Oil: A Bumpy Ride Ahead
By Ian Bremmer
(Excerpt) Over the next 25 years, the geopolitics ofoil will likely prove a bad news/good news story. The nearer-term bad news is that,while politically inspired upward pressure on oil prices will continue for the next several years, price fluctuations will be cyclical, undermining the sense of crisis needed for a focused global push toward the large-scale development of alternative sources of energy.
The good news is that, over the next 10 to 15 years, hydrocarbon alternatives— and the infrastructure needed to deliver them—will begin to come on line. A generation from now, global energy markets, less reliant on oil exports from dangerous places, will become much less vulnerable to the sort of system-wide political risks that can generate international upheaval.
For the next several years, political factors will continue to pressure energy prices from both the demand and supply sides. The sources of rising demand have become well known. Surging economic growth in emerging-market heavyweights like China and India has sharply increased their energy consumption, as industry in these countries expand their productive capacities—and as hundreds of millions of people move from poverty toward middle-class lifestyles.
The recent history of the automobile in
Ian Bremmer, a senior fellow of the World Policy Institute, is the president of Eurasia Group, a political risk consultancy, and the author of The J Curve: A New Way to Understand Why Nations Rise and Fall (Simon & Schuster, 2006).