The craziness of our future energy prospects
I’ve had the privilege of seeing analyst Peter Zeihan speak several times, and his discussion, “Geopolitical Analysis of Global Economics and Energy,” at the recent Industry and Economic Outlook Conference held by the National Fluid Power Association in Chicago was truly fascinating.
Zeihan feels that the U.S. is a country uniquely positioned in the coming decades—and there will be a lot of prosperity here for manufacturers. Probably our biggest challenge is the digesting of the large boomer generation into retirement, but in 15 years, we’ll have accomplished that. At that point, Generation Y (which is larger than the small Generation X) will be in their prime working years and thus propelling us forward.
Even more importantly, the continual technological advances in fracking are bringing about some interesting changes. The costs are dropping and will continue to do so. Currently, prices are approaching the levels of Middle Eastern oil production. Zeihan said that the U.S. can expect 30 years of cheap natural gas, and realistically, it’s probably much closer to 60 years, simply with the technology we have currently. But add on to that the fact that people drive less as they age and retire—and the bubble of the boomer generation means we’re looking at a minimum of 20 years of year-on-year decline in energy needs. He said that by 2017, we will be energy independent as a country.
Think about the ramifications. We’re entering an era where we don’t see energy as a concern anymore. Now it can be a tool in our future international relations … what a strange turnaround from the 1970s.
What does this all mean for you, in your company? (And for where you invest your individual retirement funds, for that matter?)
Zeihan said that there are some bright spots in various industry sectors, due to this continued lowering of domestic energy prices. Ones related to natural gas are midstream/ downstream production, petrochemicals, fertilizers, desiccants, plastics and moldings, paper, tires, glass, insulation, antifreeze, detergents, cosmetics, paint, diesel, adhesives, fire extinguishers, water treatment and distribution. And ones related more directly to electricity are retail consumption, chemicals and plastics, petroleum refining, paper and paperboard, metals manufacturing, food processing, plastics and rubber, and aluminum.
Filed Under: DIGITAL ISSUES • DESIGN WORLD
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