<This post was originally intended to be on-line on September 2011 as the Lybian Revolution was drawing to a close>
With the unrest in Libya coming to an end markets are wondering how long it will take for the country to resume oil production at full capacity. The northern African country boasts the largest reserves in Africa and one of the largest among Arab countries, a region that has dominated global oil output for decades. But rising oil prices, continued instability in the Middle-East and technological developments are driving the exploration of new oil fields and allowing the exploitation of non-conventional sources threatening the almost complete hegemony of the Arab countries.
In 2006 Brazil announced one of the largest discoveries in the last 30 years in the Santos Basin. The original estimates for its reserves have been washed aside by ever increasing figures: although the official (conservative) estimates are currently at about 50 billion barrels (which would make it the tenth largest in the world), many experts suggest the real figure is more than double that: 123 billion barrels. In 2009 Dilma Rousseff herself publicly stated that the Tupi might hold up to 100 billion barrels, which would make it third only to Saudi Arabia and Iran.
The much disputed region of the Falklands has also been the center of renewed interest: with an estimated 60 billion barrels in reserve it can potentially become a larger producer than Lybia.
And then there's Canda. Oh, Canada! Canada, which has almost no oil - at least not in the traditional sense. What it does have though, are tar sands. And lots of it. Tar sands, or more correctly bitumen sands, is a mixture of heavy oil mixed, sand, clay and bitumen. Until recently, the extraction of oil from this asphalt-like substance was financially impossible and therefore largely ignored. But the depletion of conventional resources and the rise in prices has made the extraction commercially viable. Many countries have tar sands, but none have them in the scale that Canada has. How much oil is that exactly? 178 billion barrels, making it the second largest reserve in the world.
But the fun doesn't stop there. Oh no...that is only what is recoverable with today's technology. Of course, as technology develops and facilitates the extraction process while driving costs down, the total amount that can be used is bound to increase. And by an exponential figure it turns out: the CEO of Shell Canada stated in an interview there might be as much as a 2 trillion barrels.
There also the developments in the United States where advances in fracking technology are allowing for the developments of new oil deposits. The Bakken formation in North Dakota holds an estimated 4 billion barrels of recoverable oil, with potential for total reserves of between 18 to 24 billion barrels.
Peak oil? I don't think so.
Yet we are living in a time of change as we realize the toll of our oil addiction on the environment, and nowhere has this dependence been more obvious than in our reliance on motor vehicles. The paradigm shift we are undertaking, from combustion engines to electric power centers on core piece of technology: the Lithium-ion battery. Li-ion batteries not only power your car: they power your cellphone, your camera, your iPod...Although they still account for a small amount of total portable power consumption, this is bound to increase over time - they already account for 65% of secondary and 30% of primary batteries in Japan alone. And where does the majority of Lithium come from? Latin America: Chile, Argentina and Bolivia control up to 85% of total reserves (Argentina 10%, Chile 25% and Bolivia well over half of the world's total deposits).
The consumption of lithium for power generation doesn't stop there: lithium is a key component for all planned nuclear fusion reactors that will one day power our cities. The main reactor types being designed today (the Magnetic Confinment Fusion and the Inertial Confinement Fusion reactors) will require a special material called tritium as part of its fuel. The problem is that tritium is not very common on earth so scientists must artificially produce it from -you guessed it- lithium.
Nevertheless, with the commercial usage of fusion reactors still quite a few decades away, and non-withstanding Fukushima, the wider consensus is that the expansion of nuclear energy as part of our energy matrix is the only alternative to meet our ever growing power demand. Although lithium is also partly used in fission reactors, we all know that uranium is their primary fuel. Australia boasts by far the largest deposits, yet Canada is estimated to have the third largest reserves after Kazakhstan. Combined with Brazil and the United States, these American countries represent a quarter of global reserves.
As this silent revolution unfolds, it will undoubtedly shift back some of the power that has migrated Eastwards back to the Western hemisphere and could have severe consequences for the stability and development of the Middle-East; for which the Arab nations are ill prepared.
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