High energy prices are expected to continue into the summer, with both oil and natural gas prices at their current levels, if not slightly higher, according to David Dismukes, associate director of the LSU Center for Energy Studies. Dismukes addressed the Sunshine Rotary Club April 28.
Natural gas prices in excess of $7 per thousand cubic feet, and crude oil prices in excess of $50 per barrel, are very strong possibilities for the remainder of 2005, Dismukes said.
"Unlike past energy crises of the 1970s and early 1980s, today's current crisis is rooted in the basic economic fundamentals of supply and demand rather than in geopolitical issues," he said. "One of the more important driving factors of today's tight energy markets has been the phenomenal growth of energy demand by the developing world-particularly China."
Dismukes noted that forecasts conducted by the U.S. Department of Energy continue to predict high growth for developing countries at the same time world spare crude oil production capacity hits 30-year record lows.
One of the short- and intermediate-run realities of the changes in global energy markets is that the U.S. will become more sensitive to energy imports, he noted. Crude oil imports will continue to grow as a percent of overall consumption, and unlike past historic periods, natural gas imports will become increasingly important and rise from today's level, which is about one percent, to well over 10 percent by 2025.
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