Insight Magazine: Looking ahead to 2019

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Editor’s note from Mark Pengelly

In an increasingly fast-paced industry, the end of the year still offers time for reflection. What do this year’s events mean for commodities markets, and what will be the key themes to watch in 2019? In our lead article, Martin Fraenkel, president of S&P Global Platts, seeks to provide some answers (see page 8).

Perhaps unsurprisingly, several of those answers are closely related to politics – a force that has reasserted itself dramatically in commodities markets this year.

Shortly before Insight went to press, viewers across the world were closely watching
the results of November’s US midterm elections – the first major electoral test for the administration of President Donald Trump. The results amounted to a score-draw, with opposition Democrats forming a majority in the US House of Representatives and Republicans retaining control of the Senate.

Beyond the headline numbers, voters in some US states made decisions on a number
of significant ballot measures, including proposals to limit oil and gas exploration, levy carbon and gasoline taxes and deregulate power markets. Our analysis of some of the most interesting results starts on page 18.

The resurgence of politics isn’t limited to the US. As a direct result of political intervention, European carbon prices have soared in the past 12 months – a spike that will have lasting effects on the energy sector and carbon-intensive industries (see page 24). And on page 32, Stuart Elliott notes that economics now often takes a back-seat to politics when it comes to decisions regarding Europe’s gas market. He concludes it may well take a change in global politics before economics resumes its role as the main driver of energy markets.

Another theme looming large for 2019 is technology. This issue is replete with examples of how technology is changing the business – from the most efficient, cutting-edge LNG vessels to the strategic opportunity of geospatial data, the development of power-to-gas technology and small-scale nuclear generation. This wouldn’t be complete without a mention of electric vehicles; the degree to which lithium-ion battery technology is set to affect the worlds of energy, transport and metals is touched upon by S&P Global Platts Analytics on page 54.

Then there’s blockchain. Even blockchain’s biggest cheerleaders admit the technology was somewhat overhyped in its early years. However, its promise is real – as can be seen from the way it is increasingly being put to work across commodities. By bringing greater transparency, ease and speed to processes previously dominated by phones and paper trails, blockchain has the power to lower barriers to entry and forge more efficient markets (see page 62).

This issue also contains details of the winners of this year’s S&P Global Platts Global Energy Awards. This includes our inaugural Energy Transition Award, developed to recognize the leadership of power companies in the transition to a low-carbon economy. The finalists for this category were determined by our colleagues at Trucost, part of S&P Global, and you can discover more about the rationale behind their decision on page 91.

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