I’ve blogged before about Canada’s oil sands, and the political battles and environmental issues that they have spawned. What is clear, however, is that despite the environmental and safety issues that new energy supplies raise in North America, economic changes are reshaping the energy industry with stunning speed. While the Canadian Oil Sands are the main focus of attention, it may be that discoveries of massive supplies of natural gas near Ft. St. John in northern British Columbia are also of global significance. As this article by Brent Jang in the Globe and Mail describes, it is enough supply to support a century’s worth of production. For Canada’s native peoples, in particular the Gitga’at people, potential exports are both a danger and an opportunity. But the discovery has implications that stretch far beyond the region. For Japan this find is so large that it has strategic implications as the nation turns to liquified natural gas (LNG) to replace the electricity production lost with Fukushima. Canada is a logical energy partner, and a large supply of Canadian natural gas will increase the competition for the Japanese market, which should make this energy transition easier.
The rapid development of energy supplies is also boosting both the economies of both Canada and the United States. This has been a terrible week for emerging economies such as Argentina and Venezuela, as money pours out of their stock markets. Part of the reason that countries as diverse as Turkey and South Africa are suffering from an economic reversal is that funds are now flowing into the United States, in part because of its current energy boom. As energy costs decrease, manufacturing becomes more competitive in the U.S., as does the production of many chemicals and plastics. If you’ve been feeling depressed about the economic future of the United States, you could do worse than to read this recent piece at the PBS Business Desk, titled: “America Unleashed: While We’ll be Number One Once More.” Throughout the Americas, energy markets are in a state of rapid change, as Brazil seeks to rapidly expand its off-shore fields, while Mexico liberalizes its energy market. Still, nowhere is the growth of oil and natural gas production taking place as quickly as North America.
Not long ago, the website the Oil Drum announced that it was shutting down. This website had brought together a virtual community of people who believed in “Peak OIl”; that is, that the maximum of historical oil production had been (or was about to be reached) for petroleum after which it would enter into a long, slow decline, perhaps leading to the collapse of modern society. While the websites’ editors talked about their difficulty finding new content, I believe that the fundamental reason that the website shut down was that people no longer believed that Peak Oil would happen in the foreseeable future. With the rise of fracking, the question has become not when we will run out of oil and natural gas, but rather how dirty do these fossil fuels have to become before we abandon them?
Several years ago I contacted a large private foundation with a request that they support my effort to write a book about the politics of the energy industry in the Americas. They chose not to, because they said that they did not think that there was enough new to be said on the topic. Although time has proved them wrong, I also think that if I had received the grant, my project would have been outdated before I could have finished it. The recent finds in northern British Columbia suggest that there may yet be more major surprises.
Shawn Smallman, Portland State University