do not immediately impact profit forecasts and market sentiment (The New York Times January 27 2007)

ldquoEnergy Research on a Shoestringrdquo In spite of the recent public clamor for initiatives to combat climate change public opinion has historically proven to be an unstable base from which to launch environmental policy As public interest wanes federal funding dries upmdashfunding is already split between a myriad different programs and clean technologies At the same time general consumer habits favoring larger homes and cars and greater levels of consumption often counteract the gains from incremental efficiency gains (The New York Times January 25 2007)

ldquoGasoline Reaches All-Time Price Highrdquo Gasoline jumped to $322 a gallon matching the March 1981 inflation-adjusted all-time US high price for gasoline (ABC News May 21 2007)

ldquoSurprise Average Gas Price Dips Below $3rdquo On the other hand some motorists despite their complaints could be inured to $3-plus prices ldquoI have not seen people significantly cut back on their drivingmdashor cut back at allrdquo says the President of midwest oil company (USA Today June 22 2007)


ldquoThe Long Roadrdquo

Today

This is a world in which a combination of rapidly shifting political conditions along with booms and busts in global economic growth push the US through a long hard transition similar to the 1970s Energy prices fluctuate with large and sudden spikes and traditional energy supplies are subject to disruption and insufficient investment Economic power shifts significantly toward developing nations in a way that is very disruptive to the historically industrial nations and ultimately unsustainable for the newly emergent Movement toward strategic energy management is overly cautious and almost too late only happening after energy prices rise the locus of economic power shifts consensus around climate change passes a tipping point and companies have had to face long and difficult adaptive challenges

Beginning Years 2007ndash2010 These turn out to be the last years in which the US is able to maintain a political and economic position above almost all other countries or economic blocs The worldrsquos major economies enter a period of aggressive competition and uncoordinated economic expansion at all costs leading to a massive overinvestment in productive capacity Accelerated boom-and-bust cycles play out in 2009 and 2010 as worldwide production and consumption of durable goods and commodities swing first one way then the other Corporate energy management decentralizes with energy procurement emphasized due to strong competition between multinationals for energy supplies

Coal remains the fuel of choice for domestic power production in the US and China and these two compete for access to In 2012 the long-fearedenergy supplies even threatening politically-driven energy embargos Environmental concerns are especially notable in Chinese banking crisis hits

The weaknesses of central China particularly after the 2008 Olympics bring extensive news coverage of severe air and water pollution there Partial planning uncertain legal

solutions to greenhouse gas emissions are attempted such as structures and corruption

a cap-and-trade market for carbon dioxide but these meet with hit China hard sending

only moderate success because they are only available to repercussions throughout

specific industries and so create poor incentives for energy the global economy

efficiency China and India experience bouts of hyperinflation Stagflation emerges when

as prices rise in the face of booming demand inflation in the prices driven by inflexible costs meet declines in US rises in lockstep demand bringing a global recession in early 2013

Middle Years 2011ndash2015 Meanwhile destructive The long-feared Chinese banking crisis hits in 2012 The droughts and storms are weaknesses of central planning uncertain legal structures and increasing in more places corruption hit China hard sending repercussions throughout around the world the global economy Stagflation emerges when prices driven by inflexible costs meet declines in demand bringing a global


recession in early 2013 Meanwhile destructive droughts and storms are increasing in more places around the world causing more uncertainty and difficulty in both commodity and insurance markets All US companies tighten their belts with many consolidating and a growing number entering bankruptcy

End Years 2016ndash2020 Irrefutable evidence of climate change mounts and finally passes a tipping point that sparks a political reassessment of the role of carbon in the US economy Chinese Indian and even a few African companies charge ahead The US decides to reinvent its economy using clean energy-efficient technologies in the strategic areas of communications sensors and data management Nuclear power plants are fast-tracked and carbon dioxide taxes are enacted throughout the economy European Union companies gain market share as a result of earlier adoption of climate friendly policies in the EU Finding themselves late in the game US companies begin years of adjustment and aggressive energy management to increase efficiency and control costs as old products are replaced with versions that require less energy to produce American consumers accept tradeoffs and by 2018 a new economic cycle begins to emerge that will sow the seeds for a fundamentally restructured economy in the next generation


ldquoBarrels of Confusionrdquo Over the past year corporations investors and policy-makers have focused less on absolute oil price levels and more on their stability Watching oil prices move up and down maniacally trying to predict and avoid being caught out long-term corporate strategy is sacrificed to cope with the vagaries of ldquovolatilityrdquo and ldquomarket reactionrdquo (Business Week January 29 2007)

ldquoWorldwide Carbon Dioxide Emissions Soarrdquo Warnings about global warming may not be dire enough according to a climate study that describes a runaway-train acceleration of industrial carbon dioxide emissions Fueled by rapid growth in coal-reliant China rates of carbon dioxide emission from industrial sources increased from 2000 to 2004 ldquoat a rate that is over three times the rate during the 1990srdquo says a National Academy of Sciences report (USA Today January 19 2007)

ldquoClean Air or TVrdquo Indicative of drawbacks to Prahaladrsquos ldquoBottom of the Pyramidrdquo innovations there is a proliferation of low-cost high-pollution diesel generators in developing countries where peoplersquos demand to connect to the world exceeds their ability to connect to the grid (The New York Times January 9 2007)


ldquoThe Broken Roadrdquo

Today

This is a world in which a combination of political indecision and uneven global economics set the stage for a sudden break with the past Energy prices fluctuate in well-established patterns for several years until severe weather and geopolitical tensions create a supply shock that kicks up prices and long-term concerns Through the resulting gyrations in global trade currency and energy markets American political and business will crystallizes quickly to jump-start and accelerate national programs to move the US to global leadership Though late this movement toward strategic energy management finally takes place at a torridmdashand successfulmdashpace

Beginning Years 2007ndash2010 During these years the US enjoys the last of the good old days of relative stability with moderate energy prices and climate patterns just about within historical norms Traditional energy sources continue to expand although at somewhat higher prices Leaders feel no real pressure to make long-term investments in infrastructure to trim budget deficits or to pay particular attention to energy efficiency and climate change because there are more immediate issues to worry about mainly the Iraq war and domestic terrorist attacks Energy management is status quo ie little is invested Unfortunately a confluence of events unfolds that turns this lack of decisiveness into a costly mistake

The very short-term crippling of parts of the US energy infrastructure that occurred in 2005 with Hurricane Katrina are described by Larry King as ldquomerely the warm up for Katrinarsquos big sister Helenardquo the largest most sustained and most westerly of the new ldquosuper lsquocanesrdquo Helena scares a partially rebuilt New Orleans and then works along the coast to slam Houston leveling wells refineries pipelines and corporate campuses Meanwhile in the Middle East astoundingly rich from decades of high oil revenues and frustrated by perceived lack of progress on local issues key players form an alliance to cut deliveries of oil and natural gas to the US even though it means lower profits

Middle Years 2011ndash2015 Businesses dependent upon energy (which is to say most) experience huge spikes and swings in prices Even more difficult are the periods up to several months at a time when supply is not only severely constrained it simply does not exist and cannot be had or hedged against Industries across the board are deeply affected with transportation hit especially hard The US enters a sharp recession that lingers mirroring the decade of stagnation in Japan during the 1990s The global economy slows too seeing a 1 percent drop in growth caused by radical declines in China India and Europe Assets are simply abandoned in some countries Abnormal storms droughts and heat waves begin to routinely kill hundreds of thousands every year Agricultural production is dislocated in many parts of the world including the US further exacerbating the situation

GBN Global Business Network bull Energy Strategy for the Road Ahead14

To handle short-term needs the US switches to coal liquefying it gasifying it and investing in technology to clean it up A national political consensus gains momentum for dramatically tighter and more effective regulations to control carbon dioxide emissions EU corporations become major investors in the US as the market demands for energy-efficient and alternative energy technologies increase dramatically Experimentation with carbon trading and investment in new alternative energy supplies begins in earnest while energy management becomes a major corporate focus For a number of companies though this is too little too late and many face real layoffsmdashor worse

End Years 2016ndash2020 The US elections sweep in a political consensus that says reducing energy imports is equally important to the war on terrorism Another ldquosuper lsquocanerdquo floods New York City in 2017 stunning the nation and both rich and poor are made refugees in scenes reminiscent of New Orleans more than a decade earlier This event is the nail in the coffin for any further delay in moving the US toward a lower carbon economy Insurance companies face bankruptcy and the federal government declares a National State of Energy and Climate Emergency

The President launches an aptly named

In 2017 the federal government declares a National State of Energy and Climate Emergency The President launches an aptly named ldquoManhattan Project IIrdquo to aggressively develop new fuels urban design approaches and carbon reduction technologies Carbon emission monitoring and enforcement are backed up with stiff fines that rapidly shut down some old operations Climate penalties even threaten jail time for executives with the public asking ldquoHow could they have ignored this issue for so longrdquo

ldquoManhattan Project IIrdquo to aggressively develop new fuels urban design approaches and carbon reduction technologies many of which are imported from other countries and governments further strengthening the influence of the EU in the US economy Carbon emission monitoring and enforcement are backed up with stiff fines that rapidly shut down some old operations Climate penalties even threaten jail time for executives with the public asking ldquoHow could they have ignored this issue for so longrdquo Energy efficiency alternative energy sources and carbon reduction have suddenly become a very very serious matter


ldquoVenezuela Seizes Last Private Oil Fieldsrdquo President Hugo Chavezs government took over Venezuelas last privately run oil fields Tuesday intensifying a power struggle with international energy companies ldquoThe nationalization of Venezuelas oil is now for realrdquo said Chavez who declared that for Venezuela to be a socialist state it must have control over its resources (USA Today May 1 2007)

ldquoNY City Urged to Prepare for Major Hurricanerdquo Homeland Security Secretary Michael Chertoff warned Monday that a city on continuous alert for terror attacks also must brace itself for a natural disastermdasha hurricane powerful enough to cause serious flooding in lower Manhattan (MSNBC June 12 2007)


ldquoThe Fast Roadrdquo

Today

This is a world in which as a result of a combination of early political leadership and effective global economic and environmental decisions the US energy environment moves into a new territory of innovation Energy prices rise steadily and are high enough to allow investments in alternative energy efficiency and urban redesign to pay off A political consensus emerges early in the US for tight but incentive-heavy regulations to control carbon dioxide emissions A moderate shift in economic power toward developing nations does not threaten or disrupt the already industrialized nations and the US in particular benefits from the global expansion into the industrially developing world as it sells more high technology products and services

Beginning Years 2007ndash2010 These are the years when the US economy shifts toward a more efficient lower carbon high technology driven industrial base The boom of the late 1990s recovers from its bust in the early 2000s and a similar kind of techno-optimism returns with a younger generation of political and business leadership Following the 2008 election in the US in which voter turnout especially amongst younger Americans surges to a new high federal leaders act in a coordinated fashion on issues of climate change energy imports and foreign policy With the writing clearly on the wall most companies establish strong centralized strategic energy management programs This is triggered as much by managing downside risk as pursuing new opportunities arising from a refined market reality

Oil prices continue to fluctuate but with limited impacts due to changed market expectations of the USrsquos long-term energy security and productivity The debate about carbon dioxidersquos role in global warming is by and large settled in the US A business climate favoring reinvention for competitive advantage takes hold as federal state and city governments provide support through tax policy incentives technology development and institutional restructuring

Middle Years 2011ndash2015 In China turmoil over investments based on a now discredited energy-intensive business model poor financial management and inadequate legal protection slows its growth Perversely this beneficially cools the world economy to a more sustainable pace and enables a more balanced dialogue around managing climate change The US continues to put policies in place that restructure its economy including higher efficiency standards for cars homes and buildings along with tax incentives to reduce greenhouse gas emissions subsidies for renewable energy sources and a shift to both domestic and imported biofuels Full disclosure of climate risk exposure and actions to reduce environmental impacts becomes a required feature of company reports to the investment community

US trade flows and geopolitical alliances begin to focus more on South America and the European Union and less on the Middle East During this transition economic growth flattens in


some years as mild recessions are experienced in a few industries and regions in transition Still US companies start to feel the competitive benefits from this evolution and begin to dominate markets in such areas as clean coal technology solar energy and clean manufacturing The US lead in information technology solidifies strengthened by sensor networks real-time data management and predictive data miningmdashall technologies essential for effective energy management on a large scale The US overtakes the EUrsquos lead in energy productivity and becomes the place to be for this new energy innovation drawing talent and capital from around the world

End Years 2016ndash2020 The US accomplishes an amazing feat of transition to a less energy-intensive industrial base By 2018 there is still a lot to do Old buildings and urban land-use policies need to be overhauled and the automotive fleet requires a complete turnover But there is no debate that the changes underway will succeed Greenhouse gas monitoring and control is now widespread throughout the economy people are as accustomed to it as they are to recycling Embedded energy

and lifecycle analysis become part of the

After 2016 the US accomplishes an amazing feat of transition to a less energy-intensive industrial base There is still a lot to do Old buildings and urban land-use policies still need to be overhauled and the automotive fleet requires a complete turnover But there is no debate that the changes underway will succeed Greenhouse gas monitoring and control is now widespread throughout the economy people are as accustomed to it as they are to recycling

typical approaches to managing energy Meanwhile China India and other developing nations are adopting many of the new approaches directly leapfrogging from old methods often with technologies imported from the US Even countries in the Middle East now see the US differently not so much as a military aggressor but as a creative industrial power willing to share its technology Extreme climate change events still occur but with new technology in place and emissions continually reduced a global political consensus to stay the course is solidly in place


ldquoRising Energy Costs Spur Business to Actionrdquo More than three-quarters of American business leaders believe energy prices are going to continue climbing and as a result 60 percent of them say their companies have already or will soon implement energy efficiency in their offices and operations (GreenBizcom May 2007)

ldquoWaking Up and Catching Uprdquo A confluence of defense considerations weather events environmental stewardship and market factors is bringing together the left the right conservatives and liberals under a single banner to combat climate change As a result the political climate has shifted in a decidedly green direction (The Economist January 25 2007)


Implications for Energy Management

ldquoA thing long expected takes the form of the unexpected when at last it comesrdquo

mdash Mark Twain author (1835 ndash 1910)

As mentioned earlier scenarios are a tool for rehearsing the future and testing how decisions made today may play out in a variety of potential settings The set presented in the preceding pages poses the question What would be the impacts of these four ldquoroadrdquo scenarios on energy strategy and management in US businesses Each would matter in importantly different ways and each would call for a variety of strategies Since the future is uncertain and it takes time for the future to become clear prudent businesses prepare by developing adaptive and flexible strategies today that ensure successful navigation of any of these roads

While each road varies significantly one common theme emerges energy-related risks and opportunities will have profound impacts on US business and society during the next decade and a half Corporate leadership should act now to reduce the risksmdashand maximize the opportunitiesmdashrelated to energy and climate change for their companies As corporations develop a strategic energy plan they should at a minimum address the following questions

Energy and Climate Risk Assessment

How vulnerable are our operations including those of our suppliers to energy supply disruptions

How vulnerable is our business to energy price volatility andor increases

What energy risks do our products and services create for our customers

How will any climate change regulations effect our energy use in terms of cost compliance or incentives

How will our suppliers and customers be affected by climate change regulations

How vulnerable is our business to concerted pressure by stakeholders around climate change

How vulnerable are our facilities to extreme weather events caused by accelerating climate change


Current Energy and Climate Management

How much energy does the organization require to function effectively today

How do our current energy needs compare with those of our best global competitor

Who is accountable within our organization for procuring and managing energy use at both executive and operations levels

Are energy-related leadership functions integrated and empowered to affect change across the organization irrespective of the ultimate direction that change may take

What energy use or cost savings are possible

Are energy productivity and efficiency goals in place with achievements measured and recognized

How comprehensive are our current energy strategies

Do our equipment and site selection strategies include energy efficiency and climate risk as critical decision factors

What are our greenhouse gas emissions and where do they occur

Are our programs and processes for managing energy and climate risk sufficient

How do our programs compare with our best competitor

How do our programs compare with the best global corporate energy management practices

Transformative Opportunities

Are we better positioned than our competitors to adjust to new energy and climate risks

What factors will give us competitive and adaptive advantage in energy and carbon constrained markets

Do our policies make it easy to invest in energy efficiency or greenhouse gas emissions reductions

What investments can be made now that will have large payoffs in the future

Do we envision new business opportunities in the changing climate and energy context in all locations in which we operate



ldquoBefore anything else preparation is the key to successrdquo

mdash Alexander Graham Bell inventor (1847 ndash 1922)

To survive and even thrive on whichever road ahead all involved in this project agreed that corporations should at a minimum take the steps outlined below to prepare robustly for the future Even before the first step though and as obvious as it sounds addressing these issues sooner rather than later will ensure greater success across a range of future scenarios The corporate leaders involved in this project also agreed that all senior executives should begin by investing personal time and attention to understand the energy and climate vulnerabilities and opportunities of their business

ENERGY MANAGEMENT FUNDAMENTALS

Through the ENERGY STAR Program the US EPA has identified the fundamental elements of successful energy management

Executive commitment to continually improve energy efficiency across the entire corporation including clear processes and tracking systems to identify opportunities

An empowered corporate energy director and energy team supported by sufficient human and financial resources

A corporate energy policy that is accounted for at the top levels of the corporation

Aggressive numeric energy goals that stretch performance targets to draw out creative innovations for meeting them

Measurement and tracking of energy performance for all energy use corporation-wide including benchmarking facility performance nationally and globally with similar companies and a review system with accountability at all levels

Communication on the value of energy importance of improvement and executive commitment by consistently recognizing accomplishments


First Master the Fundamentals Every energy strategy is built upon increasing energy efficiency within all business operations Such efforts typically focus on all parts of the business since each contributes to or impacts overall corporate energy productivity A strong corporate energy management program empowered across the organization and supported by senior executives is the basic vehicle for successfully navigating the road ahead By participating in the ENERGY STARreg Program many US companies have developed strong energy management programs and achieved significantmdasheven breakthroughmdashimprovements in energy efficiency Despite the evidence of these successes an alarming number of US companies do not have formal nor effective energy management programs and practices in place Mastering the fundamentals of energy management both drives efficiency improvements and ensures the smart procurement of energy

Increasing energy efficiency within business operations is the first step toward reducing ENERGY STARreg GUIDELINES

energy-related risks Indeed the best hedge FOR ENERGY MANAGEMENT

against future energy price or availability risks is simply to not need as much in the first place Companies that manage energy well understand clearly their current and future energy requirements and are in a good position to negotiate energy purchases Further companies that use energy efficiently are less exposed to volatility and price increases On the supply side companies need to integrate energy procurement programs and supply strategies within the overall energy strategy to manage volatility and to secure the best prices New supply solutionsmdashincluding heat recovery renewable energy possibilities and combined heat and powermdashshould be fully evaluated and re-evaluated against likely changes in regulatory structures energy prices and potential climate-change penalties or incentives

See wwwenergystargov

Building an energy efficiency culture is exactly what the Chief Executive Officer and his Senior Vice President Operations of California Portland Cement did Recognizing the value a corporate-wide energy strategy could provide for the business they empowered the company to move forward in instituting a comprehensive energy management system that encompasses all operations ldquoWe did this by deliberately making energy management part of our core business by creating a corporate function for energy and by viewing energy as a profit center for our businessrdquo explains CEO Jim Repman


Merck amp Co has made energy efficiency a priority Early in 2006 Merck CEO Richard T Clark issued a call to action to all employees to do their part in making the company a leader in energy conservation in the pharmaceutical industry by reducing energy intensity by 25 percent by the end of 2008 Since then the Merck Global Energy Team has been empowered to embark on aggressive initiatives to increase accountability for energy use inform and engage employees and upgrade facilities These efforts have paid off with a 94 percent decrease in energy intensity in 2006 alone at the companys US facilities Says Larry Naldi Senior Vice President Science and Technology Merck views energy management as an opportunity to become leaner and more competitive Leadership that emanates from the top strong goals empowered employees and a long-term strategy all combine to help us determine our energy future

Second Take Both a Longer and a Broader View While energy efficiency and a structured approach to procurement are key first steps all companiesmdashnot just those in so-called energy-intensive businessesmdashmust develop strategies that move beyond the basic beginning foundation Executives involved in this project suggested that company leadership should shift the way energy is viewed Today it is often seen as a fixed cost for the business as a whole rather than as a component of production or service Valuing energy in terms of corporate productivity including tracking the companyrsquos energy productivity index (the amount of energy used to create a product or deliver a service) enables an organization to place energy on equal footing with labor material capital and other operational expenses The strategic conversation then shifts from ldquoHow much energy can be savedrdquo to ldquoHow much energy is really neededrdquo

Energy productivity is an important measure of Toyotarsquos energy future and is embodied in the companyrsquos leading principle ldquoUse only what you need when you need it in the amount neededrdquo There is strong evidence that Toyota uses significantly less energy to produce a car relative to most of its global competitors a significant aspect when put in the context of the tens of millions of vehicles it makes each year ldquoTransforming the discussion about energy from lsquoWhat can we saversquo to lsquoWhat is actually requiredrsquo has enabled a majority of Toyotarsquos manufacturing plants in the US to be among the most energy-efficient in the nation with many earning the coveted ENERGY STARreg for their energy performancerdquo explains Josephine S Cooper Group Vice President Government and Industry Affairs Toyota Motor North America

The Longer View Most initial energy savings come from low-cost investments and no-cost operational improvements As these opportunities are exhausted further energy savings require ongoing capital investment Corporations have typically perceived energy projects as nonshystrategic As a result they require energy projects to meet high hurdle rates or quick payback periods In these circumstances energy efficiency investments do not receive funding when competing for capital more obviously associated with the needs of the business and are not undertaken or even discouraged


Viewed over the longer term however energy projects carry some of the more attractive returns and lowest risk New energy-efficient equipment if installed and commissioned properly will provide a sustained and predictable return on investment Executives who balance the amount of risk involved in bringing new products to market with the nearly certain return delivered by an energy project can ensure a base rate of return across their portfolio of investments Indeed executives managing for the long-term will even create policies that look beyond projects with higher initial costs in exchange for assured returns over a longer period of time They recognize that capital investments that reduce energy consumption and greenhouse gas emissions have strategic long-term value and competitive advantage And this advantage grows every time energy prices increase

Some examples of policies in use by proactive companies that have discovered the long-term value of energy projects include lower hurdle rates for energy projects use of lifecycle cost analysis regular budget allocations for energy projects risk adjusted rates of return and incorporating real or hypothetical monetary values for potential carbon reductions Some companies also allocate targeted pools of capital specifically aimed at energy efficiency and reliability projects

Owens Corning pursues energy efficiency within company operations and also through product offerings to customers Using a long-term investment horizon is key to both ldquoOver the past 14 years our commitment to energy efficiency has resulted in a 40 percent reduction in the energy intensity of our operations While we use less energy today we are now focused on achieving additional energy-reduction targets by 2012 Further our strategic commitment to energy efficiency within our operations is supported by attractive returns from these worthwhile investmentsrdquo says Mike Thaman Chairman and Chief Financial Officer at Owens Corning ldquoOur products themselves are an ongoing commitment to energy efficiency Because homes and buildings consume 40 percent of our nations energy and account for 43 percent of the countrys greenhouse gas emissions adding more insulation to new and existing homes and buildings in the US represents one of the single largestmdashand most cost effectivemdashopportunities to seize this opportunityrdquo

Moving beyond reactive management to proactive engagement has been key for HSBC to begin tackling its own contributions to climate change We consider climate change to be the single biggest environmental challenge this century says John Beckinghausen Director of Sustainable Development amp Operations HSBC Bank USA Energy is a necessity for any business to operate Our challenge as it should be for all companies across the US and around the globe is to use it efficiently and sparingly We currently have a six-sigma project underway to implement energy efficiency projectsmdash all at aggressive payback ratesmdashwith the goal of reducing energy use by 7 percent in 2007 Replacing the use of brown power to operate our facilities with clean renewable energy is another of our priorities and currently stands at 35 percent of our total energy demand Renewables make up one of the key components of our carbon neutral program which we began operating in 2005


Energy Value Chain

The Broader View Expanding the energy management horizon to include all energy required to make and use the product or service by both suppliers and customers means seeing the entire Energy Value Chain As products and services move along this chainmdashwhich includes extraction manufacturing conversion transportation operating selling and disposing of all goods and servicesmdashenergy inputs are added The sum of these energy inputs in the product or service at any given point in the value chain is the ldquoEmbedded Energyrdquo

Embedded Energy and the Energy Value Chain are concepts that can be Upstream Internal Downstream used to explore and evaluate business Inputs Operations Outputs

decisions and opportunities more Efficiency Energy efficiency Product recycling and enforcement repurposing

Energy as lsquolensrsquo for Reduced embedded growth amp opportunity Product and service

redesign

fully They provide a more holistic analysis of energy impacts on a business energy

New approaches to energy diversification they also require an understanding and risk management

awareness and accounting of all energy New technologies

impacts including those upstream from Product and service lifecycle energy requirements

(inputs) internal to (operations) and Supplier Internal Customer

downstream from (outputs) the company Engagement Strategies Implementation Strategies Engagement Strategies

Many companies are already examining their Energy Value Chain to identify opportunities to work with suppliers and customers to improve overall productivity By doing so these companies are better positioning themselves to succeed in the face of future uncertainties surrounding energy markets as well as discovering new opportunities in the present They also develop much greater business intimacy with suppliers and customers in turn opening up new and unexpected opportunities for collaboration

PepsiCorsquos corporate energy strategy encompasses the entire energy value chain Looking ldquoupstreamrdquo to reduce the embedded energy of inputs to its business PepsiCo works with its suppliers to establish energy reduction goals demonstrate energy management activities and join the companies active in the US EPArsquos ENERGY STARreg network of corporate partners The company also has an active media campaign ldquodownstreamrdquo to educate consumers about small steps they can take to live better such as purchasing green energy credits

Third Search Out Business Transformation Opportunities There are also companies in which energy management reaches deep into the core business and informs and shapes long-range business decisions Energy is viewed and understood as a strategic issue valued as a measure of productivity and given a broader level of attention in the corporation Company leaders see energy as a lever for positive growth and change within the business not simply as feedstock to a product facilitator of a service or cost to manage Such an approach looks beyond the obvious immediate energy needed to make a product or to provide a service and considers all energy impacts on the business In these companies concepts such as ldquoEmbedded Energyrdquo and ldquoEnergy Productivityrdquo are used to explore and evaluate business opportunities and all strategic decisions


This ldquonext generationrdquo energy management means taking a more strategic view of the total cost and opportunity of energy productivity Fundamental energy management practices are in place and institutionalized Executives at all levels are involved in energy management Energy managers are empowered to execute initiatives with manpower funding and executive support and involvement Operational and financial innovations are in use such as risk hedging to maximize future flexibility and ldquomaneuvering roomrdquo for a company Operations are redesigned to take advantage of more than cost savings Cooperative ldquoopen sourcerdquo approaches to innovation improvements and information are shared across industries and geographies How products and services are offered is evaluated and potentially redesigned Energy awareness is marketed to customers and consumers alike And business models are reinvented to be resilient across a variety of energy futures

PPG believes the energy future is uncertain This concern along with a recognition that greenhouse gas concentrations are rising has helped the company to solidify its strategic planning in regard to energy scarcity and climate change Vicki Holt Senior Vice President Glass and Fiber Glass explains ldquoIn addition to controlling energy use and greenhouse gas emissions in our own operations we see PPGrsquos position as a provider of energy solutions that help the broader community to do the samerdquo In accord with this position and among other energy conserving solutions for a variety of industries PPG developed a new low-emissivity window glass Solarban 70XL which has the potential to significantly reduce the energy requirements for cooling buildings

The Dow Chemical Company is thinking outside the box when it comes to propylene glycol production Propylene glycol a vegetable-oil-based raw material is traditionally produced from petrochemical feedstock The company will use breakthrough technology to manufacture it from glycerin generated during the manufacture of biodiesel Dow refers to the new product as propylene glycol renewable or PGR because the glycerin raw material is created as a by-product when vegetable and seed oils such as soybean sunflower and canola are transesterified into the blend of methyl esters known as biodiesel Using PGR will enable customers to exercise their commitment to technologies that consume less fossil fuel and other finite resources says Mady Bricco Dows global product director for propylene oxide and propylene glycol lsquoDow Plans Propylene Glycol From Renewable Feedstockrsquo Chemical amp Engineering News American Chemical Society Vol 85 No 13 March 26 2007

Responding to rising energy bills and heightened consumer awareness about the cost of heating wash water Procter amp Gamble invented Tide Cold Watermdasha laundry detergent that cleans as effectively in cold water as any warm-water detergent Innovation is at the heart of Procter amp Gamble and we are regarded as one of the most innovative companies in the world explains Dr Len Sauers Director Environmental Science That innovation applies as much to our work in environmental sustainability as it does for Procter amp Gamble brands and other business functions For example a tremendous amount of energy is used to heat water for the machine laundering of clothes If all consumers lowered their wash temperatures to cold the US could save up to 3 of total household energy which would eliminate 34 million tons of CO2 per yearmdash6 percent of the US target under Kyoto


Fourth Prepare Contingent Strategies With the robust approaches outlined above US companies will be better positioned to successfully and flexibly maneuver through any of the possible futures described earlier There are also of course contingent strategies that will work particularly well in specific scenarios Some examples of actions that a corporation might take as the conditions of a particular scenario emerge are listed in the following table The degree to which a given corporation embraces these will be balanced by the companyrsquos desire to take full advantage of those conditions (See Appendix Energy Value Chain)

The Same Road

The Long Road

The Broken Road

The Fast Road

Scenario-Contingent Strategies

Evaluate the full lifecycle energy cost of products and services to find competitive savings and advantages

Aggressively pursue energy efficiency and creative procurement management in tandem with product and service quality

Become early adopters of proven renewable and heat recovery technologies and find ways to integrate them into operations

Encourage and be an early adopter of climate management best practices in all markets where your company operates

Develop partnerships with key vendors and customers with a systemic approach to manage overall energy costs

Establish positions in new energy technologies that will become investment opportunities over the long term

Be in a long trading position stockpile or otherwise hedge key energy resources vital to continuing operations

Do early research on methods to drastically reduce the carbon footprint of all operations and dramatically increase energy efficiency

Consider marketing carbon reducing technologies learned in operations to others across the same or related industries

Anticipate market opportunities as market conditions become difficult

Prepare to create and participate in new methods and types of market transactions to limit the carbon footprint of all operations

Find ways to engage the suppliers and final consumers in energy usage throughout the lifecycle of your products and services

Connect brand identity with energy and climate management activities to establish competitive advantages in the market

Proactively seek global best-practice management approaches technologies and partnerships


Finally Take Personal Action Thinking scenarically might seem too big picture and far away Yet that is precisely the pointmdash to seriously explore the future with its many uncertainties so that we can make better decisions in the present Then we must act accordingly

Corporate leaders can take a number of actions today for tomorrow All of these actions can be taken by individuals all can have significant organizational impact and all add up to becoming energy aware (just as successful business are already cost aware) These actions listed on the back cover of this report are organized into four categories managing energy strategically within your business bringing strategic energy management to corporate Boards (both yours and others) influencing your industry to become more strategically energy aware and connecting strategic energy management with company strategy goals and programs

Any of these actions will make energy management more strategic and all of them will bring more company success across a range of futures

ldquoTo create strategic maneuvering room with respect to energy corporate leaders need to move today not the day after tomorrowrdquo



Appendix Scenario Comparison Tables

Summary of Key Elements

The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

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cros

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ese

futu

res


Implications for Energy Value Chain

UpstreamInputs Internal Operations DownstreamOutputs

Robust across Scenarios

Action Analyze all corporate inputs

and the energy required to this point

Analyze energy needs for all operations amp facilities

Anticipate future energy needs and sources

Analyze energy requirements of products and services

Opporshytunity

Work with or require suppliers to reduce embedded energy in their outputs

Develop and refine energy program to comprehensively manage efficiency procurement R amp D etc

Consider energy impacts of products amp services

Look for new business directions

Potential Outcomes

Reduce energy in products and services feeding into operations

Reconsider how business is done Consider reengineering production

and service processes Institute comprehensive energy

management system

Reengineer products to require less energy

Develop new business lines to capitalize on changing energy environment

Contingent upon Scenarios

The Same Road

Manage upstream energy use to buffer price volatility

Build systemic relationships with suppliers

Push international best practices on a global basis

Think total cost of ownership Evaluate life-cycle cost of product

portfolio Find ways to do energy efficiency

without sacrificing product quality or costs

Build systemic partnerships with vendors and customers

Improve marketing strategy to communicate energy efficiency

The Long Road

Squeeze suppliers to meet tougher requirements

Focus on cost-cutting and energy efficiency out of economic necessity

Work to meet difficult organizational problems in technology change out

Do only those changes which have clear cost-cutting benefits

The Broken Road

Implement integrated supply chain management

Assess energy footprint of partners

Manage peak power use Create actual dollar cost systems

for monitoring Assess new investments for

carbon impact Move to carbon neutral designs

Reflect cost of disposal in price of products

Label energy intensity of products

Coordinate across industries to reduce energy use

The Fast Road

Evaluate energy supplies and hedging opportunities

Review opportunities to shift commodity inputs to less energy intensive ones

Figure out optimum mixes of inputs on energy basis

Integrate supply chain into climate management system

Set internal energy stretch goals Improve tracking and monitoring

systems Integrate energy into enterprise

risk management Benchmark energy intensity

across industries Inventory and account greenhouse

gas emissions Include climate and energy risk in

investor reports

Assess lifecycle costs Build for lifecycle recycling Reduce packaging Restrict dumping Raise tipping fees Assess brand value energy

intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments

US EPA ENERGY STARreg

Through its ENERGY STARreg Program (wwwenergystargov) US EPA works with US businesses to promote the efficient use of energy through corporate energy strategy development As part of a comprehensive corporate energy strategy energy efficiency is a powerful step forward for US businesses as they prepare for the energy future US EPA is grateful to the companies who shared their time and thinking on this project

Participating Companies California Portland Cement HSBC PepsiCo Frito-Lay Cascade Engineering Jones Lang LaSalle PPG CEMEX Merck amp Co Procter amp Gamble Dow Chemical Mercury Marine Shell NA Eastman Chemical Mittal Steel Toyota NA Genentech National Starch amp Chemical UPS General Motors Owens Corning

Content Experts During the scenario creation phase a number of content experts participated to cover the areas of energy technology oil commodity markets corporate strategy and regulation and policy Their perspectives ensured a rich basis for discussion Elizabeth Dutrow and Walt Tunnessen of EPArsquos ENERGY STARreg Program provided particularly helpful introductions and guidance Garforth International contributed their unique insights throughout this project

Global Business Network Founded in 1987 and a member of the Monitor Group since 2000 GBN (wwwgbncom) specializes in helping organizations adapt and compete more effectively and more responsibly in the face of mounting uncertaintymdashwhether itrsquos uncertainty about their future the future of their industry or the future of the world at large A pioneer in the application and evolution of scenario thinking GBNrsquos consulting and training services focus on strategy decision-making innovation visioning and alignment and organizational and leadership development The principal authors of this GBN report are Erik Smith Gerald Harris and Peter Schwartz Contributors include Michael Ovadia and Bertram Chan

The Monitor Group Monitor Group (wwwmonitorcom) has 28 offices worldwide and offers a portfolio of strategic consulting services to clients who seek to grow top-line revenue shareholder value and individual and organizational capabilities The firm works with the worldrsquos foremost business experts and thought leaders to help major multinational companies governments and philanthropic institutions develop specialized capabilities in areas including competitive strategy marketing and pricing strategy innovation national and regional economic competitiveness nonshyprofit management technologye-business organizational design and development and scenario planning Monitor Grouprsquos separate merchant banking division consists of investment funds (both venture capital and private equity) as well as an MampA advisory service


infogbncom

Energy To-Do List

Of one thing we can be sure energy will be more challenging and more important in the future Will you and your business be ready

What Executives Senior Managers and Board Members Can Do

Manage energy actively from your position

Empower energy staff to fulfill the fundamentals

Push for strong energy efficiency from all parts of the business

Enable energy investments by valuing them differently from other projects

Educate customers on the value of energy performance in products

Involve yourself

Make strategic energy management a Board-level issue

Are you a member of the Board of another corporation

Can you influence the corporation to examine its energy and climate strategy

Is the corporation practicing strategic energy management

Influence your industry

Do you participate in industry associations

Can you initiate and lead discussions among your industry counterparts on why strategic energy management is important

Use scenario thinking in your ongoing strategic discussions

Wind-tunnel your current energy and climate strategy in these scenarios

Connect energy and climate strategy with broader company programs goals and strategies

For more information please contact

Global Business Network a member of the Monitor Group wwwgbncom 101 Market Street Suite 1000 bull San Francisco CA 94105 bull (415) 932-5400

ENERGY STARreg Program wwwenergystargov energystrategyenergystargov US EPA bull 1200 Pennsylvania Avenue NW bull Washington DC 20460 bull (888) 782-7937


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Agency (US EPA) and its ENERGY STARreg Program supported this effort We encourage readers to use and

share the content of this report with the understanding that it is the intellectual property of Global Business

Network and US EPA ENERGY STARreg and that full attribution is required

101 Market Street Suite 1000 bull San Francisco CA 94105 bull Telephone (415) 932-5400 bull Fax (415) 932-5401

wwwgbncom


Table of Contents

Executive Summary 2

Introduction 4



















Notes 31

Acknowledgments 33



Executive Summary












any of these roads















Introduction










PROJECT SUMMARY











































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Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








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 ESP 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Table of Contents

Executive Summary 2

Introduction 4



















Notes 31

Acknowledgments 33



Executive Summary












any of these roads















Introduction










PROJECT SUMMARY











































Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today




T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

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cien

tific

stu

dies

abo

ut

hum

an-in

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imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

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chno

logy

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cien

tific

stu

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indi

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th

at h

uman

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clim

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cele

rate

s na

tura

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thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

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ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

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sens

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nally

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the

US

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mor

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gula

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re

late

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How

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rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















Executive Summary












any of these roads















Introduction










PROJECT SUMMARY











































Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today




T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself


























Introduction










PROJECT SUMMARY











































Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today




T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

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l est

ablis

hed

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rns

al

ong

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pwar

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nd

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erie

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ikes

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nerg

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ices

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ishe

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rge

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pike

s

E

nerg

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ices

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l est

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patte

rns

until

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ever

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pply

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ock

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gs

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eced

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ices

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ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

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cien

tific

stu

dies

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ut

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d cl

imat

e ch

ange

are

ste

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de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

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em

erge

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US

for

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er re

gula

tions

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rol c

arbo

n em

issi

ons

Af

ter s

eein

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obal

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mpe

titor

srsquo im

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s

polit

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sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

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trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

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clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

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ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

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ons

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gyM

anag

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t

How

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our

busi

ness

prep

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E

nerg

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anag

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mai

ns a

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to-lo

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tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

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nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








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Involve yourself



















PROJECT SUMMARY











































Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today




T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself




















































Cha

nges

in G

loba

l Eco

nom

ic P

atte

rns Today




T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















T

iftser

In

Cha

nges

in G

lc

eOil

Supp

lySh

ocks

and

Stag

flatio

n Bo

oms

and

Bust

s Co

ld W

arEn

ds a

nd

Tech

nolo

gyHe

ats

Up

The

Deca

deof

Un

crta

inty

Begi

nshellip






oda y


obal

Eco

nom

i P

atte

rns

THE BROKEN ROAD

THE FAST ROAD

THE SAME ROAD

THE LONG ROAD

Loos






Scenario Thinking

1970

1980

1990

2000

2007

2020

























Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself







































Today





















Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
























Today
















Today
















































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


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Notes


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Notes


Acknowledgments








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Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself

























































































Energy Value Chain





redesign

















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself






















The Same Road

The Long Road

The Broken Road

The Fast Road

























The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

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stor

ical

ly in

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rializ

ed

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ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

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glo

bal

expa

nsio

n in

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velo

ping

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ts a

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andi

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arke

ts

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ere

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shi

ft in

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onom

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ower

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ard

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lopi

ng n

atio

ns a

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pr

oves

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rupt

ive

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ultim

atel

y un

sust

aina

ble

S

ome

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oric

ally

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dust

rializ

ed n

atio

ns a

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d in

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cess

ions

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al e

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ves

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mus

t adj

ust t

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idat

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hifts

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ctur

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neve

n w

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oric

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tions

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gglin

g th

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de a

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arke

t gy

ratio

ns

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isto

rical

ly in

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rializ

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ns b

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loba

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ion

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g w

orld

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al ri

sks

A

mod

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ift in

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ard

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atio

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aten

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rupt

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stor

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nat

ions

Th

e U

S i

n pa

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n in

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duct

s an

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rvic

es in

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xpan

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mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

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sup

plie

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key

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ergy

fuel

s co

ntin

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flo

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t lev

els

that

mai

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orld

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row

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isru

ptio

n

Tr

aditi

onal

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plie

s of

key

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ergy

fuel

s ar

e su

bjec

t to

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e di

srup

tion

pol

itica

l co

nflic

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insu

ffici

ent

inve

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ent t

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prov

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Tr

aditi

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ergy

fuel

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ut

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ery

ver

y hi

gh p

rices

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onal

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plie

s of

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ergy

fuel

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e m

aint

aine

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iabl

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bstit

utes

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line

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gyPr

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l est

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nerg

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d to

leve

ls h

igh

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gh

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inve

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n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

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inue

s

Th

e w

ar o

n te

rror

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ot

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loba

l pol

itica

l ch

alle

nges

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tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

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e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

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min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

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cate

th

at h

uman

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ate

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ge is

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inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

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ugh

grow

th in

ove

rall

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e sl

owly

im

prov

ing

tech

nolo

gy

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cien

tific

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dies

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ate

chan

ge is

ac

cent

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g th

e na

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rces

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redu

cing

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im

prov

ing

ener

gy u

se

take

s pl

ace

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e em

erge

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ew

tech

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gies

take

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nger

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ut

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pol

itici

ans

th

us s

low

ing

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y ch

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ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

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pact

s

polit

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sens

us fi

nally

em

erge

s in

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US

for

mor

e st

ringe

nt re

gula

tions

re

late

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con

trolli

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carb

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sion

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llow

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nsen

sus

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ges

very

la

te fo

r tig

hter

and

mor

eef

fect

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cont

rol o

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s

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polit

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con

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ges

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e U

S

for t

ight

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ntiv

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den

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ns re

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gyM

anag

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How

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our

busi

ness

prep

arin

g

E

nerg

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anag

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mai

ns a

mid

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to-lo

wer

tie

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cern

with

in th

e up

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anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

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ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

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nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

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ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

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nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

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per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


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The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

US

En

ergy

Envi

ronm

ent

A

com

bina

tion

of p

oliti

cal

iner

tia a

nd c

ontin

ued

glob

al e

cono

mic

gro

wth

ke

eps

the

US

ene

rgy

envi

ronm

ent i

n w

ell

reco

gniz

ed te

rrito

ry

A

com

bina

tion

of ra

pidl

y sh

iftin

g po

litic

alco

nditi

ons

alo

ng w

ith

boom

s an

d bu

sts

in g

loba

l ec

onom

ic g

row

th p

ush

the

US

thr

ough

a lo

ng

hard

tran

sitio

n si

mila

r to

the

1970

s

A

com

bina

tion

of p

oliti

cal

inde

cisi

on a

nd u

neve

n gl

obal

eco

nom

ic g

row

th

dela

y an

y si

gnifi

cant

shi

fts

until

wea

ther

-rela

ted

and

geo-

polit

ical

eve

nts

brin

g a

brea

k w

ith th

e pa

st

A

com

bina

tion

of e

arly

po

litic

al le

ader

ship

co

nsen

sus

and

effe

ctiv

e gl

obal

eco

nom

icm

anag

emen

t shi

ft th

e U

S

ener

gy e

nviro

nmen

t int

o a

new

terri

tory

of i

nnov

atio

n

Glo

bal

Econ

omic

Dev

elop

men

ts

Th

ere

is a

ste

ady

shift

in

econ

omic

pow

er to

war

d de

velo

ping

nat

ions

at a

sl

ow e

noug

h pa

ce th

at

does

not

thre

aten

hi

stor

ical

ly in

dust

rializ

ed

natio

ns

Tr

aditi

onal

ly in

dust

rializ

edna

tions

ben

efit

from

glo

bal

expa

nsio

n in

to th

e de

velo

ping

wor

ld a

s th

ey

sell

mor

e pr

oduc

ts a

nd

serv

ices

into

exp

andi

ngm

arke

ts

Th

ere

is a

real

shi

ft in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns a

nd it

pr

oves

dis

rupt

ive

but

ultim

atel

y un

sust

aina

ble

S

ome

hist

oric

ally

in

dust

rializ

ed n

atio

ns a

re

pulle

d in

to re

cess

ions

as

glob

al e

xpan

sion

pro

ves

unev

en a

nd m

any

sect

ors

mus

t adj

ust t

o ne

w m

arke

t re

aliti

es th

roug

hdo

wns

izin

g an

dco

nsol

idat

ion

S

hifts

in e

cono

mic

pow

er

to d

evel

opin

g na

tions

are

fra

ctur

ed a

nd u

neve

n w

ith

hist

oric

ally

indu

stria

lized

na

tions

stru

gglin

g th

roug

h tra

de a

nd m

arke

t gy

ratio

ns

H

isto

rical

ly in

dust

rializ

ed

natio

ns b

enef

it fro

m g

loba

l ex

pans

ion

into

the

indu

stria

lly d

evel

opin

g w

orld

but

of c

ours

e no

t w

ithou

t fin

anci

al ri

sks

A

mod

erat

e sh

ift in

ec

onom

ic p

ower

tow

ard

deve

lopi

ng n

atio

ns d

oes

not

thre

aten

nor

dis

rupt

th

e hi

stor

ical

ly

indu

stria

lized

nat

ions

Th

e U

S i

n pa

rticu

lar

bene

fits

from

the

glob

al

expa

nsio

n in

to th

e in

dust

rially

dev

elop

ing

wor

ld a

s it

sells

mor

e hi

ghte

chno

logy

pro

duct

s an

d se

rvic

es in

to e

xpan

ding

mar

kets

Ener

gyC

omm

odity

Supp

lies

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue to

flo

w a

t lev

els

that

mai

ntai

nw

orld

eco

nom

ic g

row

th

with

out d

isru

ptio

n

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e su

bjec

t to

mor

e di

srup

tion

pol

itica

l co

nflic

t and

insu

ffici

ent

inve

stm

ent t

o im

prov

e

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s co

ntin

ue b

ut

at v

ery

ver

y hi

gh p

rices

Tr

aditi

onal

sup

plie

s of

key

en

ergy

fuel

s ar

e m

aint

aine

d a

nd v

iabl

e su

bstit

utes

beg

in to

com

eon

line

Ener

gyPr

ices

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

al

ong

an u

pwar

d tre

nd

with

a s

erie

s of

pric

e sp

ikes

E

nerg

y pr

ices

fluc

tuat

e ou

tsid

e es

tabl

ishe

d pa

ttern

s w

ith la

rge

and

sudd

en s

pike

s

E

nerg

y pr

ices

fluc

tuat

e in

wel

l est

ablis

hed

patte

rns

until

a s

ever

e su

pply

sh

ock

brin

gs

unpr

eced

ente

d pr

ices

and

re

al lo

ng-te

rm c

once

rns

E

nerg

y pr

ices

rise

ste

adily

an

d to

leve

ls h

igh

enou

gh

that

inve

stm

ent i

n al

tern

ativ

es p

ays

off


The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















The

Sam

e R

oad

The

Lon

g R

oad

The

Bro

ken

Roa

d T

he F

ast R

oad

Inte

rnat

iona

l Po

litic

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

con

tain

ed

thro

ugh

a bl

end

of fo

rce

ne

gotia

tion

and

le

ader

ship

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

rem

ain

sign

ifica

nt to

Wes

tern

le

ader

ship

as

use

of fo

rce

cont

inue

s

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

con

tinue

to

drai

n th

e U

S a

nd d

istra

ct

it fro

m d

omes

tic is

sues

Th

e w

ar o

n te

rror

and

ot

her g

loba

l pol

itica

l ch

alle

nges

are

met

th

roug

h ne

gotia

tion

le

ader

ship

and

min

imal

fo

rce

Perc

eptio

n of

Clim

ate

Cha

nge

an

d A

dvan

ces

in

Ener

gyTe

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

a m

inor

fa

ctor

com

pare

d to

nat

ural

fo

rces

and

ada

ptat

ion

take

s pl

ace

thro

ugh

grow

th in

ove

rall

wea

lth

with

som

e sl

owly

im

prov

ing

tech

nolo

gy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

ge is

ac

cent

uatin

g th

e na

tura

lfo

rces

but

redu

cing

and

im

prov

ing

ener

gy u

se

take

s pl

ace

slow

ly a

s th

e em

erge

nce

of n

ew

tech

nolo

gies

take

s lo

nger

S

cien

tific

stu

dies

abo

ut

hum

an-in

duce

d cl

imat

e ch

ange

are

ste

adily

de

bate

d by

pol

itici

ans

th

us s

low

ing

polic

y ch

ange

and

inve

stm

ent i

n ne

w te

chno

logy

S

cien

tific

stu

dies

indi

cate

th

at h

uman

-indu

ced

clim

ate

chan

geda

nger

ousl

y ac

cele

rate

s na

tura

l cyc

les

thus

spur

ring

fast

er p

olic

y ch

ange

s th

at e

ncou

rage

in

vest

men

ts in

new

tech

nolo

gy in

nova

tion

US

Pol

itics

and

Reg

ulat

ions

abou

t Car

bon

Dio

xide

N

o po

litic

al c

onse

nsus

em

erge

s in

the

US

for

tight

er re

gula

tions

to

cont

rol c

arbo

n em

issi

ons

Af

ter s

eein

g gl

obal

co

mpe

titor

srsquo im

pact

s

polit

ical

con

sens

us fi

nally

em

erge

s in

the

US

for

mor

e st

ringe

nt re

gula

tions

re

late

d to

con

trolli

ng

carb

on e

mis

sion

s

Fo

llow

ing

a se

rious

sup

ply

shoc

k du

e to

a d

isas

ter

linke

d to

clim

ate

chan

ge

a na

tiona

l pol

itica

l co

nsen

sus

emer

ges

very

la

te fo

r tig

hter

and

mor

eef

fect

ive

cont

rol o

f car

bon

emis

sion

s

A

polit

ical

con

sens

us

emer

ges

early

in th

e U

S

for t

ight

but

ince

ntiv

e-la

den

regu

latio

ns re

late

d to

con

trolli

ng c

arbo

nem

issi

ons

Ener

gyM

anag

emen

t

How

is y

our

busi

ness

prep

arin

g

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

with

in th

e up

per r

anks

of U

S

com

pani

es a

lthou

gh

CE

Os

of th

e la

rges

ten

ergy

use

rs p

ay it

the

mos

t atte

ntio

n

E

nerg

y m

anag

emen

t ga

ins

impo

rtanc

e fo

r man

y U

S c

ompa

nies

prim

arily

in

the

cont

ext o

f in

tern

atio

nal c

ompe

titio

n an

d un

certa

in g

eo-p

oliti

cal

cond

ition

s

E

nerg

y m

anag

emen

t re

mai

ns a

mid

dle-

to-lo

wer

tie

r con

cern

for u

pper

ra

nks

of U

S c

ompa

nies

un

til la

te p

olic

y sh

ifts

whe

n co

mpa

nies

mus

tw

ork

to c

atch

up

with

glob

al c

ompe

titor

s

E

nerg

y m

anag

emen

t ta

kes

a pl

ace

of p

riorit

y in

th

e up

per r

anks

of U

S

com

pany

man

agem

ent

both

to k

eep

up w

ith fa

st

chan

ges

and

to fi

nd n

ew

grow

th o

ppor

tuni

ties

Wha

t is

your

com

pany

rsquos e

nerg

y st

rate

gy a

cros

s th

ese

futu

res










Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
























Opporshytunity





Potential Outcomes




management system




The Same Road









The Long Road





The Broken Road









The Fast Road










investor reports


intensity


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________

Notes


Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















Acknowledgments








infogbncom

Energy To-Do List








Involve yourself
















infogbncom

Energy To-Do List








Involve yourself
















Energy Strategy for the Road Ahead

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Transcript of Energy Strategy for the Road Ahead