Consequences of scarce oil to go far beyond costly gas

The Sakhalin affair received scant attention in the United States, the world’s largest consumer of oil. But it illustrates a future that will challenge not only companies such as Shell, but also America’s foreign policy, economy and individual consumers. It illustrates some stark truths that are operative now, not some possibility for the far future thrown out by wonks with bad attitudes. Higher prices at the gas pump may be one of the most benign outcomes.

Are we paying attention when Chevron says in its “real issues” advertising campaign, “Energy will be one of the defining issues of this century. One thing is clear: The era of easy oil is over”?
The long-feared “new competition” for energy resources is happening, and nobody knows it better than Russian President Vladimir Putin. To be fair to Putin, Shell had been criticized for its slowness in developing the challenging Sakhalin field, and there were some legitimate environmental concerns.

But Putin has made it clear that energy will be the weapon of the new Russia. Threats of energy cutoffs to its neighbors have been only one face of this strategy. Gaining clear control of Sakhalin is another. Meanwhile, China is spreading its influence around the developing world in the hunt for resources, supporting rogue regimes in Iran and Sudan in exchange for oil.


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