By Heather Douglas
It started with the brown-eyed sheiks’ anger at the United States. The blue-eyed sheiks retaliated and the battle for energy superpower status was on. In 1959, America, led by the 34th President Dwight Eisenhower (1890 – 1969), imposed a quota on imports of oil and refined products from the Mideast and gave preferential treatment to Canadian and Mexican crudes.
Four Persian Gulf countries – Iran, Iraq, Kuwait, and Saudi Arabia – along with Venezuela, sought revenge by forming the Organization of Petroleum Exporting Countries (OPEC). By 1973, eight other countries – Algeria, Ecuador, Gabon, Indonesia, Libya, Nigeria, Qatar, and the United Arab Emirates – had joined.
Since then, the cartel has tried to set the global oil price — by either restricting production to keep prices high or flooding the market to prevent non-OPEC countries from bringing expensive crude on-stream. Saudi Arabia was acknowledged global energy superpower and continues as a formidable force. It has the world’s largest conventional oil reserves and pumps about 8,693,000 barrels a day. Thus, it still dominates the politics of oil because it can set the global price.
Playing defense, a shadow cartel of mostly blue-eyed sheiks emerged. These countries – Russia, United States, China, Canada, Mexico, the United Kingdom, Norway, and now Kazakhstan – produce about half the world’s crude. The superpowers are Russia, America, and China. They are jostling aside OPEC to also set world price.
Canada has Failed to Elbow its Way onto the International Stage
Despite this country’s sizable conventional and unconventional reserves, Canada has failed to elbow its way onto the international public policy stage. We neither command enough market share nor set or unilaterally change the rules of the worldwide energy game.
Globally, Canada ranks first in uranium, fifth in crude oil and coal reserves, sixth in electricity generation, and has slipped to 17th in natural gas resources. Its fossil fuel producers have suffered a possibly fatal erosion of public support and, without it, Canada has become a fading superpower long before it ever emerged as one.
Oil prices in today’s world are fickle because of the drive to sustainability and the effect that extraction – whether through drilling or mining – poses for policy makers. The International Energy Agency (IEA) say the current oil market is producing about 1.5 million barrels/day above 2017. Currently, the oil market is expected to increase slightly to 1.4 million bbl/d, down slightly from last year’s gain of 1.6 million bbl/d, as high oil prices, shifting Chinese demand patterns, and fuel-switching continues in non-OECD (Organization for Economic Co-operation and Development) countries. This should continue to slow growth.
Undaunted, the world’s renewable energy industry has decided to explore the green-eyed route into superpower territory. These entrepreneurs are dedicated to producing energy that is reliable, affordable, and secure while addressing the world’s concerns about carbon dioxide.
When clean energy first made headway in the global scenario, questions were raised about how stable and scalable it was. At a macro level, unstable policies for powering future growth were exacerbated by technological immaturity and lack of funding. Nevertheless, clean energy installations continued to grow, albeit slowly, until a dramatic leap a few years ago.
According to the World Economic Forum, in 2018, a fifth of the world’s electricity is produced by renewable energy. In 2016, there were 160 GW of clean energy installations globally. This was 10 per cent more than in 2015 and cost almost a quarter less. New solar power gave the biggest boost, providing half of all new capacity, followed by wind power, which provided a third, and hydropower, which gave 15 per cent. It was the first year in history that added solar capacity outstripped any other electricity-producing technology.
Surprisingly, Canada ranks fifth in renewable energy, its same ranking for oil. It’s obvious this nation has taken great strides in reducing emissions. Alberta was the first jurisdiction to monitor greenhouse gases, first to pass legislation to manage large industrial emitters, and first to see real results. It has the potential to climb as it continues to manufacture and install low carbon equipment.
It’s a formidable challenge to move from carbon intensive to carbon smart, yet it offers entrepreneurs a tremendous business opportunity to create the Silicon Valley of energy innovation.
If Canada wants to become a clean energy superpower, it needs to tackle the massive gap between climate change commitments (reduce emissions to 0.5 per cent) and its ongoing role as an energy producer and consumer.
Meanwhile, in 2008, the United Arab Emirates broke ground on the world’s most sustainable eco-city. The country is pioneering a “green-print” for how cities can accommodate rapid urbanization, while drastically reducing energy, water, and waste. The architects combined ancient Arabic techniques with modern technology to harness the prevailing winds to make it cooler and more comfortable during the high summer temperatures. They installed a vast array of solar panels to capture the sun’s rays to power the area’s electricity grid. It’s a high-tech urban oasis filled with passionate young people who are pioneering a new way of life in the dessert. When finished, the government expects about 40,000 people will live and work in Masdar City.
The energy game has changed. The anti-fossil fuel crowd is betting that renewables will quickly displace all fossil fuels and make this industry obsolete. While we think the green-eyed sheiks are doing great work, don’t count out the original brown-eyed and blue-eyed sheiks. The battle for super-power status continues.
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