Basin Electric directors regularly bring in subject matter experts to learn more about current trends in the energy industry. In January, Raad Alkadiri, managing director of Energy, Climate, and Resources for Eurasia Group, spoke to directors about volatility and disruption in the energy markets.
“We anticipate another year where markets will be buffeted by geopolitics and by a host of geopolitical events,” Alkadiri said. He said there is good news though. Manufacturing numbers in Europe suggest a milder recession than previously thought, while the U.S. is holding its own economically. Alkadiri said energy prices may start to drop, along with inflationary pressures; however, there’s an uncertain picture in terms of inflation. The fallout from the war in Ukraine has had an impact on global development, and there’s no reason to think things will be different this year. “The conclusion is that the energy crunch that we saw in 2022 is likely to continue into 2023," he said.
Alkadiri also discussed emerging markets and the shift away from oil and gas and into climate and corporate issues. “There’s no clarity in terms of how the emerging markets are going to deal with pressures for both climate adaptation and climate mitigation,” he said. On top of the issue of energy availability and price, there is also the issue in the longer term of the expectations and demand that are being made of emerging markets in terms of their energy transitions.
He said the debate over who is responsible and who should take the financial burden becomes complicated at a time of economic weakness and downturn. “We don’t have a particularly good alignment of planets right now to start to ease some of the pressure of emerging market development, and again it’s something that creates geopolitical uncertainty directly into the markets,” Alkadiri said.
