Oil extraction from shale. Does it presage the end of OPEC's power?
Could this be the beginning of the end for petro-economic bullying?
Large new, conventional and unconventional reserves in North America, and elsewhere, are questioning the dominant role of OPEC in meeting the global oil thirst. These new developments have also sapped the urgency to develop the [Saudi Arabian] Kingdom’s own reserves — further — at this stage.
The transition has been in air for some time now — yet it has just been officially conceded — from the top. “The abundance of resources and the more ‘balanced’ geographical distribution of unconventionals have reduced the much-hyped concerns over ‘energy security’ which once served as the undercurrent driving energy policies and dominated the global energy debate,†Khalid Al-Falih, the Aramco CEO, said last week at the Energy Dialogue organized by the King Abdullah Petroleum Studies and Research Center.
“Unconventional” refers to fuel from shale, oil sands, etc. — anything other than drilling. Such sources of energy have traditionally been more expensive to extract, and there are serious environmental concerns with some of the processes involved. However, with the rise in the price of OPEC oil (most comes from Muslim nations in the Mideast plus Venezuela) and technological advances, these resources are becoming relatively more attractive.
And then there is natural gas, which in compressed form can be used to power internal-combustion engines in vehicles with little modification, as well as to generate electricity, etc. Large amounts of “unconventional” gas have been discovered in the US and Canada, which — although present extraction methods are controversial for environmental reasons — are already being extracted. There are also newly-discovered large gas reservoirs in the Eastern Mediterranean, including Israel’s territorial waters.
What this means is that the civilized world may be able to get out from under the thumb of the OPEC nations, which have used their economic power since the 1970’s to finance their wars and terrorism against Israel, to buy influence in the West and to pressure Western economies.
Mediterranean gas may also help reduce the dependence of Europe on gas from Russia, which has not hesitated to use it as a political lever in the crudest possible way.
I don’t want to minimize the importance of the environmental issues surrounding shale oil extraction, fracking, etc. But these are problems which have technological solutions.
Even if these new sources of energy do not replace OPEC oil, they will put a ceiling on its price. And with the conversion of more and more applications to natural gas — as well as non-fossil energy sources — they will put even more pressure on the least efficient producers (e.g., Iran).
Maybe when the Arab and Muslim world loses its oil clout, Westerners will be able to view its culture more objectively.
It will help, but there is one problem.
Ever since the Cold War/Vietnam era, there has been a very large and stubborn segment of society – chiefly clustered around academia – that practically lives to stick their fingers in the eyes of the Big Bad Capitalist Rich White Guy Imperialist Bully. That would be the U.S., and increasingly since that time, her staunchest front-line ally, Israel.
I remember being in college at U of M Ann Arbor during the early-mid 1980s; the “nuclear freeze” movement, the rallies and meetings opposing U.S. weapons programs (e.g., the Pershing 2 missile), NATO military exercises, and so on. I remember the countless professors and assistant professors, and their brown-nosing “hip” me-too hanger-on students, trying to re-live the 60s, always beating up on “imperialist” America, while the USSR was completely blameless and pristine in everything they did. I wrote so many papers arguing against that point of view – not unlike my stalwart defense of Israel today, against the same sort of people – and all the red ink splashed across my papers by these twit professors of mine.
The Cold War ended. The archives were opened. Lo and Behold, the neanderthal chump Boy Scout patriots like myself were proven right. The Soviets really did have contingency plans to strike first in Europe if a crisis demanded they do so. Their strategy really was offensive. They intended to use WMDs first – not only chemical weapons which we expected, but even nukes, which we didn’t. They had all sorts of subversive programs aimed at our universities and our media to distort public perception in the West. Their outrageous failure of a society, corrupt and dysfunctional to the core, was laid bare…..
….And without skipping a beat, without so much as a whiff of humility on their breaths, these VERY SAME academics, within the context of our current war against Islamic fundamentalist inspired terror, sold out completely to our enemies again. Everything was our imperialist fault all over again, just like last time. And at the center of it all, now, is our primary front-line ally in this war, Israel, as the most evil element of the whole picture, per their narrative. They seemed to have little trouble finding someone else to sell out to. And as an added bonus, they can indulge in the naughty, medieval visceral pleasure of Jew hatred – or Jew self-hatred – and make it seem “respectable”, in the name of noble anti-colonialism.
They have not only enriched themselves with this – don’t worry, shale oil or now, the petrodollars will still flow into the Swiss bank accounts of these folks – but daggumit, they are just having SO MUCH FUN doing this!
I don’t think shale oil will change that.
I hope so, but I’m not optimistic.
It will, however, make it a lot easier for Israel to tell the world to F*** OFF. And that’s good enough for me.