On Monday, June 20, Dr. Michelle Michot Foss, Chief Economist and Head of the Bureau of Economic Geology’s Center for Energy Economics, The University of Texas at Austin, was welcomed as a speaker at the 125^th GRIPS Forum, where she talked about “Global Views on Energy.” There was also a discussion about the perspective we need to adopt when thinking about global energy markets.

Dr. Foss’ lecture was not a venue for simply forecasting the price of oil and other energy resources, or for reviewing international trends concerning energy or analyzing government policies. Instead, Dr. Foss got to the heart of energy-related issues by focusing on the biological and psychological aspects of the humans who consume and produce energy. She posed the question as to the true nature of the factors that exert an influence on the process by which people respond to, understand and think about the things in our world. Taking this view, Dr. Foss provided the assembled audience with a new perspective on a key point that demands understanding when formulating policies.

International trading in energy comprises physical markets for energy resources, production volume and the like on the one hand, as well as financial markets where people deal in derivatives and trading volume. What we most need to understand about prices and government restrictions in financial markets, not just in energy, is the concerns of the general public. For example, Dr. Foss emphasized that a price does not fluctuate all by itself, but rather it is affected by how people respond to the price.

As exemplified by peak oil, energy policy is an attempt to construct a paradigm for that era, but a paradigm is always accompanied by limitations. The primary causes are said to be the quality and availability of data for predicting social trends, but according to Dr. Foss, we are not placing importance on the presence of the general public, which is always a major factor moving society. When they purchase energy, energy consumers do not think about things like the amount of electricity they use, the kind of electricity, fees and so on. The thoughts they have are things like wanting to boot up a computer to play a videogame, or wondering whether there will be enough oil to keep running a factory. Furthermore, Dr. Foss says one must have advance knowledge of the general public’s predispositions in order to have a deep understanding about human beings as consumers of energy for economic benefits. While humans understand truth, we are also predisposed to creating fiction. In addition, we tend to agree with information that seems to prove or validate our beliefs, while denying information advocating an opposing view. Moreover, we worry excessively and exclusively about the risks posed by major events like disasters more than we fret over everyday dangers.

This understanding of the general public has been put to use in setting prices and in politics. For example, when you decide to make a purchase that you think is your own decision, the price level you decide to buy at is actually decided in advance according to somebody’s prediction. Dr. Foss described this as “arbitrary coherence.” In politics as well, governments design information so as to induce people to take the desired action.

In international energy, real crude oil prices are often lower than those predicted by experts, and those predictions continue to miss the mark. There are many factors that affect energy prices. For example, they reflect such things as effects on the environment, safety and stability. Additionally, technological advances have a major influence. The oil industry is seeing new paths and possibilities due to developments like the ability to visualize the Earth in a 4-D image, which will allow us to estimate what lies under the ground.

Dr. Foss said that what is truly important when considering energy from an international perspective is not whether we’ll have enough resources like oil and natural gas or how we are going to supply them. Rather, she argued that we need to get people thinking about what we should do in order to secure the global energy sources we need. This is why she encouraged the people assembled at the hall to understand how the general public tends to respond, as she addressed earlier, and to think about what kinds of messages we should send them.

Article by Public Relations

On Monday, June 20, Dr. Michelle Michot Foss, Chief Economist and Head of the Bureau of Economic Geology’s Center for Energy Economics, The University of Texas at Austin, was welcomed as a speaker at the 125^th GRIPS Forum, where she talked about “Global Views on Energy.” There was also a discussion about the perspective we need to adopt when thinking about global energy markets.

Dr. Foss’ lecture was not a venue for simply forecasting the price of oil and other energy resources, or for reviewing international trends concerning energy or analyzing government policies. Instead, Dr. Foss got to the heart of energy-related issues by focusing on the biological and psychological aspects of the humans who consume and produce energy. She posed the question as to the true nature of the factors that exert an influence on the process by which people respond to, understand and think about the things in our world. Taking this view, Dr. Foss provided the assembled audience with a new perspective on a key point that demands understanding when formulating policies.

International trading in energy comprises physical markets for energy resources, production volume and the like on the one hand, as well as financial markets where people deal in derivatives and trading volume. What we most need to understand about prices and government restrictions in financial markets, not just in energy, is the concerns of the general public. For example, Dr. Foss emphasized that a price does not fluctuate all by itself, but rather it is affected by how people respond to the price.

As exemplified by peak oil, energy policy is an attempt to construct a paradigm for that era, but a paradigm is always accompanied by limitations. The primary causes are said to be the quality and availability of data for predicting social trends, but according to Dr. Foss, we are not placing importance on the presence of the general public, which is always a major factor moving society. When they purchase energy, energy consumers do not think about things like the amount of electricity they use, the kind of electricity, fees and so on. The thoughts they have are things like wanting to boot up a computer to play a videogame, or wondering whether there will be enough oil to keep running a factory. Furthermore, Dr. Foss says one must have advance knowledge of the general public’s predispositions in order to have a deep understanding about human beings as consumers of energy for economic benefits. While humans understand truth, we are also predisposed to creating fiction. In addition, we tend to agree with information that seems to prove or validate our beliefs, while denying information advocating an opposing view. Moreover, we worry excessively and exclusively about the risks posed by major events like disasters more than we fret over everyday dangers.

This understanding of the general public has been put to use in setting prices and in politics. For example, when you decide to make a purchase that you think is your own decision, the price level you decide to buy at is actually decided in advance according to somebody’s prediction. Dr. Foss described this as “arbitrary coherence.” In politics as well, governments design information so as to induce people to take the desired action.

In international energy, real crude oil prices are often lower than those predicted by experts, and those predictions continue to miss the mark. There are many factors that affect energy prices. For example, they reflect such things as effects on the environment, safety and stability. Additionally, technological advances have a major influence. The oil industry is seeing new paths and possibilities due to developments like the ability to visualize the Earth in a 4-D image, which will allow us to estimate what lies under the ground.

Dr. Foss said that what is truly important when considering energy from an international perspective is not whether we’ll have enough resources like oil and natural gas or how we are going to supply them. Rather, she argued that we need to get people thinking about what we should do in order to secure the global energy sources we need. This is why she encouraged the people assembled at the hall to understand how the general public tends to respond, as she addressed earlier, and to think about what kinds of messages we should send them.

Article by Public Relations