THE NEW WORLD AFTER DAVOS: PAVING THE WAY FOR USD 70/BARREL
- Written by Laurentiu Rosoiu
The increasingly clearer prospect of vigorous relaunching of the US unconventional oil and gas deposits exploitations was the most important of the topics related to this industry, addressed at the World Economic Forum held during January 17-20 in Davos. The way towards the price threshold of USD 70 per barrel was a subsequent subject, but at least as important. In this context, in the private talks between the companies’ CEOs in the industry in regard to the standardization of some equipment used in the exploration and production, completes the picture of the current global concerns about this field.
Overall, however, more important than the presence and talks between the industry representatives was the absence from discussions of the newly inaugurated US President and that the President of China held the Forum’s opening speech – for the first time in history.
The absence of the US President stresses once again, if needed, the magnitude of the US reorientation in terms of presence, policy and of the US interests towards its own borders; at the same time, the Forum in 2017 marks a “historic” global leadership change through the takeover, with determination, by Xi Jinping - the first President of the China Republic to attend this event – of the banner of struggle to implement the principles and provisions of the Paris agreement.
The US seems to have weakened its global leadership position, even if just in image terms for the moment. The denunciation of the Paris agreement will bring America a considerable strengthening of its economic position, by the fact that the revival of fossil energy could be a major stimulus for companies and for the population; cheaper energy means a more competitive economy and a population with higher purchasing power. Competitiveness and consumption - as drivers of the economy, remain two of the pillars of America’s greatness.
Furthermore, the stimulation of exploration and production of alternative deposits will continue to keep the US at the forefront in terms of technology and innovation in the oil and gas industry. And so we have a third pillar on which the Americans can continue rebuilding a stronger country. Especially since, in parallel, by taking to reduce carbon emissions, China - established by this Forum as the main (and only) rival for America - assumes costs the national economy might not be able to withstand.
America is therefore likely to remain the equally ‘great’ as it was hitherto... and even more than that! It’s just that the greatness so far was given to a very large extent precisely by the involvement and a major presence worldwide. The low tide envisaged could bring many benefits over short term, but also negative things in terms of scope and of the capacity to project the interests... and thus highly probable long-term losses.