Guest Editor's Note

Sustainability is the looming question that 2007 is bequeathing to 2008: Can the economic growth occurring in Asia be sustained, and built on? Or will its burden on world energy supply, and/or the environment, become unsustainable, collapse, and lead instead to worldwide recession?

That's the message from the Platts' senior editors in Insight's Global Energy Outlook for 2008. The sheer size of Asian economies, with their attendant energy demand and wealth creation, are changing underlying supply-demand patterns. By autumn 2007, record prices were being set daily in internationally traded oil, coal, steel and freight, leaving market participants questioning whether the markets were in a new and dangerous bubble or were shifting to a new global paradigm.

If 2007's price volatility is a bubble, world economies can expect it to burst—not without some damage—and prices to fall back nearer historic levels. But if it's a new paradigm, created by the increasing competition for resources from Asia's billions, higher prices will not go away. Rather, they will force fundamental, and probably painful, changes in the developed world as energy becomes scarcer and more expensive. Price volatility will accelerate as industries and populations suffer dislocations while energy price shocks are absorbed across economies.

Either way, energy choices all affect the globe's environment. Nations representing half the world's population are raising living standards, and their energy choices can easily overwhelm those made in the developed world. Nurturing and dispersing technology that allows nations to meet their legitimate aspirations without irreversibly harming everyone's environment may be as important a challenge in 2008 as finding new energy resources.

Margaret L. Ryan Editorial Director, Platts Global Nuclear & Coal

Margaret L. Ryan