Article of the Day: When the Petrodollars Run Out

When the Petrodollars Run Out

This article was actually posted at the end of last week by Foreign Policy and I’ve been meaning to write about it since I first read it.  Energy politics are fascinating as they are both a source of short term restraint for importing nations and long term worry for exporter nations.  There is no question that Europe will be more belligerent toward Russia when half the continent is no longer solely reliant on Moscow for gas.  Certain alternatives are already emerging, but they are few and far between, and even the most realistic are still a number of years away.

That said, petrostates can’t afford to be complacent.  Qatar has clearly internalized this message and is massively diversifying its portfolio — including, to my dismay, the purchase of PSG (WHY DID PARIS HAVE TO GET A GOOD FOOTBALL TEAM THE YEAR I LEFT?!?!).  Obviously, many Qatari investments are far more prudent than that of a football team but the point remains that the Al-Thani’s have read the handwriting on the wall.

I’ve learned that those who make grandiose predictions about foreign policy tend to get them wrong more often than not, so I will reserve judgement about what the future holds for petrostates.  Yet, the fact that diminishing energy costs hurts them should help frame the argument on climate change for conservative’s.  Many legislators who are hesitant to push for alternative energy technology argue that it will undercut the vital energy sector.  Be that as it may, the search for a cleaner source of energy will naturally put more pressure on petrostates — a number of whom are not exactly best friends with western democracies.

This geopolitical narrative can be a source of mutual understanding between the right and the left.  What’s more, framing the climate change debate in such a way emphasizes the potential domestic economic gain as opposed to the destructive nature of moving away from fossil fuels.  Granted, in an ideal world the argument that curbing emissions is integral to saving the planet should be enough, but sometimes a little pragmatic thinking can go a long way!