Subscribe to our free, weekly email newsletter!


New energy resources must be explored says API

Analysts also agree that key to any economic rebound will be the price of fuel
By Patrick Burnson, Executive Editor
December 03, 2010

The nation’s supply chain may be at risk if new sources of energy are not tapped in the near future, said the American Petroleum Institute (API).

According to API’s President and CEO Jack Gerard, the Obama Administration’s position of domestic offshore drilling is untenable and risky.

“This reversal on new lease sales off America’s coasts comes on top of a de facto moratorium, which has all but stopped new drilling in the Gulf of Mexico.”

Gerard also warned that the administration’s decision could result in the loss of American jobs, billions less in government revenues and an increasing dependence on foreign energy sources.

Analysts also agree that key to any economic rebound will be the price of fuel. Derik Andreoli, an energy analyst and doctoral candidate at the University of Washington, said there is deep uncertainty in how energy for power, heat, and mobility will be sourced, and how it will be paid for.

“The potential consequences of failing to plan for the unfolding energy paradigm could be catastrophic,” he said.

At the same time, said Andreoli, shippers must address energy-related risks to supply chains and the increasing vulnerability of just-in-time models reliant energy constantly available throughout the supply chain.

“On my radar, the hot topic at the current moment is China’s diesel shortage and how an increase in demand for diesel imports will impact prices through the rest of the year and into 2011,” he said. “It is unclear whether the diesel shortage will reverse in the spring.”

What we do know, said Andreoli, is that refined oil stocks of China’s two largest oil companies have fallen for eight consecutive months and diesel stocks fell by double digits in December alone.

Analysts also expect that the crude and diesel markets will remain volatile, because the recession and the temporary drop in the price of crude caused some investments to be put on hold.

“Crude production peaked in 2006, and net oil exports declined for a variety of reason between 2005 and 2009,” said Andreoli. At the same time, consumption is rising in China.”

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

When an industry is changing rapidly, companies must adapt in order to survive. In this whitepaper, a global publisher was seeking a partner that could mitigate risk and build a platform flexible enough for their shifting customer expectations. The solution enabled the company to rewrite their operations game plan and transform their supply chain.

Global trade management technology provider Amber Road (formerly known as Management Dynamics) said this week it has acquired ecVision, a cloud-based provider of global sourcing and collaborative supply chain solutions.

While it is already reaping myriad benefits from ORION (On-Road Integrated Optimization and Navigation), a proprietary routing platform for its drivers rolled out in late 2013, transportation and logistics bellwether UPS announced big plans for the technology this week.

Diesel prices continued their recent stretch of gains with a 3.6 cent increase this week to $2.936 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

TSA has reaffirmed its March 9 general rate increase (GRI) of $600 per 40-foot container (FEU) for all shipments, and lines have also filed a previously announced April 9 GRI in the same amount.

Article Topics

News · Supply Chain · Exports · China · Imports · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA