Opening speaker Sam Henry, President and CEO, Suez Energy North America, Inc., summed up the current climate for traders and the bankers, accountants and others who are ancillary to their industry, all in attendance: “What a difference a year makes.”
In contrast to last year, commodity prices and domestic product growth rates have sunk to historically low levels in the midst of an economic upheaval. “It’s gone from a peak to a trough in about nine months,” said Henry, whose company is a leading oil producer and the third largest producer of biofuels in the U.S.
Henry said commodity traders face a range of dilemmas in the face of the economic meltdown. Reduced liquidity, shortened trading horizons, and uncertainty as government leaders hash out the details of projected regulatory changes, as well as the structuring of emerging markets, are all creating a climate of concern, Henry said.
George Baker, Principal of Williams & Jensen and an expert on the federal energy trading environment in Washington, D.C., spoke about the current political landscape and its impact.
“The energy trading plate is very full and laden with uncertainty,” Baker said. “Congress is looking for someone to blame. Speculation and OTC traders are the usual suspects.”
Baker also noted that a large influx of new Congressional members means more education on the complex subject of energy trading needs to take place. He urged those in attendance to speak up about their industry.
“Play the game,” Baker said. “Don’t be victims. You have ways of communicating your views. Explain what your business is.”
“We have relied on Wall Street to carry the news to Washington,” Henry said, echoing Baker’s opinion. “We are going to have to become more active, to make sure our voice is heard.”
Presented by The University of Houston Global Energy Management Institute (UH – GEMI), The March 19 conference was held in the Elizabeth Rockwell Pavilion of the M. D. Anderson Library at UH. It drew more than 150 participants and included talks by other high profile experts in the energy sector: Dr. Robert Levin, Managing Director of Energy Research & Product Development, CME Group, Inc.; Mark Stultz, Vice President of Policy Management for NA Gas & Power, BP; Andrew Stultz, Vice President Policy Management, NA Gas & Power, BP; and Jeffrey Sprecher, CEO, Intercontinental Exchange Holdings Inc.
By Julie Bonnin