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By Global Public Square staff
Since the financial crisis of 2008, the global economy has been in slow motion. As a result, commodity prices have fallen dramatically. But there was one great puzzle – the price of oil had continued to go up, up, up.
In 2007, before the crash, oil cost $72 a barrel on average. By 2012, Brent Crude was trading at over $111 a barrel on average, a second year of historically high levels, according to the U.S. Energy Information Administration.
Well, now the trend has turned. Prices have dropped, dramatically. Last week, Brent oil, the global benchmark, fell to about $80 a barrel, nearing a four year low.
Well, today the world is awash in oil. There's too much supply and too little demand. The world's largest and second largest economies are probably the most responsible. That would be the United States and China. The China piece of this story is fascinating. FULL POST
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The crisis in Iraq and Syria, fueled by oil. The crisis in Ukraine, greatly complicated by natural gas. So what if we lived in a world that was powered by something other than these hydrocarbons we are so dependent on. That's a world that Vinod Khosla is betting on, quite literally. Khosla was the founding CEO of Sun Microsystems. He now runs his own firm, Khosla Ventures, and is the 352nd richest person in America, according to Forbes. In recent years, most of his energy has gone into finding promising alternate energy technologies, and investing in them.
Watch the video for the interview for his take on the future of alternative energy.
By Maha Hosain Aziz, Special to CNN
Editor’s note: Maha Hosain Aziz is a professor of politics (adjunct) in NYU's Graduate School of Arts and Sciences and a senior analyst at geopolitical consultancy Wikistrat. The views expressed are her own.
Ask most Americans which country is the world’s largest oil producer is, and you will likely hear some familiar names – Saudi Arabia, Iran and Iraq. Some might suggest Russia, which produces more than 10 million barrels a day. Yet according to recent numbers from the International Energy Agency and Bank of America, it’s another country has taken the lead in global production – the United States. And this new reality raises an interesting question: Is this the beginning of the end of former number one Saudi Arabia’s global oil dominance?
In recent years, everyone from Citigroup to Chatham House has suggested Saudi Arabia – the world’s biggest oil exporter – could face oil shortages in the next 10 to 15 years, prompting many to ask whether the country and its heavily oil-dependent economy are prepared for the potential crisis.
The answer is yes, and no. Local energy demand has skyrocketed, and could increase by 250 percent by 2028, largely due to a population boom that has seen the Kingdom’s population jump from six million in 1970 to over 29 million today. This in turn has prompted the state to explore oil alternatives for domestic energy use. Indeed, in June, Saudi Arabia and the United Arab Emirates reportedly signed an accord to jointly develop renewable energy and clean technology. In addition, Saudi Arabia has indicated it hopes to become a key market for renewable energy by 2032, with a projected third of the country’s power to come from this source. FULL POST
By Peter Schechter and Jason Marczak, Special to CNN
Editor’s note: Peter Schechter is director and Jason Marczak is deputy director of the Atlantic Council’s Adrienne Arsht Latin America Center. The Center recently published a report titled “Uncertain Energy: The Caribbean’s Gamble with Venezuela.” The views expressed are their own.
Chinese President Xi Jinping arrived in Caracas last week with a new $4 billion gift for a country desperately looking to external financing to keep its economy afloat. The catch? Venezuelan President Nicolás Maduro reportedly must send China an additional 100,000 barrels per day (bpd) of oil in addition to the more than 500,000 bpd of crude it is already providing to China.
With Venezuela’s production in decline, this latest announcement calls into question the long-term viability of Venezuela’s Petrocaribe oil alliance and the energy future for the Caribbean and Central American states that depend on it. The United States must act to proactively prevent a crisis off our shores. Vice President Biden has taken initial steps to lead this effort, but more must be done.
For nearly ten years, some of the United States’ closest neighbors have used Petrocaribe – Venezuela’s financially attractive energy alliance and Chávez’s brainchild – to procure flexible credit terms to purchase crude oil and petroleum products. But Venezuela’s economic situation is dire, putting the benefits of the oil alliance at risk. Central American and Caribbean states will have little recourse if credit dries up, and the alliance’s government ministers, business leaders, and consumer advocates privately fret about how continued dependence on Venezuela for energy supplies might come back to pull the rug from under their economies. FULL POST
By Will Marshall, Special to CNN
Editor’s note: Will Marshall is the president of the Progressive Policy Institute. The views expressed are his own.
No country has embraced renewable energy more avidly than Germany. But a host of untoward realities – soaring electricity bills, rising carbon emissions and growing dependence on Russian gas – are intruding rudely on Germany’s green dream.
In response to such worries, Chancellor Angela Merkel’s cabinet approved a plan last week to trim subsidies for solar and wind power. The proposed law would also exempt fewer companies from paying a stiff renewable energy surcharge, an exemption that has come under heavy fire in Europe for giving German industry an unfair competitive boost.
In truth, the proposed energy reform law would merely slow down Germany’s drive toward green energy. It doesn’t alter the visionary (some would say utopian) goals of the country’s policy of Energiewende, or energy switchover. Launched in 2000, when Social Democrats ran the government, the Energiewende calls for abolishing nuclear power and envisions renewables providing 80 percent of Germany’s power by mid-century.
By Russ Carnahan and Michael Shank, Special to CNN
Editor’s note: Russ Carnahan was a U.S. Representative from Missouri and a member of the House Foreign Affairs Committee. He is now a partner at Carnahan Global Consulting, a consultancy that also advises firms in the energy sector. Michael Shank is associate director for legislative affairs at the Friends Committee on National Legislation, the advocacy arm of Friends (Quakers) in the U.S. The views expressed are their own.
At the heart of the ongoing crisis in Ukraine is the question of energy independence and energy security. We’ve witnessed this before in previous violent conflicts – whether in the Middle East, Central Asia or North Africa. Energy wars are real and they will continue to dominate our geopolitical agenda for the coming years unless the United States and its allies decide to act.
In discussions with our European Union counterparts in Berlin and Warsaw in the past month – as part of a U.S.-E.U. transatlantic dialogue on, among other salient topics, the annexation of Crimea – energy was very clearly at the core of this conflict. There was also consensus that the present moment couldn’t be a more historic opportunity to ensure an energy transition happens – and soon – lest more wars be fought, more territories acquired, or more people literally left out in the cold. The urgency of this effort cannot be overstated.
To be clear, when it comes to energy security and energy independence, anything that’s got a valve on it and has to be transported thousands of miles across borders decreases a country’s capacity for stability. That pipe – whether carrying oil or gas – is a target for acts of sabotage, political and physical. In 2009, for example, Russia turned off the spigot to gas exports to Ukraine, leaving the country out in the cold in the dead of winter. The Keystone XL pipeline in the U.S. is proving similar in serving as a political target, whether erroneously or accurately.
By Christiana Z. Peppard, Special to CNN
Editor’s note: Christiana Z. Peppard Ph.D. is assistant professor of theology and science in the Department of Theology at Fordham University and a Public Voices Fellow with The Op-Ed Project. The views expressed are the writer’s own.
World Water Day today is as good a time as any to consider one of the most important issues you’ve probably never pondered before. It’s a subject you’re going to hear about all the time in the coming decades. Oil and gas are important, yet there is one resource that is irreplaceable, but which is going to become increasingly scarce, with serious implications for agriculture, health, our economies – even civilization itself.
If you live in the longitudinal belt of the United States between Nebraska and Texas, then the water used for those fields – and now the suburbs – comes from the Ogallala Aquifer. Unfortunately, it’s depleting and polluted. Or perhaps you live in Israel or the West Bank, atop the Mountain Aquifer. There, a new study by NASA and University of California Irvine charts how groundwater depletion is accelerating. Likewise, Maryland residents may be surprised to learn that last year, the U.S. Geological Survey found the dwindling Patasco Aquifer to be over a million years old.
By Sultan Ahmed Al Jaber, Special to CNN
Editor’s note: Sultan Ahmed Al Jaber is United Arab Emirates special envoy for energy and climate change and CEO of Masdar, an Abu Dhabi-based renewable energy initiative. The views expressed are his own.
Four months ago today, U.S. President Barack Obama declared a state of emergency for five states and the District of Columbia over the approach of Hurricane Sandy. The super storm was a reminder that climate change is blind to faith, socio-economic status and geography. It also underscored that supplying cheap, sustainable energy and mitigating climate change is not a challenge for future generations – it is our challenge today.
And energy-rich nations have a shared responsibility to do more. After all, they have the financial and technical ability, as well as decades of expertise, to create the necessary growth of a new energy industry balanced by renewable sources of power.
This is the fifth in a series of entries looking at what we can expect in 2013. Each weekday, a guest analyst will look at the key challenges facing a selected country – and what next year might hold in store.
By Jonathan Kay, Special to CNN
Editor’s note: Jonathan Kay is the Managing Editor for Comment at Canada’s National Post newspaper and a fellow at the Washington, D.C.-based Foundation for Defense of Democracies. Follow him @jonkay. The views expressed are his own.
Canada is in a fortunate position relative to other developed Western nations. Our government is stable. Our budget deficit is small. Our real estate market is healthy (if somewhat overheated). And unemployment is relatively low. Only the occasional flourish of Quebec separatism keeps things lively in the Great White North. The biggest challenge my country will face in 2013 – and for many years after that – will be the problem of plenty. Specifically, how will Canada manage its large and growing oil wealth?
Canada currently produces just over 3 million barrels of oil per day (b/d), making us the world’s 7th largest producer, and the single largest supplier of oil imports to the U.S. market. Thanks to the ongoing expansion of Alberta's oil sands, production is expected to more than double by 2030, to 6.2-million b/d, transforming Canadian into an energy superpower.
By Michael Levi, CFR
Michael Levi is director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. This entry of Energy, Security and Climate originally appeared here. The views expressed are his own.
A new term has been getting a lot of play in recent weeks. The International Energy Agency (IEA) kicked things off when it projected that the United States will be “almost self-sufficient in energy, in net terms” by 2035. The idea of “net energy self sufficiency” has gotten play everywhere from The Economist to Scientific American. Even a State Department blog has trumpeted projected developments using similar words.
All of this is enough to make one wonder what net energy self sufficiency means. These reports and analyses all define it the same way: the energy content of whatever energy the United States imports will be less than (or equal to) the energy content of whatever energy the United States exports. “Net imports” will thus be zero or lower.
On "Fareed Zakaria GPS" this Sunday at 10 a.m. and 1 p.m. ET – debating the natural gas boom.
By Peggy Williams, Special to CNN
Editor’s note: Peggy Williams is editorial director of Hart Energy, an energy publisher that advises natural gas companies. The views expressed are her own.
As nations seek alternative fuel sources in an effort to reduce petroleum use, the world is paying increasing attention to natural gas as an efficient option. Multi-stage fracturing and horizontal drilling have allowed natural gas supply to grow in North America, and if these techniques continue to be implemented, the door will be open for a number of countries to start producing potentially vast amounts of energy.
Consider Russia, which has the largest amount of recoverable natural gas in the world – more than 4,500,000 billion cubic feet of natural gas, not including potential undiscovered resources in the region. Between Russia and Siberia, there’s a mean of 1,385,046 billion cubic feet of undiscovered natural gas, offering impressive potential for expansion.
Fareed Zakaria GPS is premiering its fourth and final edition of its “Global Lessons” series, tonight at 8 p.m. Eastern and Pacific. Powering America looks at how to quench the country’s growing thirst for energy – cheaply and cleanly.
In the next decade, the world will consume 50 percent more energy than it does today. How can this need be met without a devastating impact on the world’s climate? Is the solution wind energy? Solar? Nuclear? Shale gas? Efficiency? Or something entirely new?
The Global Public Square is where you can make sense of the world every day with insights and explanations from CNN's Fareed Zakaria, leading journalists at CNN, and other international thinkers. Join GPS editor Jason Miks and get informed about global issues, exposed to unique stories, and engaged with diverse and original perspectives.
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