As the November election nears in the United States, energy remains on the list of hot topics on the national—and global—political agenda. Questions abound: Why are today’s oil prices so high? What about alternative fuel sources? How should energy policies evolve?
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All are tough issues—with no easy answers. To provide perspective on the ongoing energy debate, Edward Glab, co-director of Florida International University’s Energy Business Forum, offers some insights into what really is happening with energy today.
The laws of supply and demand govern oil prices.
He notes that the law of supply and demand in the global marketplace determines the price of oil—just as it does for steel, cement, copper, corn, or any other commodity.
“Rapid economic growth around the world—particularly in India and China—is driving up energy demands, with oil prices rising accordingly,” Glab said. “Historically, energy and economic growth move in lockstep—and that’s what is happening now.”
Glab sees a confluence of factors that prevent the oil and gas industry from producing what needs to be taken out of the ground to meet rising demand. He points out that political and legislative obstacles in the United States as well as in Mexico, Venezuela, and Russia are limiting the development of new oil and gas resources and, in some cases, making it difficult for foreign investors to fund oil and gas exploration.
Alternative fuels should be part of the solution.
Developing a portfolio of different energy sources provides the optimal way to solve the current energy crisis, in his view.
“We need to invest in a variety of alternative energy sources—solar, wind, nuclear, biofuels, hydrogen, and hydrocarbons—to enable us to move forward and continue to enjoy the same lifestyle,” he said.
Glab hopes to see research and development in other areas, too, such as the creation of a more efficient internal combustion engine. He also believes that there is “room for improvement” for the energy policies in the United States.
“Today, the U.S. energy policy too often reflects vested interests,” he said. “We need an energy policy that is based more on science. We should focus on alternative forms of energy while opening drilling areas now off limits to the oil and gas sector.”
According to him, “Ultimately, there is no panacea, no single energy resource that can meet growing global demand. We need to think long and hard about what we can do in many areas to decrease our dependence on hydrocarbons—and we need to support the long-term investments needed to develop new, diversified energy sources.”