PLEA Network

14 January 2016, Energy Post, The oil pricequake will doom the global political order. Given the centrality of oil and oil revenues in the global power equation, it is inevitable that depressed oil prices will doom the current global political order, writes Michael T. Klare, a professor of peace and world security studies at Hampshire College. Political turmoil is already raging across the oil heartlands of the planet – and the tremors from the oil pricequake have yet to reach their full magnitude, notes Klare. As 2015 drew to a close, many in the global energy industry were praying that the price of oil would bounce back from the abyss, restoring the petroleum-centric world of the past half-century.  All evidence, however, points to a continuing depression in oil prices in 2016 – one that may, in fact, stretch into the 2020s and beyond.  Given the centrality of oil (and oil revenues) in the global power equation, this is bound to translate into a profound shakeup in the political order, with petroleum-producing states from Saudi Arabia to Russia losing both prominence and geopolitical clout. To put things in perspective, it was not so long ago – in June 2014, to be exact – that Brent crude, the global benchmark for oil, was selling at $115 per barrel.  Energy analysts then generally assumed that the price of oil would remain well over $100 deep into the future, and might gradually rise to even more stratospheric levels.  Such predictions inspired the giant energy companies to invest hundreds of billions of dollars in what were then termed “unconventional” reserves: Arctic oil, Canadian tar sands, deep offshore reserves, and dense shale formations. It seemed obvious then that whatever the problems with, and the cost of extracting, such energy reserves, sooner or later handsome profits would be made. It mattered little that the cost of exploiting such reserves might reach $50 or more a barrel. Read More here