I’ve been thinking about these questions increasingly in recent months. As I’ve read about major developing countries – with China being the best example – explore further afield for the raw resources that power their economies, it is often their state-owned companies at the helm. The fundamental acknowledgement that modern economies are based on large stores of relatively cheap and accessible fuels, and that this might be a basic guarantee that a country must provide, has implications that might drive the world economy away from ever-increasing neo-liberalism.
If you can agree that in much of the post-war period, enabled by an American military presence around the world, multinational companies flourished. Big integrated oil companies like Exxon, BP, and Chevron from the West explored all around the world, providing energy to hungry consumers in developed countries. However, the rise of the rest, as Fareed Zakaria calls it, has enabled many more people to become energy consumers. This is clearly a good thing, because so much of the world’s population is in energy poverty, without running water or lights in their home.
But in this landscape of increasing competition, we see the Westphalian state rear its head once again has the ultimate guarantor of social and economic stability. You saw that in the economic crisis, and you see it as China accumulates options on agricultural land in Africa or drilling rights in the South Atlantic. Energy is fundamental to society, and as countries increasingly jockey for position, we will most likely resource tensions rise.
The key, of course, is how to develop alternatives so that energy can be homegrown, with local engineers and farmers capturing the energy rich flows of the natural world. The brokered energy future is about the rush for fossil fuels which as of now have no large-scale substitute as energy dense, transportable, and tradable as they are. Fossil fuels are a wonderful resource whose externalities we unfortunately cannot afford. The cost for increasingly constrained sources of these fuels, increasing conflict, and contributions to climate change should continue to compel us to seek another path.