Something has happened, or rather is happening, that will in all likelihood change the world we live in, affecting worldwide economics and the international geopolitical equation. Kings and tyrants may fall and the ‘balance of power’ change significantly in many parts of the globe. But you probably will not have read about this pending great transformation in the Kenyan press, although it will affect us too.
So what is this world-changing development?
XI JINPING AND CHINA’S COMMUNIST PARTY’S CENTRAL COMMITTEE?
Well it is not the recent change of guard in China’s Communist Party’s Central Committee where 59 year-old Xi Jinping succeeded Hu Jintao as party general-secretary. The seven man committee is older and more conservative than its predecessor. Dramatic change in China, at least from the top, is unlikely in the foreseeable future.
BARACK OBAMA RE-ELECTED?
It is not the re-election of President Barack Obama either. His victory was welcomed by Kenyans but his second term in office will be unlikely to change the United States or the world for that matter. The US Senate is controlled by the Democrats (who increased their numbers at the election) but the House of Representatives is controlled by a strong Republican majority.
TULLOW’S DISCOVERY OF MORE OIL IN TURKANA?
Nor is it the discovery of potentially more oil reserves in Kenya announced yesterday by the Tullow Oil Company who have drilled into 30 meters of vertical oil depth at the Twiga 1 site in Turkana County, 20 kilometers north from its earlier oil discovery at the Ngamia 1 well. It is too early to tell the extent of Tullow’s recent oil finds, or their likely long-term impact.
The subjects of China, US politics and oil, are however related to development to which the Kenya Forum refers. China’s growing ascendancy in the world however, may well be changed as a result; the US economy, its standing in the world and its interrelation with regions and countries may well change; and it is about oil (and gas).
HYDRAULIC FRACTURING (FRACKING) AND SHALE
Only as short a time as eight years ago the United States faced the long-term prospect of its own oil stocks running out and of becoming ever more dependent on supplies from other parts of the world: then came ‘fracking’ and increasing crude oil prices.
The US has vast deposits of shale, fine grained sedimentary rocks from which can be extracted oil and gas. This didn’t use to be commercially viable but with the rising cost of oil and the development of ‘hydraulic fracturing’, or fracking, the use of pressurised fluid to force the oil and gas out of the shale, suddenly the dynamics changed.
US ENOUGH OIL AND GAS FOR 100 YEARS
In 2004 the US produced no oil and gas from shale, now it supplies 30 per cent of the market. The shale deposits in the Appalachian states of West Virginia and Pennsylvania and further west in North Dakota contain enough oil and gas to supply the US for 100 years and looks set to transform the US within 10 years into the world’s biggest supplier of oil and gas, employing over 600,000 people at home and changing Uncle Sam’s outlook on the world, world economics and geopolitics.
CHEAP US ENERGY WILL ALTER THE WORLD
So what could be the knock-on effects of this development?
As the US becomes less dependent on oil supplies from other countries the position of some Arab rulers who have so far avoided the ‘Arab spring’ may become more precarious as they lose US support.
US troops could find themselves heading home from foreign (oil) fields and less likely to be sent abroad again in future.
China and India, largely dependent on Middle East oil may now look to the US for supplies, altering in particular China’s relationship with the United States.
Russia, largely dependent on its oil reserves and high energy prices to fuel its own economy will feel the economic cold as oil prices fall with more abundant supplies becoming available.
THE WORLD JUST CHANGED
The Middle East changed; a rampant Chinese economy reined in; India dependent on the USA for fuel; Russia down the US up; the demise of the automobile put on hold for another century. All this and much more could result from the fracking US shale development.
The world just changed and the Kenyan media missed it but now you know.
Related article: ‘Cheap US energy will alter world’, The Guardian Weekly, 23-29 Nov. 2012