Tom Petrie is vice chairman of Merrill Lynch. He was named to the post after the brokerage in October agreed to acquire Petrie Parkman, the energy-related investment banking and capital market advisory firm he co-founded.
Petrie and CNBC’s Sue Herera discuss the future of energy, in cnbc.com’s exclusive series looking at the year ahead.
Oil prices are down from their historic highs – but don’t expect that to last. By the close of the decade, I wouldn’t be surprised if” oil hovered at “$85 to $95, or even the Goldman Sachs version of $105” per barrel.
And don’t look to corn-based ethanol as a panacea. Petrie says its “real role” is fleeting, due to the U.S.' limited production capabilities. Thus, big energy providers are already working hard to develop “alternative resources”; until those prove feasible to power the U.S. economy, big players must continue to seek “unconventional supplies” of oil, in punishing terrains like the far Arctic and deeper waters offshore.
Petrie bases his vision on an extended cycle stemming from “geopolitical events,” including the “challenges” of the Middle East. He declares it will take “the balance of this decade and much of the next … to work through this cycle.” Complicating the picture is the rise of “resource nationalism” and a “major realignment” among energy-producing countries. He cautions that “traditional enemies” -- Russia, China, Iran and Pakistan -- are creating surprising new alliances.