I’m convinced that energy is the #1 structural issue of our era. As a student of energy, I’ve tracked many recent public statements by Big Oil. One of the most revealing comes from a Davos talk this week by Shell Oil’s CEO. Shell is the world’s third largest corporation by revenue (Exxon being first. In fact, 9 of the 10 largest global corporations are either oil companies or automobile manufacturers.)
Following in Exxon’s recent admissions, Shell’s CEO Jeroen van der Veer is now admitting what many are calling “Peak Oil.” In his statement at Davos, van der Veer reveals that, very soon, “easily accessible supplies of oil and gas probably will no longer keep up with demand.” He cites 2015 as our Peak date – some analysts believe we passed “Peak” in 2007.
Jeroen sees two strategies to keep the energy flowing:
… a cautious ride, with some false starts, on a road that is still under construction. Whether we arrive safely at our destination depends on the discipline of the drivers and the ingenuity of all those involved in the construction effort. Technological innovation provides the excitement.
Like an off-road rally through a mountainous desert, it promises excitement and fierce competition. However, the unintended consequence of â€œmore hasteâ€ will often be â€œless speed,â€ and many will crash along the way.
Shell’s CEO sees two possible energy futures: (1) an exciting ride on a road that is still under construction with only marginal assurance of safe passage, or (2) a fiercley competitive off-road rally on tretcherous roads where many will crash and burn.
The CEO provides further details into these global energy scenarios – I encourage anyone remotely interested in our collective future to read this paper. I believe energy scarcity will be (and perhaps already is) the primary influencing dynamic behind world economics and the political decisions which follow.
Added: Short introduction to the concept of Peak Oil