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Page added on January 29, 2009

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Energy chiefs debate the cost of energy

DAVOS, Switzerland (Reuters) – Energy leaders at the World Economic Forum debated the true cost of fuel on Thursday as they grappled with the implications of world recession and how to navigate out of it.

Record-high oil prices close to $150 a barrel in July last year added to the pain of economic slowdown, and now much cheaper prices of near $40 a barrel could help the global economy to rally.

But for consumers, producers and the planet, oil at that level could be too cheap as it slows investment in new supplies of fossil fuel as well as in alternative energy.

Saudi Arabia, the world’s leading oil exporter, said late last year $75 was a fair price for crude — at the top end of the $60-$80 a barrel many in the industry consider a desirable level.

“That seems to be what you need to get investment,” BP Chief Executive Tony Hayward on Thursday told the forum in Davos, with reference to the $60-$80 range.

Reuters



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