File this one under foregone conclusions: “$100 oil would have a big political impact” by Gideon Rachman in the Financial Times. Mr. Rachman argues that the implications include more spending by Hugo Chavez abroad and more money for Hezbollah from Iran, worsening human rights from oil exporters like the Sudan, and a dramatic increase in anxiety for Europe to construct a common policy toward Russia. But as long as countries like Germany and the Netherlands continue prioritizing bilateral deals, argues Rachman, the common EU policy won’t get anywhere. A real bouquet of predictions here. Excerpts after the jump.
From the Financial Times:
People facing alarming birthdays often say things like: “Forty is just a number.” You could say the same about “$100 oil”. But such benchmarks concentrate minds. As the oil price threatens to break through $100, politicians all over the world will think hard about the strategic consequences.So what is likely to happen? The biggest single effect is obvious. Oil producers become richer and more powerful. The biggest oil consumers – the US, China and the European Union – become increasingly anxious. Beneath that big trend, there are smaller effects that could change the course of some of the most delicate and dangerous problems – Iraq, Iran, China’s foreign policy and the resurgence of Russia.The effects of a rising oil price on the economies of the producing countries are dramatic. The Organisation of the Petroleum Exporting Countries made $650bn from oil sales in 2006, compared with $110bn in 1998. Russian oil and gas revenues have quadrupled over the same period.When bad governments make good money, they become more relaxed at home and more assertive abroad.Two of the Bush administration’s least loved leaders – Hugo Chávez of Venezuela and Mahmoud Ahmadi-Nejad of Iran – will have more money to chuck around. Venezuelan money already subsidises everything from housing in Nicaragua to cheaper bus fares for the poor in London. (A policy that Boris Johnson, the Conservative mayoral candidate in London, has denounced as “completely Caracas”.) Iran will have more money to fund its nuclear programme and to support foreign surrogates such as Hamas in Gaza and Hizbollah in Lebanon.The Russian government will find it easier to buy off impoverished pensioners and to take tough positions on a range of international issues, from the future of Kosovo to America’s plans for missile defence in Europe.Tyrannical governments sitting on oilfields will be more likely to find protection from powerful oil-consuming countries. China, for example, will be even less likely to support bringing pressure to bear on the governments of Burma and Sudan….High oil prices will only increase the EU’s anxiety to mould a common policy towards Russia. But that is easier said than done. Some countries such as Germany and the Netherlands seem intent on building as close an energy relationship as possible with the Russians. Others – in particular, Poland and the Baltic states – will continue to argue for EU investment in new gas pipeline routes that bypass Russia, and for tougher restrictions on Russian energy investment in Europe.
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Time for a “Triple Play”: Reduce Oil Prices and Dependence on Fossil Fuels, while Meeting the Growing Demand for Electric PowerThe Cost of OilOil prices are climbing toward $100/barrel. In two years there will be one billion automotive vehicles worldwide. If current trends continue, by 2030 world oil supply, projected to be 70 Million barrels per day, will fall far short of the estimated daily demand. The projected shortfall of 40 Million barrels of oil per day will drive fuel costs far beyond tenable levels. The world will see more wars, such as the conflict in Iraq, unless a path is opened that can dramatically reduce demand for oil.Fossil Fuels and Global WarmingJames Hansen at NASA Goddard speaks for many scientists, stating that we must dramatically reduce the use of fossil fuels in less than a decade to avoid life threatening catastrophes. The Intergovernmental Panel on Climate Change, that shared the 2007 Nobel Peace Prize with Al Gore, concluded that drastic shifts are happening much more rapidly than earlier predicted. As the average global temperature increases, each 1 degree Celsius rise deprives between 400 million and 1.7 billion people of sufficient water.Greenland loses more ice each year than all the ice in the Alps said Konrad Steffen, a Greenland expert and advisor on abrupt climate change. “It is scary,” said Steffen. Not only in Greenland, but in Antarctica and elsewhere there is massive melting of ice. In 8 years nearly all Peru’s glaciers will be gone due to global warming and its 27 million people will nearly all lack fresh water, with the likely result being: ‘chaos, conflict and mass migration’. A total of 46 nations and 2.7 billion people are now at high risk of being overwhelmed by armed conflict and war because of climate change. A further 56 countries face political destabilization, affecting another 1.2 billion individuals. (Observer UK 11-4-07). More than 180 nations have coastal areas in peril. Two-thirds have over 5 million people under threat of serious flooding. Included are cities such as New York, London, Miami, Shanghai and Tokyo.The World’s Huge Appetite for EnergyEnergy consumption is at the core of human existence. It virtually controls what we eat, how we live, where we go, how we are entertained, our health, knowledge, defense and exploration. The world’s demand for energy is surging.The International Energy Outlook 2006, by the U.S. Department of Energy, forecasts electricity use will grow by an average of 2 percent per year worldwide and almost twice as rapidly in the developing world. Robust economic growth in many developing nations is expected to boost demand for electricity for air conditioning, cooking, space and water heating, and refrigeration. Global energy consumption is projected to increase by 71% from 2003 to 2030. We need to sharply accelerate development of radically new, cost-effective, sustainable alternatives.The Triple PlayA revolutionary new technology, GENIE™ (Generating Electricity by Nondestructive Interference of Energy) is being developed at Magnetic Power, Inc. (MPI).MPI has dedicated more than 20 years of research and development into exploring breakthrough technologies. To reverse the trends discussed above, MPI envisions a technological revolution, developed commercially, that has limited impact on available planetary resources. GENIE is projected to be easy to manufacture and use, as well as inexpensive, thus capable of rapidly achieving global impact.Based upon proprietary breakthrough discoveries in MPI’s labs, GENIE generators are being designed to operate continuously, without fuel, extracting electricity by converting an energy source that exists everywhere in the universe. This process creates no pollution. The cost of electricity is estimated to be significantly less than any competing form of power generation, today or in the foreseeable future.GENIE generators with no moving parts can be made in many of the world’s electronics factories. Household units will produce power 24/7. Larger units will replace automobile engines. GENIE will eliminate any need for fuel to run a vehicle. It can also allow future cars to become income producing power plants when parked.GENIE is a magnetic device. Nobel physicist Werner Heisenberg once stated: “We could utilize magnetism as an energy source”. Hans Coler demonstrated a 6 Kilowatt, solid-state, magnetic “space-energy receiver” in Germany during 1937. It was destroyed by an Allied bomb during WWII. The invention was confirmed by British Intelligence after the War. However, at the time, there was no comprehension as to the source of the energy. Coler wrote: “These fundamental researches…have made the first real and large breach in the citadel of present scientific belief.”Advanced GENIE prototypes are currently being constructed by MPI. Lee Felsenstein, EE, evaluated an early proof-of-concept prototype. He felt it to be analogous to the first examples of the transistor, which eventually led to a Nobel Prize and the creation of Silicon Valley (and similar high-tech complexes throughout the world).A near-term MPI goal is a compact, solid-state, 1 kW self-sustaining generator. In 2008, a plug-in hybrid car, with a pair of these 1,000 watt GENIE prototypes, is expected to demonstrate that a connection to the grid is not necessary in order to recharge the battery. That will herald the beginning of an end to the need for fuel.The urgent need is for an emergency changeover, in less than a decade, from burning fuel, to widespread use of new sources of energy that eliminate the need for fossil fuels. The Triple Play made possible by GENIE makes that a practical goal. We applaud all efforts to replace oil and reduce greenhouse gases. However, nothing short of revolutionary new technology can act fast enough to save millions of lives.Scientists may express skepticism, since the energy source is not yet widely understood. Acceptance will come when one sits on a desk in front of them and produces electricity. MPI is developing Demonstration Devices and toys. Young people with open minds might teach their elders how they function. This Triple Play can and will accelerate, as rapidly as the required funding will allow.