Environmental issues are changing the energy and utilities industry as never before, and their influence can only increase, according to a new white paper from Deloitte Middle East entitled "Middle East Energy and Resources, Managing Scarcity for the Future" whitepaper series. "Diversion Ahead", the new whitepaper, explores the challenges and trends emerging in the energy and resources sector. The need to reduce demand, increase supply diversity, promote energy efficiency and reduce carbon emissions is both desirable and necessary. "We will see a combination of various policy initiatives, mainly government-led, designed to achieve the objectives of energy efficiency and reduction of emissions," said Kenneth McKellar, Energy and Resources leader at Deloitte in the Middle East. "Interestingly, the public sector is adapting more quickly to this emerging landscape than the private sector. This can be attributed to the fact that they are faced with a growing youth demographic that is concerned about the type of world they will inherit." By contrast, although a number of companies may already have the technical expertise to lead the charge on environmental issues, their business case is not yet compelling enough for them to do so. In terms of promoting energy efficiency, there is likely to be an increasing focus in three specific areas: policy initiatives aimed at making consumers pay more towards the real cost of energy; major capital expenditure to create or modify buildings and facilities that are more energy-efficient; and minor capital expenditure aimed at consumers to improve measurement of energy usage, in turn enabling policy initiatives to be tuned more finely. In addition to looking at the issue of energy's relationship to the environment, the white paper also examines the wide-ranging challenges facing energy and utility executives and the trend of demergers within the industry which is expected to continue in the next 12 months. McKellar added that "the key driver behind this trend as well as consolidations, which we also expect to see, is diversification; companies will be looking to spread their portfolio risk while securing customers, resources, and markets. Although we are living in uncertain times, energy and utilities companies are more accustomed than most industries to managing uncertainty."
