News & Events

Thank you, Jim, for that kind introduction. As I understand it, the goal of the Baker Institute here at Rice is to expand the bridge between the world of ideas and the world of action. There are few who have over the years joined those worlds as successfully as you have.

As economic policymakers understandably focus on the impact of the tragedy of September 11 and the further weakening of the economy that followed those events, it is essential that we do not lose sight of the policies needed to ensure long-term economic growth. One of the most important objectives of those policies should be an assured availability of energy. That imperative has, if anything, been elevated by the heightened tensions in the Middle East--an area that harbors twothirds of the world's proven oil reserves. It is one you doubtless know well, since I am told the Baker Institute is engaged in a series of major research projects on energy supply and security issues.

This evening I would like first to review our recent experiences with prospective imbalances in energy supply and demand and the importance of market prices in resolving those imbalances. Then I plan to focus on the extraordinary role played by technology in augmenting potential energy supplies, particularly of oil and gas.

Technology alone is unlikely to restore the United States to the position of price leader, which characterized our role in world oil markets for most of the industry's first century. We, presumably, will never return as the overwhelmingly dominant world producer.