Peak oil prophets a little peeved

            Peak oil enthusiasts and other doomsday prophets (who me?) may have to take a 20-year hiatus from their ‘End is Near’ rants.

            North America is apparently poised to become a net exporter of oil by 2030.  And the United States is poised to overtake Saudi Arabia in oil production by 2020.  Say what??  What seemed unfathomable only five years ago will come to fruition in a few years, according to the International Energy Agency.   Fast flowing light crude oil is being pumped out of previously unreachable reserves throughout the American Midwest.

            All this goes to show that technology can dramatically change economies and world trends in a very short time period.  China will continue to drive growth in oil demand, but greater fuel efficiency standards in North America and Europe will help to offset it.  Add in the extra supply, and we’re laughing for the next 20 years!

            The United States, at least, will certainly be better off.  But Canada has put all its eggs in one energy-rich basket.  We’ve weathered the recession better than others in large part because we had big oil to fall back on.  While Ontario struggled, western Canada flourished thanks to the oil sands and new oil finds in Saskatchewan.  Both sides could be struggling soon.

If oil drops below $50 a barrel, oil sands lose their profitability, and everyone will go back home to Newfoundland.

It will also temper growth in Saskatchewan.  The province has become more and more dependent upon its resources for revenue, with its budgets and spending growing by leaps and bounds since the resource boom began in 2005.  A return to the days of $30 a barrel oil would be disastrous for the government and the economy.

            Good times may not be here to stay.

            Only a couple years ago analysts were suggesting the commodity boom would last forevermore until the last drop of oil was sucked out of the earth.  Energy-producing countries therefore had nothing to worry about.  While commodities may never be as cheap as they once were, the next decade could prove to be a tough one for Canada if our southern neighbour becomes the next Saudi Arabia.

            It may be tough for resource-rich regions, but great for the rest of the world.  Not only may energy become cheaper, but so will food.  Cheap energy benefits the poor, and can move many millions out of poverty.  Cheaper energy will also (hopefully) limit the conflicts in oil-rich regions of the world. 

            Let us hope we don’t squander this opportunity.  If it indeed comes to pass that we can fill up a tank at 53 cents a litre again (might be a bit too optimistic here), let’s continue down the path of energy efficiency and conservation, as if peak oil is around the corner. This is a golden opportunity to reduce our dependency on fossil fuels that could have been realized decades ago.

            But who am I kidding?  Human nature being as it is, we’re likely to guzzle the cheap energy like there’s no tomorrow.

            That is, if there’s a tomorrow.... (cue doomsday music)