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Wall Street Journal: Energy: Bracing for Crisis at Davos Forum

January 21, 2006; Page A2
Every year, more than 2,000 businesspeople, politicians, celebrities and journalists from around the world gather in the Swiss ski resort of Davos to network. The World Economic Forum — which charges chief executives $23,000 for an annual membership plus $18,000 a pop for tickets to the conference — picks a theme for them to talk about.
Most years, the participants then talk about something completely different.
The theme for this year's meeting, which begins next week, is “The Creative Imperative,” with a focus on doing business with China and India. The real buzz probably will center on energy security.
Much of the energy world is making the trek to Davos, including the head of the Organization of the Petroleum Exporting Countries, or OPEC, and top executives from Royal Dutch Shell PLC, BP PLC, Chevron Corp., Total SA, OAO Lukoil and Saudi Aramco. In mostly private sessions at the four-star Schweizerhof hotel, they'll be holding their own daylong mini-Davos on Thursday.
In one 3½-hour session, an energy-crisis simulation will posit that terrorist attacks cause oil prices to rise to more than $120 a barrel. Among those on hand to figure out the impact and how to respond will be oil and insurance CEOs, the head of the International Energy Agency and President Bush's international energy adviser, Faryar Shirzad.
The global economy may have weathered the Iraq war and surging oil and natural-gas prices pretty well so far. But nervousness has been rising again. Hurricane Katrina showed some of the vulnerabilities of the energy system to natural disaster. Over the holidays, Russia cut off natural gas to Ukraine and Moldova, causing pressure in the pipeline to Western Europe to drop briefly. That triggered a panicked Europe to debate how to diversify energy supplies.
Now Iran is roiling energy markets, as the U.S. and European Union aim to ratchet up pressure on Tehran to abandon nuclear programs that might be used to make weapons. That's raised concerns that Iran's four-million-barrel-a-day production could be disrupted. Oil prices are pushing back toward their recent peak, reached after Katrina in intraday trading, of $70.85 a barrel.
None of this will get resolved at Davos. But the ability to gather so many Fortune 500 CEOs, top politicians, NGO heads and thinkers in a room together and let them work it out may get some ideas rolling. That, according to the forum's founder and president, Klaus Schwab, is what makes Davos different from other talking shops.
Of late, Hollywood celebrities have generated a lot of Davos buzz, too. Last year actors Sharon Stone and Richard Gere stole the show — sparking criticism that Davos had gone Hollywood. Apparently, some of that criticism stung Mr. Schwab and it looks like Ms. Stone won't get invited again.
She “had a little bit of her own show, and that is not what we really appreciate,” Mr. Schwab said in an interview. Stars, including Michael Douglas, will leaven the mix of suits again this year, but they'll include more intellectual types, too, like the architect Rem Koolhaas, Mr. Schwab said. Mr. Koolhaas is as famous in the architecture world as Ms. Stone is in movies — though perhaps without the same primal draw.
Write to Marc Champion at [email protected]

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