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Geopolitics and Energy | Russell T. Rudy Energy LLC

“Stratfor Global Intelligence” recently featured a well-researched and interestingly written article by Robert D. Kaplan entitled “The Geopolitics of Energy”.  According to Kaplan, every international order in modern times has been based on an energy resource.  He cites the British Empire and coal, and the US and petroleum as examples.  He postulates that the shale gas boom in the US could assure our continued pre-eminence in world affairs well into this century.

Kaplan cites the work of Mohan Malik who sees the world energy market of the future as dominated by Asia as the growing energy consumer and the US/North America as the growing producer.  Malik projects 85% growth in energy demand over the next 20 years in the Indo-Pacific region with China being the initial driver, but eventually falling behind India.  Much of this demand will be met by supplies from the Middle East.

Concurrently, in the Western Hemisphere, Malik sees the US emerging as an energy producing giant in its own right, with shale oil production more than tripling between 2010 and 2020.  If the US were to open up drilling on both coasts, the US and Canada could be energy self-sufficient.  In the last decade shale gas alone has grown from 2% to 37% of US natural gas production.  US oil and gas in combination with Canada’s oil sands and Brazil’s pre-salt oil reserves could make the Americas “The New Middle East”.

At the same time Russia seems to be shifting its energy export emphasis to China with Japan as a hedge.

Growth in Asian demand and the increasing dependence on Middle East oil make shipping lanes in the Indian Ocean, the South China Sea and the East China sea critically important.

Kaplan sees the current tension between an economically stagnant Europe and a troubled, autocratic Russia leading to the decline of Greater Europe, while at the same time North America and the Indian Ocean basin are in their ascendancy as pulsating centers of commerce.

To learn more about Kaplan’s world view, please visit www.stratfor.com .