{"id":74282,"date":"2019-09-13T05:49:47","date_gmt":"2019-09-13T09:49:47","guid":{"rendered":"https:\/\/huntsville.dopperonline.ca\/?p=74282"},"modified":"2019-09-10T19:03:29","modified_gmt":"2019-09-10T23:03:29","slug":"the-geopolitics-of-energy-by-dave-wilkin-and-tim-lutton","status":"publish","type":"post","link":"https:\/\/doppleronline.ca\/huntsville\/the-geopolitics-of-energy-by-dave-wilkin-and-tim-lutton\/","title":{"rendered":"The Geopolitics of Energy ~ by Dave Wilkin and Tim Lutton"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p><strong>A mini-series on the future of energy<br \/>\nBy Dave Wilkin, P. Eng., M.Eng. and Tim Lutton, BSc., MBA<\/strong><\/p>\n<p>Our previous articles showed <span style=\"text-decoration: underline;\"><a href=\"https:\/\/doppleronline.ca\/huntsville\/the-energy-big-picture-by-dave-wilkin-and-tim-lutton\/\" target=\"_blank\" rel=\"noopener noreferrer\">carbon energy\u2019s dominance<\/a><\/span> both today and in the foreseeable future, highlighting those geographic regions most energy-rich or energy-insecure, and <span style=\"text-decoration: underline;\"><a href=\"https:\/\/doppleronline.ca\/huntsville\/growth-the-global-energy-drive-by-dave-wilkin-and-tim-lutton\/\" target=\"_blank\" rel=\"noopener noreferrer\">exploring the dynamics of growth<\/a><\/span>. Let\u2019s now delve into how geopolitics shapes the future of energy.<\/p>\n<div style=\"float: left; margin-right: 14px;\"><strong><broadstreet-zone zone-id=\"45658\" keywords=\"\" soft-keywords=\"true\" zone-alias=\"\"><\/broadstreet-zone><\/strong><\/div>\n<p>Energy superpower Russia holds 30 per cent of gas and 10 per cent of global oil reserves. President Putin wields this power effectively, with Europe being his primary target. He also meddles extensively in the Middle East (notably Iran and Syria) and lately oil-rich Venezuela and the disputed Arctic regions. President Putin is a master at it, looking for opportunities, and working against any constraints that put Russian energy at risk <a href=\"https:\/\/www.investopedia.com\/ask\/answers\/030315\/how-does-price-oil-affect-russias-economy.asp\" target=\"_blank\" rel=\"noopener noreferrer\">(<span style=\"text-decoration: underline;\">30 per cent of the Russian economy depends on it<\/span><\/a>).<\/p>\n<p>Despite decades of green policy efforts, high energy costs and high carbon-taxes, 81 per cent of Europe\u2019s energy demand remains carbon-based. Excluding imports, just two years of oil and six years of gas reserves remain, and <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.forbes.com\/sites\/markvenables\/2019\/06\/26\/the-exit-of-us-giant-exxonmobil-highlights-the-decline-of-north-sea-oil-and-gas\/#2c0a375023b1\" target=\"_blank\" rel=\"noopener noreferrer\">declining North-Sea oil<\/a><\/span> and gas represents 80 per cent of their reserves. Europe being dependent on Russian and Middle-East energy supply is bad enough, but it will worsen as competition from Asian energy demand grows, and if Middle Eastern reserves decline<span style=\"text-decoration: underline;\"><a href=\"http:\/\/blog.gorozen.com\/blog\/what-is-the-real-size-of-the-saudi-oil-reserves-pt-2\/2\" target=\"_blank\" rel=\"noopener noreferrer\"> sooner than many think<\/a><\/span>. Given these dependencies, it\u2019s no wonder the EU opposes US-Iranian sanctions and <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.theguardian.com\/business\/2019\/feb\/25\/nord-stream-2-russian-gas-pipeline-likely-to-go-ahead-after-eu-deal\" target=\"_blank\" rel=\"noopener noreferrer\">recently approved the controversial Russian Nord Stream-2 gas pipeline<\/a><\/span>. Energy insecurity fears from past <a href=\"https:\/\/www.forbes.com\/sites\/arielcohen\/2019\/02\/28\/as-russia-closes-in-on-crimeas-energy-resources-what-is-next-for-ukraine\/#51e8bb4e29cd\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"text-decoration: underline;\">Russian gas embargoes<\/span>,<\/a> Middle East unrest and OPEC price-fixing drives Europe\u2019s aggressive green-energy policies, including their pursuit of <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.theguardian.com\/environment\/2019\/jun\/20\/eu-leaders-to-spar-over-zero-carbon-pledge-for-2050\" target=\"_blank\" rel=\"noopener noreferrer\">\u2018net-zero carbon emissions by 2050<\/a>\u2019<\/span>.<\/p>\n<p>Asia\u2019s energy security of supply situation is almost as severe as Europe\u2019s. With over 90 per cent of their energy still carbon-based, and continuing rapid economic and population growth, Asia has less than four years of oil reserves, excluding imports. No wonder new <span style=\"text-decoration: underline;\"><a href=\"https:\/\/oilprice.com\/Energy\/Crude-Oil\/The-Clock-Is-Ticking-For-Chinas-Oil-Independence.html\" target=\"_blank\" rel=\"noopener noreferrer\">US-Iran sanctions rattle China<\/a><\/span> and others in the region. It also explains much of China\u2019s <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.thegwpf.org\/content\/uploads\/2018\/12\/China-U-Turn.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">multi-trillion dollar \u2018One Belt, One Road initiative\u2019<\/a><\/span> which pushes major energy infrastructure and development deep into the Middle East, Eastern Europe and beyond, with many Asian nations following close behind. China\u2019s <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.nytimes.com\/2019\/05\/24\/climate\/china-arctic.html\" target=\"_blank\" rel=\"noopener noreferrer\">Arctic \u2018Polar Silk Road\u2019 ambitions<\/a><\/span> seeks to access the estimated <span style=\"text-decoration: underline;\"><a href=\"https:\/\/geology.com\/articles\/arctic-oil-and-gas\/\" target=\"_blank\" rel=\"noopener noreferrer\">13 per cent of the world\u2019s remaining oil and 30 per cent undiscovered gas<\/a><\/span>. China also seeks to dominate <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.forbes.com\/sites\/dominicdudley\/2019\/01\/11\/china-renewable-energy-superpower\/#18f10e71745a\" target=\"_blank\" rel=\"noopener noreferrer\">renewable green-energy sector<\/a>s<\/span>, leveraging its manufacturing advantages, state-subsidies and, most concerning, rare-earth materials domination (owning <a href=\"https:\/\/investingnews.com\/daily\/resource-investing\/critical-metals-investing\/rare-earth-investing\/rare-earth-producing-countries\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"text-decoration: underline;\">85 per cent of global production<\/span><\/a>), critical in all things electrical. Asia\u2019s 80-plus years of coal reserves provides a <span style=\"text-decoration: underline;\"><a href=\"https:\/\/saltbushclub.com\/2019\/01\/21\/1600-new-coal-power-plants-worldwide\/\" target=\"_blank\" rel=\"noopener noreferrer\">low-cost energy backbone<\/a><\/span>, <a href=\"https:\/\/www.iea.org\/geco\/coal\/\" target=\"_blank\" rel=\"noopener noreferrer\">and <span style=\"text-decoration: underline;\">they lead in global coal consumption<\/span><\/a>. But there\u2019s a cost: air pollution tops China\u2019s environmental issues, <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.scmp.com\/news\/china\/science\/article\/2166542\/air-pollution-killing-1-million-people-and-costing-chinese\" target=\"_blank\" rel=\"noopener noreferrer\">killing an estimated one million people yearly<\/a><\/span>. There is no surprise relatively clean natural gas consumption <span style=\"text-decoration: underline;\"><a href=\"https:\/\/oilprice.com\/Energy\/Natural-Gas\/Cheap-Gas-To-Fuel-New-Global-Demand-Boom.html\" target=\"_blank\" rel=\"noopener noreferrer\">soared 18 per cent in 2018<\/a><\/span>. China is delighted to see western nations pursuing the elimination of carbon energy. Ultimately, they view energy and climate change through a self-interest lens, seeing both risk and opportunity\/advantage.<\/p>\n<p>The US is in the middle of a shale and tight oil boom, recently becoming the <span style=\"text-decoration: underline;\"><a href=\"https:\/\/oilprice.com\/Energy\/Crude-Oil\/US-Accounts-For-98-Of-All-Global-Oil-Production-Growth.html\" target=\"_blank\" rel=\"noopener noreferrer\">world\u2019s largest energy exporter and accounting for 98 per cent of global oil production growth<\/a><\/span> last year. The US views energy as a strategic lever in their economic supremacy battle with China. However, their oil boom will <a href=\"https:\/\/oilprice.com\/Energy\/Crude-Oil\/OPEC-Plans-Move-To-Seize-Market-Share-From-US-Shale.html\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"text-decoration: underline;\">likely be over within<\/span><\/a> a decade, then the US will face declining domestic reserves. Canada possesses most of the remaining global oil reserves outside of unstable\/undemocratic countries. No wonder the proposed <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.cbc.ca\/news\/canada\/calgary\/keystone-xl-montana-injunction-lifted-1.5165895\" target=\"_blank\" rel=\"noopener noreferrer\">Keystone-XL pipeline was approved by the Trump<\/a> administration<\/span>, and why it\u2019s in America\u2019s interests that new Canadian pipelines never reach tide-waters. The US is going to soon need our oil, and less competition for it is better for them. With only 13 years of North American natural gas reserves remaining, <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.eia.gov\/todayinenergy\/detail.php?id=37732\" target=\"_blank\" rel=\"noopener noreferrer\">growing demand<\/a><\/span> and excessive losses from <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.cbc.ca\/news\/canada\/calgary\/keystone-xl-montana-injunction-lifted-1.5165895\" target=\"_blank\" rel=\"noopener noreferrer\">shale-oil gas release\/flaring<\/a><\/span>, reserves could fall into decline sooner, particularly if US government energy policy shifts, scaling back new gas exploration.<\/p>\n<p>Finally, geopolitics played heavily in the 2015 Paris Climate Agreement. Fast-growing developing countries got emission reduction passes, ensuring continuing rapid economic growth. Carbon energy giants OPEC and Russia also got passes, allowing unfettered emissions plus intensive carbon energy production and export. Europe celebrated as other developed nations such as the US, Canada and Australia set totally unrealistic targets, seemingly leveling the economic playing field. <span style=\"text-decoration: underline;\"><a href=\"https:\/\/www.nytimes.com\/2018\/09\/09\/world\/asia\/green-climate-fund-global-warming.html\" target=\"_blank\" rel=\"noopener noreferrer\">Economic lagging countries got empty promises from rich countries to help<\/a><\/span> fund expensive fledgling green energy projects. The leaders declared success to cheering media, but with very little changes. It appears political theatre and national self-interest overrides any serious climate stewardship concerns. This pattern remains intact.<\/p>\n<p><strong><em>The Bottom-line:<\/em><\/strong> Geopolitics shapes the global energy future, but not in particularly good ways.<\/p>\n<p>Our next article will explore key technologies vying to lower energy Carbon Intensity<strong><em>. <\/em><\/strong>Watch for it!<\/p>\n<p><em><strong>Dave Wilkin is a Professional Engineer who lives in Huntsville. He is an electrical engineer with a career spanning 35 years in IT, banking and consulting.<\/strong><\/em><br \/>\n<em><strong>Tim Lutton worked in the natural gas and LNG industry for 32 years; with Imperial Oil in Canada, and ExxonMobil in the USA, Australia and Qatar and now lives in Huntsville.<\/strong><\/em><\/p>\n<h5 style=\"text-align: center;\">Don\u2019t miss out on Doppler!<\/h5>\n<p style=\"text-align: center;\"><strong>Sign up <a href=\"https:\/\/doppleronline.ca\/huntsville\/dont-miss-out-on-doppler\/\"><u>here<\/u><\/a> to receive our email digest with links to our most recent stories.<br \/>\nLocal news in your inbox three times per week!<\/strong><\/p>\n<p style=\"text-align: center;\"><broadstreet-zone zone-id=\"45657\" keywords=\"\" soft-keywords=\"true\" zone-alias=\"\"><\/broadstreet-zone>\n","protected":false},"excerpt":{"rendered":"<p>It appears political theatre and national self-interest overrides any serious climate stewardship concerns.<\/p>\n","protected":false},"author":13,"featured_media":65091,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5],"tags":[26,2007],"class_list":["post-74282","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commentary","tag-breaking","tag-energy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Geopolitics of Energy ~ by Dave Wilkin and Tim Lutton<\/title>\n<meta name=\"description\" content=\"It appears political theatre and national self-interest overrides any serious climate stewardship concerns.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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