The Future of Energy: The Leading Indicators

The future of global commerce and economic and social stability rests in the hands of those designing and planning the future of energy. The ancient book Balance and Harmony describes knowledge and wisdom in not so few words but is worth paraphrasing; Deep knowledge is to be aware of a disturbance before the disturbance occurs. Wisdom is to know the answer to a question before the question is asked. To sense and comprehend after action is not worthy. In this case, it might be dangerous.

The disturbance looming is nothing less than the potential that the world will not have sufficient energy to quench our thirst our fuel our existence. If this were to occur, the question becomes, what would happen? Might this scenario trigger World War III for the oil silently sleeping beneath the land in the Middle East or Caspian Sea? Might there be a prolonged economic downturn? Might this result in a slow but tectonic shift in all major industrial patterns and social activity? Are we the proverbial frog patiently lying in wait as we boil alive, one year at a time? This scenario is far more likely than conventional wisdom believes for the following reasons:

1. Crude oil will never run out, but cheap oil already has. There has been a permanent shift inthe pricing threshold.
2. Proven oil reserves are at best one fifth of the picture. Turning reserves into a digestible product requires exploration, production, transportation, storage, refining and shipping capabilities. To use a metaphor, if reserves are the equivalent of an apple tree, we do not eat the tree, we eat the apple.
3. Energy demand will continue to increase faster than conventional wisdom predicts, driven by the East and other emerging nations.
4. Conventional supply will continue to be constrained by a long list of issues including product and labor shortages, national oil companies and political or regulatory gridlock.
5. Alternative sources will not come on stream as fast as we predict or forecast due to shortages in skilled labor, raw materials, and available providers and general acceptance.
6. Natural and man made disturbances will continue to shock the system while small and incremental changes add up.
7. Geopolitical, philosophical and ideological differences between the East, West and the landing between, will continue to cause global friction and a shifting of allegiances as the world seeks a new state of energy equilibrium.

The net summation of these factors will result in a world that before the year 2016 could be far different than the world of 2006. It requires nothing less than a clarion call for a national and in fact global, energy strategy and vision to be mapped out and implemented, ala the great vision of going to the moon shared by John F. Kennedy or the creation of The Federal-Aid Highway Act of 1956 which created today's Interstate system, forged by President Eisenhower. The problem is that asgreat as these visions were, they were only for the United States and the vision for the future of energy must be a global one. What is stopping us from embarking on a new bold vision is the belief that we have sufficient proven reserves.

n/an/a