Energy and the Future

With the inclusion of oil deposits found in rock formations in its inventory of economically feasible reserves, in ten years the United States will once again be the world’s primary energy producer, as it was half a century ago. In less than twenty years it will be exporting derivative products. This will have important practical implications for the wider world: the world’s biggest consumer will no longer be dependent on providers with serious political issues. At the same time, those countries whose economies depend on supplying crude oil to developed nations will have to find another source of income. The U.S. dollar will appreciate in value, reducing the competitiveness of its productive apparatus. On another note, the move toward urban development, which is necessary to mitigate the accumulation of carbon in the atmosphere that gives rise to the greenhouse effect, will be delayed.

The change in the energy balance of the world’s biggest economy will also have other practical implications. It strengthens the ideal of an absolute autonomy in movement, with a great waste of resources and resulting costs involved that the price does not recover. In economics these are referred to as externalities. It involves not only an environmental impact that is not paid for by the user, but also results in the impoverishment of relations between people due to the distance inherent in lifestyles where suburban residence is prevalent. In these circumstances, people have reduced chances of meeting and therefore of affecting interaction. It is reasonable to defend emotional wealth as the main goal in life.

In economic terms, the issue of the exchange rate that the United States could face would be similar to what Colombia faces today, as a consequence of the mining and energy development strategy established by the government of Álvaro Uribe and cultivated by the current government. Industry in the United States, with a weaker currency, has competitiveness problems owing to the difference in workforce costs (although this has been somewhat mitigated by the “robotization” of production lines) and the cost of treating waste products and conforming to environmental laws; however, in contrast to Colombia, the U.S. has important growth advantages in knowledge and innovation.

Those countries whose economies depend on petroleum, such as Venezuela, must design models of sustainable development. The problem will be more dramatic in Arab countries that survive on the exportation of crude oil and whose workers are often brought in from India or Pakistan. In Colombia, the new deal means its exports will be less valuable and there will be fewer resources for government and more competitiveness in the manufacturing and agricultural sectors owing to a weaker currency. The abysmal institutional design is reflected in wasted money and corruption; given this current situation, the new prospect is clearly preferable.