The long era in which the Middle East was the global supplier of hydrocarbons is coming to an end.
Australia has designs on becoming the leading natural gas supplier for not only Asia, but the entire world. Indeed, the country has the offshore resources and the thirsty markets nearby in Asia to pass Qatar as the world’s top supplier of LNG.
However, Australia’s march towards energy superpowerdom is beginning to run into domestic problems—and new competition. Rising labor costs and high prices in Australia’s booming economy are making it unexpectedly difficult for the Aussies to export their gas and now energy-hungry Asian countries like China and Japan are starting to eye alternative and equally cheap gas from North America. The Financial Times explains:
The direction is clear: Asian prices are under pressure. Australia’s expensive bid for world domination is safe – unless Asian prices fall, and that is a real risk if significant US and Canadian exports begin. For a country with a goal as grand as overtaking Qatar, that is a precarious position to be in.
Whether it’s Australian, American, or Canadian gas that wins the race to the Asian market (and most likely, there is plenty of demand for all three), a few things seem clear:
(1) The long era in which the Middle East was the global supplier of hydrocarbons is coming to an end.
(2) A global switch from coal to natural gas is one of the most practical ways available for civilization to begin the transition to a new kind of energy market. Greens take note.
(3) Asia is not going to be self sufficient in either energy or food in the 21st century, which, from the standpoint of those who hope to see the world becoming a more peaceful and economically integrated place, is a very good thing. The rising Asian powers will need a healthy, stable and secure global system to feed their people and run their economies.
Otto von Bismark once said that the most important fact of the 20th century would be that the Americans and the British spoke the same language. The most important fact of the 21st century may well be that Asia and the English speaking world share a set of complementary interests in building a peaceful world system.