Radical Noesis - Thinking outside the box

We already talked many times about OPEC and how it's probably peaking right now ([1] , [2]): but what we are interested in at the moment is the political and economical strength that this kind of organizations have shown through the years, starting from the well know 1973 energy crisis.

Today this situation is changing: even the majority of OPEC members are now acknowledging that they have little, if any, excess pumping capacity and therefore very little influence on crude prices - thus losing their main political weapon.

But for one cartel that loses prower, don't worry, there's always a new one ready to take its place.

If oil addiction is the most talked about, it's not the only one our society has: just different - but no less strong nor dangerous - is our insatiable need of gas, a source of energy that already provides 20 percent of America’s electricity and heats more than half of U.S. homes (including 70 percent of all new homes). Moreover in the U.S. there's currently no overlap between oil (used mainly for transportation) and gas: but as oil prices keep on rising and the (maybe unconscious) idea of Peak Oil spreads among the population, more and more gas will be used also in the transport industry, either directly or indirectly (using more electrified cars)

And obviously most of this gas comes and will come from imports, since in the past four years the number of rigs drilling for gas in the U.S. has risen from around 600 in March 2002 to more than 1,300 today: yet, natural gas production has remained flat or falling

The consequences of all this is that demand for natural gas will skyrocket in the coming years, and maybe a few producing nations will decide to get together and form a new cartel, learning from the experience, errors and successes of OPEC.

Well, I bet it's interesting to discover that this cartel already exists: it's brand new (it was created in 2001), is called Gas Exporting Countries Forum (GECF) and is defined as "an informally structured group of some of the world's leading gas producers aimed at representing and promoting their mutual interests".

Its current members are Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Norway (as an observer), Oman, Qatar, Russia, Trinidad & Tobago, the UAE and Venezuela - and they control 73% of the world's gas reserves and 41% of gas production.

Not bad, as the new OPEC, uh?

Just for future reference (I mean, a little preemptive strike is always around the corner) these are the proved reserves (in trillion cubic feet as of 2004, source BP Statistical Review of World Energy 2005) for the top members of this cartel:

Qatar: 910.1
Iran: 970.8
United Arab Emirates: 213.9
Saudi Arabia: 238.4
Russia: 1694.4
Algeria: 160.4
Malaysia: 87
Indonesia: 90.3

Our suggestion is to watch closely these countries (well, some of them already are in the crossair - literally - of our press and governments) and be ready to hear soon talk about the GECF.

Maybe as soon as your gas bill will rise.