The third annual IHS Forum at IHS CERAWeek 2013, on Friday, the final day of the conference, focused on wider issues and threats that face the energy industry and society at large. Scott Key, President and COO of IHS, welcomed participants and introduced the Forum by expressing the IHS goal to understand global supply chains through the application of integration, analytics, and deep knowledge.

Nicholas Eberstadt, Henry Wendt Chair in Political Economy at American Enterprise Institute, told the audience that a revolution of dropping fertility rates is occurring the Muslim world, which has registered a 50% drop in the average fertility rate over the last generation. Mr. Eberstadt explained that the demographic profile is shifting because women are either postponing marriage or not getting married at all. This is happening among women who are at lower incomes and are generally less educated than typically associated with such declines. Mr. Eberstadt also described a peak and decline in the youth population in many Muslim countries, which he called a "youth-quake." The result may be fewer social uprisings such as the Arab Spring, he said, but it will also mean less "fresh blood" for generating economic development. Mr. Eberstadt to also discussed the problem of societies "getting old before getting rich," explaining that those nations will not be able to use a "pay-as-you-go" system. He mentioned migration as a potential solution to this issue-in Europe migration has helped to keep the overall population from aging too quickly.

Michael Dolan, Senior Vice President of Exxon Mobil Corporation spoke to a packed ballroom on "The Thirty Year Vision: The Technology Imperative." He began by noting the successes of the past that have led to the present, which he characterized as a "historic moment in the evolution of energy markets." Consumers have access to a very diverse energy portfolio encompassing deepwater resources, liquefied natural gas, unconventional oil and gas, oil sands, "high impact processes" such as cogeneration, and highly efficient technologies for energy use. He sees the greatest challenge of coming decades to be, How do we sustain and accelerate advances in energy technology?

Industry success in meeting global energy needs will depend on the ability to manage a number of risks, including geopolitical, economic, financial, geological, technology, and project risk. In addition, technology development must be encouraged and supported. Mr. Dolan stressed that innovation no longer comes from "the Thomas Edison working alone" but rather from teams within companies working together to develop new technologies.

The unconventional oil and gas revolution in the United States has been transformational, he concluded. Downstream, unconventional oil and gas is making the United States newly competitive in export markets for fuels and chemicals. Just a few years ago it was unimaginable that US fuel and chemical products would be able to compete in global markets, but "the supply curve has been turned upside down."

Frederick W. Smith, Chairman and CEO of FedEx Corporation, framed the story of FedEx as largely a story of regulation. Specifically, he cited a regulation promulgated in the 1970s that allowed the operation of airplanes below a certain size without requiring a government certificate. This regulation allowed FedEx to create a nationwide express system. Deregulation of air cargo, interstate trucking, and interstate transportation were also crucial to FedEx's success. He emphasized that deregulation has had an enormous impact on the energy industry and that many of the social benefits that exist today would not have been possible without deregulation.

Mr. Smith also remarked that rising fuel prices motivated FedEx to become more involved in the energy debate. In 2006, FedEx made three key recommendations to the energy industry going forward. The first recommendation was to maximize the production of oil and gas in the United States. Second, "use less of it." Mr. Smith cited increasing fuel efficiency standards as the right path. The third recommendation was to develop alternative power capabilities for transportation; at present 93% of transportation is powered by petroleum. Mr. Smith suggested that the United States should open offshore waters to gas and oil production and use the royalties to invest in alternative sources of energy. He argued that the biggest obstacle to investment is the tax code and asserted that a lower corporate tax rate would stimulate the economy. He also stated that the United States should deliver a more aggressive energy policy that would allow energy companies to maximize the production of oil and gas.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.