The Middle East, since the "petrodollars" phenomenon in the 1970's, somehow dominated the world, in the economic and energy sense.
If world oil demand falters, they reduce production; if it surges, they hike prices in tandem.
The oil-producing nations had enough petrodollar reserves to lend and invest in many overseas nations, advanced their political agenda and some even used their money to export terrorism to the nations they hated.
Hopefully, that dire situation will change.
The Arab nations are lucky that there is a new surging demand for oil like populous countries like China and India enabling them to keep the average Brent crude oil price in 2011 at a high US$111/barrel.
This surge was balanced by the reduced demand resulting from the pockets of recession in Europe and the mild one in the USA. Added to that were the technological advances that made vehicles, gadgets and plants more oil-usage efficient and the rise of substitutes for oil in transport and electric power usage.
Many countries like the USA, Australia, China, Brazil and Canada have been driven to look for alternative sources of fuel over the years. The end of Arab oil supremacy could be at hand .
Fortune disclosed that America is now the "Saudi Arabia of natural gas" – in fact, it has new domestic natural gas supply worth 100 years usage based on today's consumption. The natural gas production in that country had risen by 28% since 2005.
Exxon which bought XTO Energy (master in the new oil mining technology called "fracking") – and helped by high oil prices- shot to No. 1 in Fortune 500, eclipsing heretofore leader Wal-Mart with Exxon sales in the USA at US$486 billion and profits at US$ 41-Billion, the second largest in its corporate history.
In a few years time, oil experts predict that the USA will be able to sell natural gas to North Asia, Europe and South America (even with shipping costs) at 40% less price than the conventional crude oil. China and Australia are forecast to produce the same natural gas as well.
Western-friendly Canada now boasts of the second largest crude oil reserve in the world. The combined oil reserves of China, South America and Europe are still 250 years.
The world is moving away from "energy dependency" on crude oil and so its research has gone into – more efficient vehicles (buses, trains, cars, jeepneys, motorcycles) run by electric batteries and even by hydrogen and water. Many countries are now using CNG (Compressed Natural Gas) sources for public and private transportation by converting engines with ready tools, substituting engines with compatible ones and building new CNG0-based means of transportation.
Cheaper and cleaner than conventional gas- CNG is the wave of the future in many countries.
Exxon forecasts that by 2040 with hundreds of millions of people joining the middle class ( from the poor side) the world over- the demand for electricity will shoot by 80% from the present level. But the world is moving away from having its electric power moved by crude oil-based products alone.
In fact by 2025- the USA electricity will be powered by the following (in order of volume): crude oil, natural gas and coal- with natural gas showing the biggest increase in percentage share.
In the same USA, shale gas production which was only 11% in 2008 is now a bigger 33% of total production with the HIS Global Digest predicting that shale gas shall be 60% of total energy source production by 2035.
Newsweek reported in its "Truth about Oil" – there are about a staggering 1.459 trillion barrels or new discovered recoverable oil reserves in various forms and mining methods that should alter both the economy and the politics of the coming decades.
For instance, Light Crude Oil in Texas and North Dakota –produced by the hydraulic "fracking" method- is teeming with 300 billion barrels of reserves. The prevailing climate change has also impacted a positive benefit- the melting of the Artic Ocean lately opened new potential drilling and shipping opportunities of 90 billion barrels of oil just there.
Brazil , headed by the huge state-owned oil giant Petronas is leading the mining of Presalt Deep Water oil variety off the shores of Brazil with a potential of 50-100 billion barrels of oil reserves of this type. The Oil Shale (from solid ketrogen) is huge off the states of Wyoma, Utah, Colorado and Michigan with a mind-boggling estimate of 800 billion barrels.
Meanwhile, oil from the Oil Sands (sandstone saturated called bitumen) is a big thing in Canada with 169 billion barrels in recoverable reserves.
Many electricity-intensive countries are likewise moving away from dependency on crude oil as power source. Its natural rival would be the use of natural gas since coal and nuclear are allegedly on their death throes.
Environmentally-hostile coal plants are no longer manufactured commercially while Germany has banned all its nuclear reactors as it followed Japan which grounded 53 of its 54 nuclear plants –for reasons the Great Tsunami Tragedy in Japan exposed so vividly.
Even in the Philippines, the medium-term energy plans presented by Energy Secretary Rene Almendras include the growing use of geothermal, hydrothermal and solar and wind to a lesser degree while coal , it seems, is no longer the favored power source.
More than that –the recent Scarborough Shoal grew more significant by the research findings done by Brig General Edwin G. Nemenzo , deputy Commander of the 3rd Force Division Philippine Air Force based in Zamboanga City-as told to the Philippine News Agency-that the country (particularly near the Spratlys Islands) sits on a gargantuan oil reserves worth US$ 26-Trillion dollars.
That is enough to pay off the entire Philippine external debt and provide basic services to over 90million Filipinos many in dire poverty.
Such PAF findings were earlier confirmed by the China Ministry of Geology that the area has reserves of 17 billion barrels of oil- larger than the remaining 13 billion barrel reserves of Kuwait- a major oil producing country.
All these new discoveries of oil reserves and energy source substitutes should bring a smile to the rest of the world who always looks forward to the day that the dependency on Arab crude oil will become a thing of the past.
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The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The contents of this article have not been reviewed nor approved by FINEX. Read more in Manila Bulletin
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