Energy industry and the capital market
This study develops the possible funding needs of the domestic energy industries through 1990 and projects a possible parallel development of the U.S. capital. The total capital needs of the energy industry through 1990 are estimated to be about $790 billion. Of this amount some $423 billion are likely to be generated internally, while $367 billion will be raised externally. The total availability in the capital markets from 1975 through 1990 will probably reach $1685 billion. On this basis the energy industry will require only 21.7 percent of that supply. From the early 1960s on there is a gradual increase in yearly dedications of capital to energy, reflecting the underlying movement toward a more electric-oriented economy that is fundamentally less efficient. It is also indicative of our moving away from cheaper sources of energy as they are depleted and into other long-range supplies that are even more capital-intensive. Of major importance to these conclusions, however, is the problem of whether the energy industry can command its historic share of capital. This study only indicates that the market will be capable of supplying the required funding. The ability of industry to obtain its share of the market is dependent on industry's attractiveness to the investing groups that compose that market. At the present time the Federal government, and many state and local governments, are promoting policies, laws, and regulations that impede the ability of the energy industry to generate enough profits to be attractive in the capital markets. If this punitive attitude is maintained, the present stress in our energy structure will turn into an overwhelming crisis as industry strangles under the resulting curtailment of its supply of capital. (MCW)
- Research Organization:
- Bankers Trust Co., New York
- OSTI ID:
- 7274366
- Journal Information:
- Annu. Rev. Energy; (United States), Journal Name: Annu. Rev. Energy; (United States) Vol. 1; ISSN AREDD
- Country of Publication:
- United States
- Language:
- English
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