OPEC, Russia, and Green Dieoff.Orgy Biggest Losers in Coming Age of Energy
For nearly four decades, OPEC -- the cartel formally known as the Organization of Petroleum Exporting Countries -- has been a major economic and geopolitical force in our collective lives, driving nations to war, otherwise self-respecting world leaders to genuflect, and economists to shudder....Russia's Vladimir Putin has strutted the global stage, bolstered by gas and oil profits, and Venezuela's Hugo Chávez has thumbed his nose at los Yanquis. _FP
And green dieoff.orgy fundamentalists have pushed governments to abandon reliable and clean forms of energy such as nuclear, in a gigantic, potentially catastrophic scam to force dependency upon exorbitantly expensive intermittent unreliable forms of energy such as big wind and big solar.
But something happened along the way to the great OPEC / Russia / Green dieoff.orgy celebration: humans discovered that clean and affordable energy was not nearly as scarce as they were being told by their green tainted leaders.
Still, one should never underestimate the ability of bad government to convert a great opportunity into an even greater problem. If greens cannot be removed from power, they are likely to continue to overtax, overregulate, and misallocate resources within their unfortunate jurisdictions.
A growing number of key energy analysts say that technological advances and high oil prices are leading to a revolution in global oil. Rather than petroleum scarcity, we are seeing into a flood of new oil supplies from some pretty surprising places, led by the United States and Canada, these analysts say. Rather than worrying about cantankerous petrocrats, we will need to prepare for an age of scrambled geopolitics in which who was up may be down, and countries previously on no one's A-list may suddenly be central global players.And what is true for North America, could also be true for multiple parts of Europe, South America, East Asia, the Levant, and even Africa.
One primary takeaway: North America seems likely to become self-sufficient in oil. "This will be a huge potential productivity shock to the U.S. economy," says Adam Sieminski, director of the U.S. Energy Information Administration, a federal agency. "It could grow the economy, grow GDP, and strengthen the dollar." _FP
The big losers are:
LOSERS
Unenlightened petrocrats: Oil prices could be lower and volatile in a world of surplus. So for states relying on a single economy such as oil or gas, "it is not a pretty picture," said Morse. He forecasts much political turmoil, and a struggle to keep market share. That includes Chàvez for sure, but could also jostle Teodoro Obiang Nguema, the allegedly corrupt president of Equatorial Guinea, Turkmenistan President Gurbanguly Berdymukhamedov, and Iranian Supreme Leader Ayatollah Ali Khameini.
Russia: Michael Levi of the Council on Foreign Relations led the panelists, plus many audience members, in singling out Russia as a key loser since Putin shows no sign so far of genuine economic diversification. For his state budget to break even, Putin requires an estimated oil price of $117 a barrel. Right now it is 12 percent below that threshold, or about $103 a barrel. Struggling to make up the difference but with no tools other than oil and gas to do so, Putin seems headed for a tougher political experience than in his previous tenure as president in the 2000s, when he rode a wave of public popularity based on a growing and optimistic middle class. When Russians realize their living standard is static or diminishing, they will not be happy.
The green edifice: ...The bar was already high for green-tech companies to compete against the economics of fossil-fuel energy; with lower oil and gas prices, the bar rises higher....
OPEC: With prices dropping and competing supplies flowing from numerous new producers, OPEC will lose much relative influence, and may simply cease to be a pivotal economic player. "OPEC will descend into chaos as an organization," said John Hofmeister, former president of Shell USA. "They don't know now how much they are hated by the entire world. But they will find out as things unfold." ... _FP
Of course, if Barack Obama is re-elected president of the US, all bets are off. Obama's war against energy was necessarily curtailed by the need to win re-election. In a second term, no such constraints would be present. In such an event, expect an unending flurry of executive orders tailored to constrict the US energy sector and the US private sector in general.
If you think Obama's first term was a stagnant disgrace, wait until he has carte blanche to go off the rails in any direction he chooses.
Labels: energy, faux environmentalism, intermittent unreliables