The Role of the Baker Institute Energy Forum

Since its founding in 1993, the James A. Baker III Institute for Public Policy of Rice University has become a leading institution advancing effective foreign and domestic policy. One of the hallmarks of the Institute's early years has been its independent research program on energy issues. Located in Houston, Texas, the energy capital of the world, the Baker Institute established the Energy Forum, a multifaceted center that promotes original, forward-looking discussion and research on the energy-related challenges facing our society in the 21st century.

The mission of the Energy Forum is to promote the development of informed and realistic public policy choices in the energy area by educating policy makers and the public about important trends—both regional and global—that shape the nature of global energy markets and influence the quantity and security of vital supplies needed to fuel world economic growth and prosperity. Research efforts focus on enhancing understanding of the complex political, cultural, religious, economic, and social forces that influence open access to energy resources and their equitable distribution.

Rather than centering exclusively on either the theory or practice of energy policy, Energy Forum research seeks to synthesize both by drawing together experts from academia, the energy industry, government, the media, and non-governmental organizations. Our extensive research generates studies and working papers that disseminate up-to-date information and fresh analysis on a wide range of topics, such as global and regional energy security, energy geopolitics, energy resource development, emerging energy technologies, science and technology policy, energy and economic growth, energy forecasting, energy and the environment, and energy sector regulation.

Through our major energy studies as well as workshops, seminars and lectures on a wide variety of topics such as global energy geopolitics, the politics of the Persian Gulf, OPEC, U.S. oil sanctions, alternative energy sources, energy and the environment, technological advances, and energy demand trends, the Baker Institute has established itself as the leading university-based think tank on energy geopolitics and policy. Outstanding scholars from around the world have contributed to Baker Institute energy programs, including researchers from Japan, China, Russia, South Korea, Britain, the Middle East, and Latin America.

Energy Forum studies, policy reports and working papers are posted on the Baker Institute’s Internet website, www.bakerinstitute.org and are distributed in printed copy to the Baker Institute mailing list of industry and government leaders. Baker Institute energy reports are widely quoted in major newspapers and periodicals in the U.S., such as the Wall Street Journal, the Washington Post, and the Financial Times, and are read by top government and energy industry leaders worldwide. Baker Institute energy specialists are invited to present new public policy ideas at international conferences and many other public forums sponsored by other universities and think tanks, the United Nations, and energy industry groups. Baker Institute scholars continue to publish working papers in a wide variety of academic and public policy journals.

Research and Publications

Drawing on Rice University's interdisciplinary expertise in environmental engineering, energy sustainability, economics, political science, history, geology, nanoscience, and anthropology, the Baker Institute Energy Forum has published several major studies on energy policy since its inception in 1996. Topics have included the political, social, and cultural trends in the Persian Gulf, Caspian Basin and Russia, the future energy needs of China, Japan, and Latin America, energy security, energy industry deregulation, emerging energy technologies, and U.S. energy policy. In 2002, Palgrave published the first book arising from Energy Forum studies, Energy in the Caspian Region: Present and Future, which, through a partnership with the Centre for Euro-Asian Studies at University of Reading, updated the Baker Institute’s comprehensive 1998 study on the political, economic, and cultural factors influencing energy development in central Asia and the Caucasus.

Partnering with Stanford University’s Program on Energy and Sustainable Development, the Energy Forum investigated the geopolitical consequences of the increasing global dependence on natural gas. In June 2006, Cambridge University Press published a book volume based on this study, "Natural Gas and Geopolitics from 1970 to 2040." The institute also investigates topics regarding the politics of oil and gas pipelines in the Middle East; fuel competition in the electricity sector; the future of North American natural gas markets; coastal cities; the link between poverty, energy, and society; greenhouse gas emissions, and gas hydrates. Baker Institute Energy scholars also contributed a chapter on "Reducing Vulnerability of Persian Gulf Oil" in the US Army War College volume on Coping with a Nuclear Ready Iran. The chapter, which assesses the risks to oil shipments in the Persian Gulf and outlines realistic options to bypass the Strait of Hormuz or minimize the chances of a disruption of shipments through this vital oil chokepoint, was presented to at major conference in Doha, Qatar in early 2006.

In May, 2003, the Energy Forum, in conjunction with the Richard E. Smalley Institute for Nanoscale Science and Technology, and the Environmental and Energy Systems Institute began a major initiative on the role nanotechnology will play in the development of clean, affordable energy, whose supply is sustainable and universally available. This nano and energy program has recently focused on the science and policy related to solar energy, electricity storage and transmission, and oil and gas drilling technologies. In 2006, the Energy Forum also initiated a science and policy program on the potential of biofuels.

Prior to the U.S. military campaign in Iraq, the Baker Institute, together with the Council on Foreign Relations, published an independent working group report on Guiding Principles for U.S. Post-Conflict Policy in Iraq, covering the issues and challenges related to the country’s reconstruction, including a detailed discussion of Iraq’s energy capabilities and prospects. In 2001, the Baker Institute also sponsored, again with the Council On Foreign Relations, a task force on U.S. strategic energy policy. The bi-partisan task force, which comprised 52 prominent Americans from government, industry, and academia, published a major study, Strategic Energy Policy: Challenges for the 21st Century, which offered 110 recommendations to the Cheney task force and U.S. Congress regarding steps to build a comprehensive energy policy and national consensus.

Expanding Research Areas

The Baker Institute seeks to expand the scope of its work in the energy area to respond to growing interest from policymakers and industry leadership.

The Baker Institute Energy Forum, together with the Japan Petroleum Energy Center (JPEC), released in March 2007 a comprehensive study on The Changing Role of National Oil Companies in International Energy Markets aimed at providing an effective framework to analyze the strategies, objectives and performance of NOCs. The NOC study consists of 13 case studies examining the history and formation of 15 different state-owned oil companies and two economic modeling studies aimed at assessing the operational efficiency of NOCs.

Overall study findings can be classified into six broad conclusions: NOCs have noncommercial objectives that differ greatly from those of the private international oil companies; NOCs’ noncommercial objectives tend to interfere with the firms’ ability to produce at a technically efficient level and to maximize the overall value that could theoretically be obtained from their oil resources impacting the NOCs ability to replace its reserves and expand its oil and gas production; Certain institutional structures for NOC organization and regulation help to clearly define the roles and responsibilities of management and can thereby minimize the commercial impact of noncommercial objectives on an NOC’s ability to focus efficiently on its core businesses; An increasing number of NOCs are financing activities through international capital markets, improving the NOCs’ compliance with international standards of corporate responsibility; NOCs are seeking opportunities to enhance vertical integration because downstream refining and marketing assets in key premium consuming markets are still largely disassociated from upstream NOC operations, thereby creating opportunities for IOC/NOC strategic alliances; The growing role of the NOCs in global oil markets has important policy implications for oil importing nations.

The Baker Institute Energy Forum, together with the Institute of Energy Economics, Japan (IEEJ), is currently embarked on a new major study on The Global Energy Market: Comprehensive Strategies to Meet Geopolitical and Financial Risks—The G8, Energy Security, and Global Climate Issues. The one-year study will be finalized in time for the G8 meeting scheduled to take place in Japan during July 2008. The study is part of the Baker Institute's longstanding research collaboration with key Japanese think tanks and university scholars.

The Global Energy Market study seeks to assess the geopolitical risks currently facing international energy markets and the global financial system; the study will examine a variety of scenarios for the future of global energy markets, focusing on factors that could trigger a regional or worldwide crisis. It also will investigate the consequences that such risks could pose to energy security, pricing and supply as well as to the transparent and smooth operation of the global market for oil trade and investment. The study aims to develop a series of policy frameworks that can be used to fortify the current market system and ensure that it can respond flexibly to the array of threats that might be encountered in the coming years. Researchers will develop policy recommendations to strengthen the stability of global energy and financial markets in order to withstand possible shocks and geopolitical threats; threat analyses will include: strategies related to enhancing diversification, alternative energy technologies, multilateral energy trade accords, emergency market procedures, and economic reform and privatization in the Middle East and Russia.