What Happened To Latin America’s Oil in 2015?
Erasmo Calzadilla
HAVANA TIMES — The 2016 first International Energy Agency (IEA) oil market report has just been made public.
Last year, we reviewed the data supplied by British Petroleum and shared our concerns here. Oil production in Latin America has been falling in linear and stable fashion for more than a decade. The problem is a serious one for several reasons:
- It is the most heavily consumed energy resource (accounting for nearly 50 % of the total)
- It is one of the main sources of export revenues
- Its consumption increases proportionately to the population and “progress.”
- In many areas and sectors, oil cannot be substituted with other sources of energy
Using data from British Petroleum and a spreadsheet, we can trace different tendencies and conclude that, unless significant changes are made, oil consumption and production in Latin America will cross and begin to drop in tandem at the close of this decade.
An event of this nature could mark the end of progress and development in the region, in the modern and Western sense of these terms. Will it actually happen? In the long run, there’s no doubt about it, but, in the short term, we may be seeing surprises that prolong the agony or bring about the worst of scenarios. What do recent reports have to say about this?
In 2014, we saw a recovery led by Brazil. Many got their hopes up. Last year, however, we got back on the downward road.
To common sense, sustained by the disinterested help of the press, the drop in oil production is owed to the collapse of prices and the resulting market adjustments. In Venezuela’s particular case, it is chalked up to the inept and corrupt intervention of the Bolivarian government.
But no, one need only take a look at the graphs to understand that the industry’s twilight began well before the drop in prices and that, in Venezuela, began before the Chavez government.
To date, production has been decreasing in stable fashion, at a pace that is almost immune to the different financial storms (which is to be expected, as oil is a non-renewable, essential resource that’s exploited in a continuous manner). The dramatic decrease in the number of active rigs, stemming from the current crisis, could however plunge us into a much steeper decline or prompt an irreversible collapse.
We can draw one conclusion from all this: at this crucial juncture, we are deciding the course of history but are not aware of this. If we managed to grasp what’s coming, we could prepare to attenuate the impact and rescue the best of civilization. If we continue to act in alienated fashion, we are doomed to utter collapse.
By Demian Morassi and Erasmo Calzadilla.
Within that decade, technology will have advanced solar photovoltaics to the point that energy derived from that source will be much cheaper than fossil fuels ,
This cheaper-than oil/coal source is already cheaper in parts of the world where fossil fuels cost more due to transportation and other costs.
We (this planet) will have smarter-than-human (STH) AI by the mid-2020s . In the lead-up to that time solar will still continue to advance in producing more electricity more cheaply. After the coming of STH AI we humans may well be finished inventing what comes after that development.
As homo sapiens we have succeeded in evolving to a point where we are just intelligent enough to create something smarter than we are .
This will change the world and a cheap, clean source of power will no longer be a dream .
What follows from that is cheap hydrogen fuel for vehicles , clean water for the world and an abundance of life’s necessities.
Read Martin Ford’s “Rise Of The Robots: Technology And The Threat Of A Jobless Future and Peter Diamandis’s ” Abundance: The Future Is Better Than You Think” for some solid information on where we’re going.
From all I’ve gleaned from the eight books and countless online articles I’ve read over the past 4-5 years , the future will be far better than I could have imagined .
Some techies are calling the coming changes-through-technology the ” Rapture Of The Nerds: meaning that the human race will experience a golden age of humanity analogous to the Second Coming/ Return to the Garden of Eden but through technology and not through any divine intervention.
IMO and that of many others the concept of God will also disappear with the better educational technologies that are coming.
Scientists in both the USA and Europe are working on mapping the human brain much as they mapped out DNA , each working on different approaches and ultimate uses for the data. . One of the uses will be to improve teaching dramatically.
Buckle up your seat belt,
Oil is the most efficient transportation currently in mass use. It will be a long time before it can be replaced. However, a problem these economies have is that they need to advance beyond exporting commodities. This involves building modern knowledge based economies.
The current drop in oil prices is due to Saudi Arabia’s decision to flood the market with cheap oil. Their goal is two fold: firstly, they want to hit their arch-rival Iran where it hurts. Secondly, the Saudis want to shut down, or at least knock back, the US shale oil industry which has in recent years turned the US into a net exporter of petroleum. As a side effect, the collapse in oil prices has crushed the Venezuelan economy. In time, the Saudis will cut back on production & the price of oil will again rise. Markets go up and down and up again.
Erasmo wrote above,
“The dramatic decrease in the number of active wells, stemming from the current crisis, could however plunge us into a much steeper decline or prompt an irreversible collapse.”
Wrong. The decline in active wells will change once the price of oil makes the production from these wells economical again.
Furthermore, there are significant shale deposits in Brazil, Paraguay, & Argentina which will in time be exported for oil & gas production. When the price of oil is high enough again, these unconventional resources will become economical.