JUST FRACKING AROUND

Or how about: “F…. you buddy. I got what everyone wants.” Fracturing shale or “fracking” has revealed a new and potentially harmful (for the environment) source of oil and natural gas. Everyone is fracking. The latest entry into the field is Argentina, which sorely needs a new capital base. But so does China, where their total dependency on imported petroleum may disappear. North Africa and the Middle East have millions of potential barrels of shale oil. The world is turning upside down. Ukraine and Russia are also thought to have sizable shale fields of oil and gas, as do many North African and Middle Eastern countries. I even hear that Israel may also have frackable shale oil reserves. Brazil has found huge deposits offshore. They don’t have to “frack” it. Just drill baby drill and out comes the black gold. Everyone is in on the game. It’ll be every frackin’ guy for himself!”

On the serious side, we can no longer speak of ”energy geopolitics” in the same way. If America got into a fight with Iraq it was not to overthrow the guy who was once their friend – Saddam Hussein – it was to guarantee access to Middle East treasure. Not since Bismarck coined “Realpolitik” has there been the possibility of a seismic shift in international maneuvering. Energy geopolitics suggests the end of future price rises.

What should really worry everyone is not just the potential ecological damage done by fracturing shale. But the fact that new oil supplies will bring the price down reducing the need to work at renewable energy.

Therein lies the fatal flaw. The marketplace decides. When oil hit $150 a barrel, the electric car, in spite of its high cost, was going to be the alternative. Wind power seemed to have a big future, so much so that L. Boone Pickens, the consummate oil man, was promoting massive wind facilities. He backed off when the price of oil went down. Everyone with a short memory, and that’s almost all of us, suddenly went for the “bargain” oil and gasoline. Why spend a fortune on a car that uses to gas when the price of gas has come down? That is reality.

What can break the stranglehold of the “realities” of the marketplace? Certainly not public demand for product. There must be public demand to make the planet independent of oil. No company with a keen eye on the bottom line will make the necessary move. Why should they?

Only government and its will to make the Earth a better place can make it happen. All those libertarian critics of “big” government are writhing at the thought. Even they will have to come to understand that only government, acting not for profit, but for the public good, can make the moves. It does happen. In B.C. they have a successful carbon tax. In the U.K. they have done it too. Germany is bound to follow, perhaps to lead, as governments insist that long-term we have to stop using fossil fuels. And, as I wrote a few weeks ago, New York’s mayor Bloomberg is going to convene a conference with the world’s 40 largest cities to change people’s minds. He believes people can be persuaded that the long term gain is worth the cost.

Meanwhile, the bonanza is here. It will be hard to stop. There will be cries of: “Business does well when the government lets it do what it knows how to do.” The advocates for a free and open marketplace will have their way.

Unless….