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Long-term trends in global growth and new political-economic rivalries create a tight energy market and volatile prices. These conditions make energy security a frequent worry for business and financial analysts and a high priority on policy makers ’ agendas. Analysts are uneasy because standard analytic approaches often fail to predict behavior in energy markets. And uncertainty makes it difficult for policy makers to compete for adequate supplies at an affordable price. This paper examines how the new institutional economics (NIE) can contribute to developing a better understanding of energy market behavior and draws implications for research, education, and policy making. 3 “Trends in energy supply and demand are affected by many factors that are difficult to predict, such as energy prices, U.S. economic growth, advances in technologies, changes in weather patterns, and future public policy decisions.” “Oil prices are currently above EIA’s estimate of long-run equilibrium prices, a situation that could persist for several more years.