Conference reports Agency Executive Director Dr Ulf Lantzke that from the mid-1980s onwards, the oil market is likely to move gradually towards a basic dis- equilibrium as growing world oil demand matches stagnating produc- tion. In particular, oil output in North America, the North Sea and the Soviet Union is projected to level off or decline. He added that OPEC produc- tion could well be constrained by declining reserves in some countries and by political decisions in others. Time to invest Summarizing the views of participants, conference Chairman Michael Kohn said that world business should use the breathing space offered by the present softness in the energy market to step up capital investment directed towards energy saving. He believed that the world energy equilibrium remains fragile and vulnerable to shocks, and that the underlying long-term situation has not basically changed. He suggested that businessmen and governments alike should adopt a long- term view and not give undue weight to very recent events, since it is likely that oil prices will increase in the long run, whatever the shorter term price fluctuations. Dr Herbert Giersch, President of the Kiel World Economic Institute, des- cribed his 'personal hunch' that there would be a slight upward trend in oil prices, with superimposed cycles. These price cycles would follow the short and weak economic upswings and the pronounced recessions that the world was likely to experience in a phase of slow growth or stagnation. Inventory cycle Professor Colin Robinson of Surrey University said he expected no repeti- tion of the huge real increases in oil prices experienced in the 1970s, but thought that even if we are able to exclude big jumps, in the prices of oil, we cannot expect that the market will be smooth. Professor Robinson added that there would probably be sharp market changes both upwards and downwards, according to what he called an 'inventory cycle'. These changes might be triggered by scarcity, induced either by a revolution in an oil exporting country, a spurt in economic growth, a cold winter or, perhaps, a combination of all three. In the result- ing scramble for supplies, consumers would try to increase inventories, thus building up demand. However, rising prices and revenues for the oil producing countries would have the effect of depressing industrial output in consumer countries, particularly if revenues went into savings. Consumers would therefore draw down inven- tories, demand would fall, and with it prices as producers worried by falling revenues started to compete for market shares. Professor Robinson suggested that, under the assumption that the present recession ends before long, we can expect some gradual increase in oil prices over the following 10 years, of perhaps 1%, 2% or 3% per annum in real terms, which will be apparent in retrospect, but will not be particularly noticeable at the time due to fluctu- ations in the market. Discussing the immediate market situation after OPEC's failure to reach agreement on a plan to prop up oil prices by curbing production, Dr Lantzke said he expected no imminent collapse in the price of oil, since this was not in the interest of the major producers. He thought that in the cur- rent situation a modest reduction in oil prices would seem reasonable, with some assurance of a substantial period of price stability in nominal terms. This was perhaps an optimistic view. Certainly, most participants endorsed the hope that such a situation would accrue, but the conference spent a long time discussing the implications for long-term investment planning of energy uncertainties. Flexible planning Professor Robinson said that, although it seemed probable that the biggest oil price increases and the major supply upsets were now behind us, it was likely that business would face yet more uncertainties emanating from fuel markets. He believed that old-style business planning, using single number forecasts and rigid strategies, would be abandoned, and thought that no one now needed any convincing that planning should be much more flexible than it had been in many companies in the 1960s and early 1970s. Lionel Walsh Director of Public Information International Chamber of Commerce Paris Renewables becalmed British Association for the Advancement of Science Symposium, 'Renewable energy resources', London, 18 May 1983 The programme for this symposium proclaimed the intention to arrive at a consensus on the contribution that can be anticipated from renewable energy resources over the next 30 years. This did seem a little ambitious for a one- day conference. In his general intro- duction, Professor Ian Fells highlighted the difficulties by examining recent projections giving the renewables a share of betwen 5% and 60% of UK energy supply 50 years hence. He then addressed what we all knew to be the central concern nowadays- money. What additional useful results would be obtained, he asked the assembled researchers, if the 1982 UK renewables research budget of £15 million were to be say, trebled? The next seven hours produced no answer, possibly because it is difficult to imagine yourself speed- ing along a motorway when you have just become accustomed to sitting in a traffic jam. Ftmding The Department of Energy's chief scientist, Dr Challis, revealed how sharply the brakes have been applied. Government funding for renewables development increased by over 50% in 282 ENERGY POLICY September 1983