Bye-Bye, OPEC or Hello, Sugar

Do you know from where a growing proportion of your car's fuel comes? Did you say Brazilian sugar cane and gooey Canadian oil sands? Spot on.

And what about energy to heat homes, run factories, and light cities? It increasingly is supplied by those bad boys who run nuclear power plants. They are making a hell of a comeback, if not in politically correct - and security-conscious - America, then in India, China, and Russia.

Thanks to $60-a-barrel oil, new energy paradigms are here. The extraction of ethanol from agricultural crops and oil from oil sands - both deemed overly pricey processes for consumer use just 20 years ago - now make economic sense. Indeed, the goods are already here. Projected over the next few years, their impact blows the mind.

Consider this. Brazil, with a population 186 million, this year will achieve the miracle of energy self-sufficiency. The world's fifth-largest country by population (after Indonesia and before Russia) will do so by producing ethanol from its vast sugar cane plantations. Ethanol is already powering a huge percentage of Brazilian motor pools. Gas stations from Rio to Salvador de Bahia display two sets of pumps: one marked "A," for sugar cane-derived ethanol, and the other labeled "G," for old-fashioned gasoline.

Brazil is exporting the ethanol technology to eager copycats, including China and India, which each have substantial agricultural sectors and quickly growing demands for energy.

Up north, Canada is noisily emerging as the world's uncontested oil giant. Endowed with a natural resource known as oil sands, which is, as it sounds, gooey sand laced with oil, Canada stands to become the richest oil-producing country in history. That sea change is known but its impact has yet to be appreciated.

In the province of Alberta, earthmoving equipment is churning away day and night, scooping up mountains of the country's estimated reserves of 1.7 trillion to 2.5 trillion barrels of oil (yes, that's trillion with a "t") that are trapped in the complex mixture of sand, water, and clay.

Compared to Saudi Arabia's estimated reserves of 500 billion barrels of extractable crude, Canada ranks as the world's oil power. The reason why only a little of this oil wealth was tapped in the last 50 years was again, simply, price. Times have changed. As this column is read, scores of multinational oil companies are pouring money into Canadian oil sands, refining the technology to reduce the costs of transforming it into gasoline.

What does it all mean?

For one thing, oil prices will come down. The cascade will begin as these new sources of oil come onto the markets in increasing quantities.

Just as important, the political influence of today's big oil producers will evaporate. Bye-bye Iran, Kuwait, Iraq, Venezuela, and - most important - bye-bye Saudi Arabia.

That image of camels gliding across the desert with oil rigs shimmering in the distance will be replaced by one of sugar cane fields ablaze in the sun and monster bulldozers shifting sand.

Finally the world will not face an energy crisis as it has been defined classically. What we are looking at is a redefinition of political clout and options. Another triumph of the West over its adversaries thanks to technology, innovation, and greed? Indeed.

Meanwhile, that long-neglected product of innovation, nuclear energy, is making a glorious comeback. Of all countries on earth, a much-maligned but quite charming European state, France, is thumbing its nose at everybody as it sits on a huge grid of nuclear power.

Back in the 1970s, as various Green parties, environmentalists, and leftists progressive governments put the clamp on construction of nuclear plants, France made a strategic decision to build a whole lot of them. Today, the country is self-sufficient and also exports electricity to its neighbors. The setup is called energy independence. Sometimes, big government matters.

As long as the price of oil remains high, these alternatives will become more viable and more popular. Once anchored, these new fuel technologies will keep on giving, regardless of petroleum prices.

TheNewYorkSun