Geopolitics, oil, and the ultimate inevitable celebration of the oil sands
Decades ago, when the west cared about energy security, weird things happened around the world. Major new hydrocarbon discoveries in various undeveloped corners of the world led to instant new ‘friendships’ – hey look everyone, we just signed a new trade deal with Angola! And a generation of political pundits scrambled for their atlases. Political alliances were formed with virtually anyone that helped with petroleum supply (I bet there were even instances where hard-core pro-war ultra-conservative military-industrialists raised their eyebrows and said “Really? That guy? He’s nuts.” But they supported him anyway…).
The phenomenon is of course not unprecedented – big powers have always sought out what they needed to survive. Petroleum was just the most recent commodity, in desperate demand as the west’s lifestyle spiralled up and out. And it only spiralled up and out because of affordable hydrocarbons.
Now that the west has been brutally afflicted by comfort – perpetually full supermarkets, ultra-reliable energy, endless leisure options – some circles have lost interest in reliable, secure energy in the ignorant belief that it can simply be replaced by renewables. It can’t, and we will find that out after some as-yet-undetermined level of damage, but the interesting part here is the repercussions for current hydrocarbon supplies.
The petroleum-supply geopolitical machine that the west once relied on has been tossed on the scrap heap due to a belief that US shale supplies will provide a hundred years’ of supply, and by the notion that we won’t be relying on hydrocarbons for much longer anyway because of the ‘energy transition’.
The latter in particular is changing the west’s petroleum outlook, to the extent that rabid activists are trying to hound Big Oil out of existence. They may succeed; recent court cases and shareholder activists are changing the course of large multinational oil companies. These slow-moving behemoths are being forced to adopt new green strategies, cut exploration budgets, and exit oil production as fast as possible. They seem to have few friends in the house, anywhere, except of course the faceless and endless stream of consumers that rely on their products for survival. (It may soon be illegal to say that, so just getting in while I can.)
But from a global perspective, it is as though we are moving back in time 70 years, with different players. China, India, other parts of Asia, and Africa are on a development trajectory much like North America and western Europe were in the middle of the last century. They are now the ones looking to secure energy supplies (China being the most aggressive; places like Africa simply want to develop the reserves they have). There is one huge difference, of course – those regions in combination have a population ten times that of North America.
India and Africa have recently made it clear that they intend to develop and utilize hydrocarbon resources to the maximum extent possible, for as long as they see fit. China has said something else – pledging carbon neutrality or some such metric by 2060 – but for any rational person their promises should have the credibility of a manic pro wrestler. (Despite what China says about plans to slash emissions, the country is building new oil refineries, building tens of thousands of kilometres of hydrocarbon pipelines, and constructing new coal-fired power plants).
So, in the coming years, we can expect to see these regions – Asia and Africa, predominantly – with their combined 4 billion citizens scooping up all the properties the west is being forced to sell (for example, Shell will be hounded out of Nigerian oil production sometime pretty quickly). They will buddy up with the Middle East’s key cantankerous players, in the name of energy security. They will act to guarantee supply.
The west? We will be in trouble. We are going to need hydrocarbons for many decades as well, no matter what a hundred thousand academic sociologists and climatologists and soft-science PhD politicians say. We will be forced to look in unsavoury places for our hydrocarbon fix.
The ultimate irony out of this? Mark these words: In 30 years, Canada’s oil sands, recently decried as a ‘carbon bomb’ and killer of the world’s climate, will be the most valuable asset in North America. It is an unbelievably huge, landlocked resource that will be available for another hundred years, long after today’s hot shale plays are drilled up like Swiss cheese.
Energy security will one day be popular again, and we will be grateful for what we have in our own back yard.
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