The recent fall in oil prices has obscured another tendency: renewable energy and energy storage is fast becoming cheaper. In the lack of political will to face the global warming, this fall in the price of renewable energy is now our best hope to assure that much of the coal, oil and gas will stay in the underground, as it will only be profitable to exploit the deposits that are easy to access. We are not there yet, but we may come there faster than expected. So we may be at the turning point for fossil energy.
Thorbjørn Waagstein, Economist, PhD, since 1999 working as international Development Consultant in Latin America, Africa and Asia.
As oil prices have plummeted, the question has naturally come up: does this mean the end for renewable energies? Can they compete with this cheap fossil energy? The short answer is: yes, it will of course now be less profitable to invest in renewable energies. However, paradoxically, the longer story is more complex. Wind energy is already competitive with fossil energy, and solar has also passed the break-even point in more sunny places. And unlike non-renewable energy sources, the long run trend is towards falling costs. So we may be at a turning point for the fossil energy.
We have heard a lot of nonsense about oil the last couple of months. First we were told that the fall in the oil price would continue to 20 dollars per barrel or even lower – from 100 dollars less than a year ago. Secondly that the fall in the oil price would not affect the US shale oil and gas miracle – US technology and prowess would outsmart the low cost producers as Saudi Arabia. Then, when the number of active oil rigs in operation in the US fell to half, we heard that there was not any connection any more between drilling and production. Of course it now turns out that it is all just that: nonsense.
There is Argentina again defaulting on its debt, we are told. It shows that the big 2001 default and the posterior debt reduction in 2004-5, which has been touted by many (I, for one) as an alternative way for debt ridden countries, did not work, doesn't it? And it shows that the Kirchners instead of being the big saviours of Argentina have led the country into a dead-end, right? And all this has unravelled thanks to a stubborn US philanthropist, Paul Singer, and a courageous US judge, Thomas Griesa. Well, if you believe that story – and many do - you have got it all wrong. Singer and Griesa have made a frontal attack on Argentina, but they have overplayed their cards. Now, wait for the back-lash.
Real revolutionaries do not just seize power. They also break down the existing power structure of the state and construct a new one from scratch, substituting the old administrators with people from the revolutionary movement, expecting in this way to get rid of not only all the people from the old system, but also all the old ideas. This was the recipe for the October revolution in Russia in 1917. And this is the recipe that NATO has been using today. In Iraq. In Libya. In Syria. This seems to have been be very good for NATO – it has never looked stronger. But is it good for us?
The short answer is yes, very much so. And much more than it will hurt the EU or the US. Post-Soviet Russia is mainly a producer and exporter of oil, gas and raw materials. Just as Canada, Australia, Brazil, Chile and Venezuela. It has gone through a de-industrialisation after the dissolution of the Soviet Union and is now heavily dependent on imports of almost everything. It is the world sixth biggest economy, but it is too small to survive isolated. So sanctions will hurt a lot. But they may also have unintended consequences. Some of them could actually be quite interesting.
The chemical attack on the rebel held Damascus suburb Eastern Ghouta on August 21 last year brought us very close to a US attack on Syria. It was called off in last minute, after Russian President Vladimir Putin brokered an agreement with the Syrian Government to give up its chemical weapons. But who was behind the Ghouta attack? The US and most Western countries have no doubt: it was the Syrian Government. Russia - after some dithering - ended up pointing to the rebels. However, proofs are very scarce for either accusation. So it leaves at least some of us with an unpleasant feeling of having being taken for a ride – once again.
The US has during the last couple of years blocked Chinese technology firms from entering their market. One of the targets has been Huawei, one of the world's leaders in communication equipment. According to Michael Rogers, chairman of the House Permanent Select Committee on Intelligence, “Huawei and ZTE provide a wealth of opportunities for Chinese intelligence agencies to insert malicious hardware or software implants into critical telecommunications components and systems”. The reason, it becomes clear now, is that this is what NSA makes US companies do. This validates the old saying: Thieves believe everybody else steals.
The story looks simple: The Ukrainian people, fed up with a corrupt and authoritarian government, revolts and chases the President out, reestablishing democracy. Unfortunately they have a big neighbour. Russia, governed by an authoritarian President, Vladimir Putin, who dreams of restoring the Tsarist-Soviet empire. So Ukraine is bullied, a Ukrainian Province (the Autonomous Republic of Crimea) is occupied by the Russians and now the Russians are starting to destabilize the country by all means, threatening to annex the South-Eastern part of the country. And isn't this exactly what Hitler did in 1938 when he annexed Sudetenland, part of Checoslovakia, and later on the rest of the country? As we all know, that led to the Second World War, because the rest of the World was not standing firm against Nazi-Germany at this crucial moment. The implications are straightforward.
The problem with this story telling is that it is too simplified, and the historic parallel is flawed.
Despite much talk on President Assad's imminent fall a year and a half ago, and then the last year or so of a “stalemate”, it is now for everybody to see – whether we like it or not - that the present phase of the Syrian civil war is nearing its end, unless there is direct military intervention from abroad. The apparent decision by the US to provide the rebels with more sophisticated weaponry will only slow this process, not change the outcome. The big question is, however, what comes next?