Oil expert sees a pricey future

• By GARY PERILLOUX
• Advocate business writer
• Published: Mar 5, 2008 - Page: 1A

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Michael Economides, a diminutive but broad-shouldered Greek-American, strolls through a Hilton Capitol Center hallway, listening to an oil industry veteran complain about public ignorance of the real culprits behind high oil prices.

“What can we do?” Economides says, with a shrug of commiseration.

Actually, Economides is doing quite a bit.

Weekly, the University of Houston chemical engineering professor addresses crowds like the several hundred attending the Louisiana Oil and Gas Association’s annual meeting Tuesday in Baton Rouge, where he scoffed at the idea that consumers will curtail gasoline spending at $3 or $4 a gallon.

“What is the price at which people will walk away from the pump?” he asked.

“My answer is $7.50. We are not even close to that.”

Part-academician, part-entertainer and part-soothsayer, Economides has become one of the most influential energy consultants on the planet.

A 2000 book coauthored with Ronald Oligney, “The Color of Oil,” catapulted Economides to respect inside the Washington, D.C., beltway and to influence in corporate boardrooms.

As for culprits, Economides points readily to global consumption, with China’s energy demand representing “the single most important geopolitical pressure point for the next three decades.” In his estimation, world politics already exacts about a $45 premium on the price of a barrel of oil, and that influence shows no signs of waning.

Don Briggs, the Louisiana Oil and Gas Association president, said the group invited Economides for his knowledge of global energy strategy — Economides is producing successive books on Russia and China’s role in the industry — and Russia represents another boiling point in Economides’ view.

Outgoing Russian President Vladimir Putin has “re-Sovietized” that nation’s oil industry, creating a state of energy imperialism and a blatantly corrupt government, Economides said. Russia won’t be able to supply all the energy it has guaranteed to China and Europe, and the result could be Europeans paying natural gas prices of $20 per million BTUs, more than twice the current U.S. price.

“Russia is my biggest pet peeve against this current administration,” said Economides, who identified himself as a Democrat after his talk. “Russia is going to be a gargantuan leviathan in energy.”

Economides didn’t spare a fellow Democrat, Al Gore, for spreading what he called the “hoax” of global warming. And he blasted a Newsweek magazine story on the subject as “the vilest, most venomous piece of journalism” in U.S. history.