Energy markets will be strongly influenced by world economic and political changes. In the past decade many countries have moved towards market liberalization and privatization of State-owned industries, in some cases associated with the installation of democratic regimes in place of authoritarian ones. It is uncertain to what extent these movements will achieve long-term success and take on a global character. Two energy scenarios are proposed in consequence. In 'New Frontiers', high economic growth leads to a sustained rapid increase in energy demand, especially in developing countries. This is largely supplied by oil and gas and coal, for which resources are believed to be adequate, but depend on political stability and increasingly complex technology for their supply. All energy forms are in demand including renewables. Environmental concerns are resolved through market instruments, leading to decreases in global energy intensity. In ‘Barricades’, on the other hand, demand growth is much lower and localized, some countries and regions being more successful than others. Environmental problems are resolved by government regulation, and global warming concerns lead to some revival of nuclear power. ‘New Frontiers’ is a success story for the developing nations; in ‘Barricades’ they scarcely improve their position compared to today.


The global energy scenarios described in this paper have been developed to help Shell managers in their business planning. They are not forecasts of the future. Instead they tell what I hope will prove to be two interesting, challenging and very different stories about the energy future, mainly about the next thirty years, but with some thoughts extending even further into the future.

The purpose of the scenarios is to draw managers away from thinking about the future in terms of extrapolation of present trends. The energy history of the past century has been punctuated by surprises, discontinuities and sudden changes, none of which could have been predicted by extrapolation. Scenarios help us to better understand these seachanges, by providing deeper interpretations of today's events, and of the underlying forces which will shape the future. They are intended to challenge and change managers' perceptions of the world ('mental maps'), deeply rooted as these often are.

Figure 1 is one of a long series of maps which show that the early explorers were convinced that California was an island. We now know that they were wrong, but their belief was a persistent one which no doubt led some of them to make travel plans which were inappropriate. Similarly, in the mid 1980s very few oil industry people were prepared for the 1986 oil p

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