2010 Energy Conference: Short-Term Stresses,
Long-Term Change

The Energy Information Administration (EIA) and the Johns Hopkins University School of Advanced International Studies jointly hosted EIA's annual energy conference on April 6-7, which was attended by over 800 participants from a wide range of academic, government, non-government, industry, and other organizations. Energy Secretary Steven Chu opened the conference, emphasizing America's role in past technological advances as well as future opportunities for the U.S. to lead a new industrial revolution by developing better ways to provide energy to the world. In addition to the plenary presentations and a luncheon speech by National Economic Council Director Lawrence Summers, the conference featured ten panel discussions on topics encompassing:

  • the economic recovery and its impact on energy
  • climate change policy
  • drivers of short-term energy prices
  • regulating energy commodities
  • the dynamic outlooks for natural gas and biofuels
  • tracking gains in energy efficiency
  • Smart Grid investment and impacts
  • and the nexus of energy and water.
  • For example, the Short-Term Energy Prices - What Drivers Matter Most? panel focused on the role of physical supply and demand relative to the role of financial factors in the rapid increase and subsequent decline in oil prices seen during the 2007 to 2008 period, a key issue also addressed by EIA through its Energy and Financial Markets Initiative. The panel, which included David M. Arseneau (Federal Reserve Board), Guy F. Caruso (Center for Strategic and International Studies and former EIA Administrator), Christopher Ellsworth (Federal Energy Regulatory Commission), and Edward L. Morse (Credit Suisse), featured a thorough discussion of the challenges involved in explaining 2008 price variations, and in sorting out competing views of those fluctuations.

    Participants emphasized the need for more and better data and research into these issues, and noted the increased importance of financial factors in price determination. Panelists were united in the assessment that physical supply and demand factors alone did not fully account for the price movements under review, while some noted that certain other factors exhibited unusual behavior at that time. For example, Ed Morse noted that exchange rates showed an inverse correlation with price changes not seen consistently before or since that period, and Guy Caruso agreed with his view. More than one speaker indicated the need to identify the mechanisms through which non-physical factors directly influence energy prices in order to fully understand what happened in 2008. EIA intends to bring more insight to these issues through its Energy and Financial Markets Initiative.

    Conference materials (including presentations, video, and audio podcasts) are available on the EIA website.

    U.S. Average Gasoline and Diesel Prices Move Up Again

    The U.S. average price for regular gasoline increased three cents to $2.86 per gallon, $0.81 above last year at this time. Prices rose in all major regions of the country, with the increases ranging from two cents to four cents per gallon. The averages on the East Coast, the Gulf Coast, and in the Rocky Mountains each increased nearly four cents to $2.83 per gallon, $2.75 per gallon, and $2.86 per gallon, respectively. At $2.83 per gallon, the average in the Midwest showed an increase of three cents. Moving up two cents to $3.06 per gallon, the smallest regional increase took place on the West Coast. The average in California inched up nearly a penny to $3.10 per gallon.

    The U.S. average price for diesel fuel increased over a nickel to $3.07 per gallon, $0.84 cents above the price last year at this time. Prices rose in all major regions of the country, with the increases ranging from about four cents to more than seven cents per gallon. The average on the East Coast increased by a nickel to $3.08 per gallon, while the Gulf Coast price rose four and a half cents to $3.02 per gallon. Rising to $3.05 per gallon, the increase in the Midwest amounted to almost six cents per gallon. The smallest increase, of nearly four cents, took place in the Rocky Mountains where the average settled at $3.08 per gallon. On the West Coast and in California, the prices jumped more than seven cents to $3.19 per gallon and $3.22 per gallon, respectively.

    Propane Inventories Rise

    Last week, total U.S. inventories of propane rose by 1.1 million barrels to end at 29.1 million barrels. The Midwest region led the gain with 0.8 million barrels, while the Gulf Coast region added 0.7 million barrels of propane stocks. The East Coast regional inventories fell by 0.4 million barrels and the Rocky Mountain/West Coast region drew slightly. Propylene non-fuel use inventories increased their share of total propane/propylene stocks from 8.4 percent to 8.5 percent.

    Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.