(The opinions expressed here are those of the authors,
columnists for Reuters.)
By Jason Bordoff and Carlos Pascual
NEW YORK Dec 7 - The breakneck pace of change
in the energy sector is creating a challenge for energy leaders
not only in its scope but its speed. As technologies unlock new
resource opportunities and redefine relationships between
producers and consumers, geopolitical events are posing new
supply threats and difficult policy and investment decisions,
all against a backdrop of the growing need for action on climate
Successfully navigating such a complex landscape, whether in
government, non-profit or private sector, requires a vastly
different skill set than was needed not long ago.
A few decades ago, senior government officials were forced
to learn the details of nuclear weaponry such as throw weights
and ballistic trajectory to create sound policy at the height of
the Cold War. Now they must integrate finance, engineering,
science, foreign policy, and economics to spur action on climate
change or boost energy security. Think of the complex calculus
and understanding of the role of energy markets needed to inform
sanctions against Iran, react to Russian aggression against
Ukraine or respond to the threat from ISIS in Iraq.
Diplomats today must understand how shifts in global energy
demand affect actors outside the OECD, how diversification of
oil supplies can reduce geopolitical and market risks, and how
growing competition in global gas markets can be a source for
energy security. Moreover, a sophisticated understanding of
finance is necessary to effectively assess what forms of power
are competitive in national markets, how to design climate
policy, and navigate the complex geopolitics of climate
The oil and gas sector faces no less of a daunting task.
Change is afoot at the top of the oil and gas sector, with CEO
turnover from Statoil to BG to Shell to Total. It is no longer
adequate for CEOs and private sector decision makers to have
expertise that is solely geological and technical, or be
national champions focused on developing their own country's
resources. When contemplating investments today, multinational
companies must consider factors such as sanctions against Russia
and Iran; security and stability issues in areas from Nigeria to
Libya to Iraq; and cultivating markets and government relations
in growing economies like India, China and the ASEAN nations.
Even within areas such as Europe and the United States,
understanding issues such as popular opposition to nuclear power
or hydraulic fracturing is critical.
Successfully navigating these complex issues requires
geopolitical and cultural expertise. Today's oil and gas CEOs
must understand history and religion to develop insights into
the dispute between Baghdad and Erbil over Iraqi oil revenue, or
the potential to bring Eastern Mediterranean gas resources to
market. They must understand cultural and local norms to
evaluate the future of shale development from Colorado to France
to China's Tarim Basin, or the future of nuclear power in
Germany or Japan. They must understand politics to assess the
potential impact of climate policies or EU renewable targets.
The same breadth of skills, perspective, and experience will
be necessary for leaders in every other aspect of the energy
sector as well, from NGOs to finance to academia.
For a major university like ours, that means that training
the next generation of energy leaders requires not only geology,
engineering or mathematics, but geopolitics, history, and
anthropology. These new energy leaders are going to need to
combine a vastly broader toolkit to succeed in today's complex
geopolitical and economic environment.
This is a truly transformational moment in the world's
energy history, with new technologies unleashing vast new
sources of energy, geopolitical risks proliferating, business
models being upended, and the threat of climate change looming.
There has never been a more interesting, exciting or
consequential time to work in the energy sector, and the
diversity of talent, skills, and perspectives needed to
successfully meet tomorrow's challenges has never been greater.
(Jason Bordoff and Carlos Pascual are, respectively,
Founding Director and Fellow at Columbia University's Center on
Global Energy Policy. Mr Bordoff previously served as a White
House energy advisor to President Obama from 2009 to 2013. Mr
Pascual established and directed the State Department's Energy
Resources Bureau as Special Envoy and Coordinator for
International Energy Affairs from 2011 to 2014.)