Unless it has to do with green, very little is reported in the Canadian media about energy in general.  Recent news means the energy sector is about to go under major changes that will last well into the next century. Most of the information for this editorial is from The Economist, Bloomberg Businessweek, and from my observations from travelling throughout Africa six times.

The big change that is taking place around the world is the discoveries of major finds of oil and natural gas (NG).  Most of these fields will be in service by decade end.  The new reserves mean oil and NG will remain the main source of global energy needs for the reminder of this century.  With recent discoveries it is estimated there is enough NG to last 450 years, 50 years longer than coal.  There are enough known oil reserves to last sometime into the next century.

The biggest changes are coming from South America and Africa.

• There has been a massive oil field discovered off the coast of Brazil.  If this field is developed then it will be possible that Brazil can supply most of South America with their needed daily oil for the next couple of decades.
• Mozambique recently reopened a gas field they closed because the local mafia was extorting from it. The company negotiated with the government and the mafia and met somewhere in the middle. This year another massive gas field has been discovered.  It will be put into production by 2028.
• Another huge NG field has been discovered in Tanzania, valued at between thirty and forty billion dollars.  Smaller fields have been found in Senegal and Mauritania.  Libya has recently signed contracts to develop two new oil fields as well.
• Total Energies believes Namibia is sitting on top of massive oil reserves.  The company claimed there was “11b barrels of oil and potentially gas too”.  Namibia has plenty of flat land so it could also be a big producer of solar and wind power which it could export to neighbouring countries.
• There is a supply of natural gas under the eastern Mediterranean Sea that is so large it can provide Egypt, Israel, Jordan, and a handful of other country’s energy security for decades to come.

It is estimated Africa has more NG than the Middle East which means not one African country will ever need Russian NG and oil.  There are also plenty of known metals throughout the continent which the world needs and wants. If the proper governments are formed Africa will become an economic powerhouse.  The continent remains too unstable for us to justify investing in, for now.

This is bad for Canada because it means serious competition. Under Trudeau, we are the only rich country in the world that refuses to promote their natural resources.  We still have a head start but it can very easily be eliminated within a decade. For the rest of this century the changes to the global economy are going to be fast, and Trudeau is not allowing us to prepare. 

For investment purposes, we will begin to reassess our energy sector next year.  If it continues to look like the Liberal Climate Cabal is on its way out, our share prices will continue to climb slowly and then take-off once they are gone. Investing in the energy sector is probably safe until 2028 if Trudeau remains in power, when many of the African fields are going into production.

If it appears Trudeau will be re-elected (which it doesn’t) we will have to direct investments outside of Canada in the next two years.  Our companies will begin losing highly skilled workers to other countries, and our cost of living and business will go sky high because we will not have a source of cheap energy.  We will quickly become noncompetitive in the world and our dollar will drop to $0.50US. This will cause prices of imports to climb, lowering our standard of living further.  A declining currency works like the Carbon tax; it starts at the top and works it way to the bottom with the consumer paying the full price.

The only real competition for oil and gas are nuclear, geothermic, and hydro.  There is an excellent chance that hydrogen will become popular in the next decade because its delivery costs will be in a free fall. But if Trudeau has his way and closes the energy sector, Canadian hydrogen will not materialize since our engineers and scientists will have left Canada for where they are needed. Solar and wind power will survive as a niche market, but their costs will be soaring in the years ahead.  Plus, in a solar society we will be dependent on China for our panels because they are the largest manufactures and can manipulate the market with their rare-earth mineral stockpiles.

Today is the time to prepare for the coming changes.  Hopefully there will be a push for an election when the House of Commons opens because Canada desperately needs fresh people in Ottawa that truly care about our future. Not one that “has our back” as they purposely force a decline in our standard of living and international reputation.  The next inline must understand that our future is based on cheap energy, which is oil and NG.  Thankfully, the poles show that the party in the lead does, and more importantly care for Canadians overall. Justin’s reign is the best example in Canada’s history of how politics can cripple a country.