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.
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)