During the next three years, global economies will recover, energy prices will be increasingly volatile and the security of oil and gas supplies will be a big concern, according to energy industry executives who attended Andersen's annual energy symposium in Houston recently. "Most oil and gas and electric-power company executives believe we are entering a new world of energy where industry fundamentals and structures are changing," says Victor Burk, managing partner of Andersen's energy and utility practice. "During the next three years, industry and consumers can expect lower, but more volatile, prices; increased consolidation and restructuring among companies; higher industry spending to find and deliver energy; and a significant impact from new technologies." The accounting and management-consulting firm conducted the survey during the conference. Sixty-one percent of those who responded believe global oil demand growth during the next three years will exceed the 1.2% average experienced from 1990-2000. Also, 74% say global gas demand growth will exceed the 2% average of the same period. "This implies an expectation that economies in many countries will recover from the current recession relatively early in the next three-year period, with a resulting increase in demand growth," Burk says. Ninety percent of the respondents expressed increased security concerns related to oil supplies. Similar surveys conducted by Andersen in mid-October in London and Buenos Aires produced almost the same results. Burk says the reasons behind the concerns are pretty clear. "We can probably associate these security concerns with worries about spreading tension in the Middle East, with talk of potential action against Iraq, and with the growing conflict between Israel and Palestine." Only 17% of the respondents believe the average price of oil during the coming three years will exceed the year-to-date averages for West Texas Intermediate ($26.64 per barrel) and Brent ($24.98 per barrel). Sixty-two percent believe oil-price volatility will increase. A majority of respondents-58%-believe global capital spending for exploration and development will increase in the next three years beyond that of 1999-2001. And 79% believe spending outside North America will grow faster than inside North America. Only 39% believe capital will be more available in the coming three years than during 2001. Why would companies predict higher capital spending in a period of increased security concerns, lower oil prices, higher price volatility and lower capital availability? The answer could be confidence in technology, Burk says. "Eighty percent of survey respondents believe technology advances will deliver improved success and lower costs." -Jodi Wetuski