Over the past year there has been an ever-quickening drumbeat of dire news about oil. Predictions of $250 barrel super-spikes, declining global supplies, and the potential for energy wars made headline news.
In the US, high prices at the pump became a leading campaign issue and a very real driver of inflationary fears. That inflationary pressure forced the emerging giants, India and China, to tighten monetary policy, which in turn constrained economic growth. But while oil will indeed come to an end as the primary energy supply for the global economic engine, it will most likely go out with a whimper and not a roar.
Putting the global recession aside for the moment, the premise always has been: Global dependence on oil is a reality, and demand is increasing at a steady rate primarily driven by the economic growth of India and China. Concurrently, new sources of oil are increasingly difficult and costly to find. So using the basic principle of supply and demand, we should conclude that oil prices will continue to increase without any end in sight, correct?
Not exactly. First and foremost, there is the issue of supply. During the next two to three years, Iraq's oil production will increase by 3.5 million barrels per day, adding 4 per cent to the global supply. Production from new fields in Angola and Brazil is expected to add an additional 1 million to 2 million barrels per day during the same time.
Precarious dependence on foreign oil
But additional production is not what will cause oil to retreat quietly. The end of oil may have begun with the Jan. 20 inauguration of President Barack Obama. His Presidency heralds, among other things, the rapid development of the most comprehensive energy policy that the world has ever seen.
Currently the US consumes 19.6 million barrels of oil per day - 25 per cent of the world's total consumption. The US also produces one-fourth of the world's carbon emissions, more than any other country on earth. Equally alarming is the fact that the US imports 10.2 million barrels of oil per day, creating an unsustainable and strategically precarious dependence on foreign oil.
This situation is about to change faster than most expect. The new Obama Administration will soon unveil a comprehensive energy strategy that will focus on energy independence, renewable energy, and the rapid reduction of greenhouse gas emissions.
The timing may be fortuitous as the US economy deals with the impact of poor fiscal and financial oversight, an automobile industry on the brink of collapse, massive expenditures in Iraq, and a workforce that has pushed into the low-value service-industry sector.
Millions of new green jobs
This current economic plight has created a scenario in which the American public is ready, willing, and able to get behind a far-reaching and, in many ways, revolutionary energy strategy. The key elements of this strategy will include massive investment in renewable energy, including wind and solar; a rapid retooling of the US automobile industry to manufacture highly fuel-efficient vehicles with a bias toward plug-ins; the creation of a digital electrical grid; investments in high-speed rail; and an aggressive carbon cap-and-trade program.
These investments will create millions of high-value, green jobs that cannot be outsourced, and while the impact of this program will be felt across the board, one of its most measurable short- to medium-term effects will be the rapid decrease in the importing of foreign oil.
Specifically, in 2010 the US will begin reducing foreign oil consumption by 10% per year, equal to roughly 1 million barrels a day. That's more than $30 billion in reduced capital outflows in the first year alone, welcome news considering our current balance of trade.
But that's only a small part of the story. The Obama Administration plans to create a cartel of oil-importing nations that will include India and China. This group will share technology, processes, and strategy with the stated goal of eliminating the group's dependence on foreign oil.
The importance of this move cannot be overstated. India and China are keenly aware that their economies are increasingly becoming dependent on oil from volatile regions. We can expect this new group to move to aggressively share technology that will reduce the use of fossil fuels. That technology will be driven by innovation that is becoming more global with the rapid development of advanced battery technology, photovoltaic solar panels, wind turbine systems, and biofuels.
Lower demand will lead to change
The end of oil will be met with some resistance. There are many vested interests that would like to see our dependence continue. However, that resistance will be no match for the economic and strategic pressure aligned against it. In the short term our energy independence strategy, like the Manhattan Project or the Apollo program, will help pull the US economy out of a recession while creating continuous downward pressure on oil prices.
Low oil prices will further reduce the threat of inflation - high oil prices fuel higher food costs - and a reduced threat of inflation will allow central banks to maintain an easing of monetary policy. This will be welcome news to India and China. Low inflation will equate directly to an increase in GDP growth and domestic consumption for them.
And what will be the longer-term consequences of this energy revolution? As demand wanes and prices continue to remain low, significant economic and social stress will begin to be seen in the various oil dictatorships such as Iran, Saudi Arabia, and Venezuela. Ultimately this will lead to regime change and social upheaval in many of these countries.
For the US, India, China, and the other oil-importing nations, the oil-producing regions will become far less relevant. Clearly there will be challenges along the way, but in the end oil will go quietly with nothing more than a whimper.
William Nobrega is president and founder of the Conrad Group, an emerging-market strategic planning and M&A facilitation firm based in Miami. He has more than 10 years experience in this field and is widely credited for initiating global business models in emerging geographies including Brazil, India, and China. He is co-author of the recently published book, Riding the Indian Tiger: Understanding India, the World's Fastest Growing Market.
Wednesday, January 28, 2009
Friday, January 2, 2009
What a year it has been!
The year began with a family feud that threatened to tear apart our tiny community. It ended with two events of utter warmth, of romance and brotherhood.
The events at the Sydney Cricket Ground were immensely forgettable. Teams raged against each other, supporters seemed to take up arms and allegations of racism were in the air. It seemed, on the surface at least, that it was a cricketing issue, umpires might have got it wrong and the definition of the spirit of the game grew increasingly far-fetched, but it soon grew into a much bigger problem. The match referee was a fine cricketer but not very well versed with the law and it needed an excellent piece of judgement from a New Zealand judge to resolve matters.
India threatened to pull-out, a stupid story of a plane being on stand-by did the rounds and none of us really knew what to expect next. It was a grievous wound for it struck at the heart of the only real link between two countries. Hopefully Australia will sell uranium and India will provide fine software engineers, but until that happens regularly, cricket will continue to be the only real bond between our nations. Sydney must never happen again; a blot on the game associated with one of its most beautiful cities. We are too small for a schism.
But the game is such a beautiful healer. Just over three months later Andrew Symonds, at the centre of the whole affair, was being welcomed with Hyderabadi biryani, Mathew Hayden and Michael Hussey were being cheered in Chennai and Shane Warne could have won an election in Jaipur! The IPL was the marketing and cricketing event of the year; both are important for one cannot survive without the other. Clearly T20 will be the new missionary of the game, spreading it to lands where traditional Test cricket, or even one-day internationals, cannot enter. It needs to be looked upon as an opportunity, but the ICC responded by looking upon it as a threat to Test cricket. It is inexplicable. We step on our own toes sometimes.
The last fortnight of the year was proof of the fact that in our effort to protect Test cricket, we underestimate its potency. We look upon every new trend like a commercial liner would a boat in Somalia - we assume there are pirates everywhere. I watch a children's talent show on TV every week and am stunned by how nine and twelve year olds sing classical based songs and old melodies. Surely they should have known only remixes or computer generated sounds! So too with Test cricket which grew, and became stronger, in 2008. It will hold its own in the new world unless we obsess over it. But if we shut our windows and keep the fresh air out, we will grow weak.
Virender Sehwag is an example of how one form of the game needn't cannibalise another. Seemingly made for T20, he led one of the finest run-chases in the history of Test cricket. And Sachin Tendulkar provided the game one of its warmest, most beautiful moments by scoring a fine hundred and then putting the innings, and indeed cricket, in perspective by speaking eloquently of the atmosphere in which it was played. It was a series that may not, need not, have been played but England showed a largeness of heart that cricket must never forget. What a lovely change from England teams of my growing up years that moaned, complained and spoke condescendingly about the people that were hosting them. In one gesture, England made more friends than they could have imagined.
In between, a child attained adulthood and some elders saw it as a threat, a mystery spinner enriched the sport and sadly the spectre of violence engulfed cricket. And yes, just to remind people of the treasure we possess, Sachin Tendulkar began and ended the year with a century! We were not short of action!
The events at the Sydney Cricket Ground were immensely forgettable. Teams raged against each other, supporters seemed to take up arms and allegations of racism were in the air. It seemed, on the surface at least, that it was a cricketing issue, umpires might have got it wrong and the definition of the spirit of the game grew increasingly far-fetched, but it soon grew into a much bigger problem. The match referee was a fine cricketer but not very well versed with the law and it needed an excellent piece of judgement from a New Zealand judge to resolve matters.India threatened to pull-out, a stupid story of a plane being on stand-by did the rounds and none of us really knew what to expect next. It was a grievous wound for it struck at the heart of the only real link between two countries. Hopefully Australia will sell uranium and India will provide fine software engineers, but until that happens regularly, cricket will continue to be the only real bond between our nations. Sydney must never happen again; a blot on the game associated with one of its most beautiful cities. We are too small for a schism.
But the game is such a beautiful healer. Just over three months later Andrew Symonds, at the centre of the whole affair, was being welcomed with Hyderabadi biryani, Mathew Hayden and Michael Hussey were being cheered in Chennai and Shane Warne could have won an election in Jaipur! The IPL was the marketing and cricketing event of the year; both are important for one cannot survive without the other. Clearly T20 will be the new missionary of the game, spreading it to lands where traditional Test cricket, or even one-day internationals, cannot enter. It needs to be looked upon as an opportunity, but the ICC responded by looking upon it as a threat to Test cricket. It is inexplicable. We step on our own toes sometimes.
The last fortnight of the year was proof of the fact that in our effort to protect Test cricket, we underestimate its potency. We look upon every new trend like a commercial liner would a boat in Somalia - we assume there are pirates everywhere. I watch a children's talent show on TV every week and am stunned by how nine and twelve year olds sing classical based songs and old melodies. Surely they should have known only remixes or computer generated sounds! So too with Test cricket which grew, and became stronger, in 2008. It will hold its own in the new world unless we obsess over it. But if we shut our windows and keep the fresh air out, we will grow weak.
Virender Sehwag is an example of how one form of the game needn't cannibalise another. Seemingly made for T20, he led one of the finest run-chases in the history of Test cricket. And Sachin Tendulkar provided the game one of its warmest, most beautiful moments by scoring a fine hundred and then putting the innings, and indeed cricket, in perspective by speaking eloquently of the atmosphere in which it was played. It was a series that may not, need not, have been played but England showed a largeness of heart that cricket must never forget. What a lovely change from England teams of my growing up years that moaned, complained and spoke condescendingly about the people that were hosting them. In one gesture, England made more friends than they could have imagined.
And a week later the second highest run chase was achieved. At the end a wonderfully gifted white man had produced a fine century and a shy, inexperienced black man had played with great maturity. As AB de Villiers and JP Duminy embraced, the power and magnificence of sport blossomed again. Don't forget the new South Africa is only fifteen years old and it isn't yet fifty years since Martin Luther King's rousing cry at the Lincoln Memorial for equality of black and white.It was as beautiful an end to the year as we could have hoped for.
New Year resolutions of cricket icons
New Year resolutions for some of our rich and famous cricketing icons.
Mahendra Singh Dhoni
I hereby resolve to make less of a fuss over my personal security. I understand the environment has changed in the country in the wake of 26/11 and that as a role model I must not encourage the building up of a Jharkhand army just to insulate me from my fans. I am no politician who needs to be protected from the very people he represents.I also resolve not to make a fuss over selection, particularly when it comes to assessing my pals who may be great touring companions but who also have to perform to justify their place in the team. I will not carry players as part of my personal baggage as captain, nor will I threaten to resign when my wishes are not fulfilled.
Gautam Gambhir
Virender Sehwag
Rahul Dravid
I will not let my batting get into that analysis paralysis again. People have been very patient with my form when they could so easily have condemned my continuous presence at one drop. I promise to be honest with myself when it comes to accepting when my time is up.And 2009 is not the time to go around saying that I have answered my critics when I make centuries at a strike rate of 40. I also promise to be more dynamic as a captain in the T-20 version of the game even if it is not my cup of tea.
Sachin Tendulkar
I resolve to bat on with a high emotional quotient in the memory of those who lost their lives so tragically to terror attacks. If I play a few more innings in the New Year as I did at Chepauk atthe end of the old, I know I can help India fulfill the great ambition of becoming the number one side in the world. The time has long gone when I should have any personal goalposts to move. All the runs I make will be in the team cause but it is not as if I needed a troubled British bank to tell me what I must do for my national team.
Yuvraj Singh
I stand on the threshold of true greatness where I can be as good a Test batsman as I am a limited-overs cricketer. I don't need to get into squabbles with England greats like KP and Flintoff in order to prove my dual capacity at the crease. As another year is gone, I know it is time to buckle down and mature fast so that I serve Team India even more with the bat as well as my pie-chucking.
Harbhajan Singh
Mahendra Singh Dhoni
I hereby resolve to make less of a fuss over my personal security. I understand the environment has changed in the country in the wake of 26/11 and that as a role model I must not encourage the building up of a Jharkhand army just to insulate me from my fans. I am no politician who needs to be protected from the very people he represents.I also resolve not to make a fuss over selection, particularly when it comes to assessing my pals who may be great touring companions but who also have to perform to justify their place in the team. I will not carry players as part of my personal baggage as captain, nor will I threaten to resign when my wishes are not fulfilled.
Gautam Gambhir
I will not convert cricket into football with my attitude of getting into the face of my opponents. I know I am not Marco Materazzi defending against the likes of Zinedine Zidane. I promise to keep my elbow out of play. I know a mild attitude change will enable me to be a better human being while I try to keep up my batting form of 2007 in which I took my first steps towards becoming a great cricketer.
Virender Sehwag
I wish to continue to be myself. I may have started my career as a Sachin clone but today I am Virender and no one else. The best way I can repay those who kept faith with my adventurous batting style during the lean times is to continue to bat in that aggressive vein with just that bit of concern to give myself that chance to succeed with consistency so that the team can win, as I did with that innings in Chennai. I also resolve to wipe off the last vestige of captaincy ambitions. That is not my job.
Rahul Dravid
I will not let my batting get into that analysis paralysis again. People have been very patient with my form when they could so easily have condemned my continuous presence at one drop. I promise to be honest with myself when it comes to accepting when my time is up.And 2009 is not the time to go around saying that I have answered my critics when I make centuries at a strike rate of 40. I also promise to be more dynamic as a captain in the T-20 version of the game even if it is not my cup of tea.
Sachin Tendulkar
I resolve to bat on with a high emotional quotient in the memory of those who lost their lives so tragically to terror attacks. If I play a few more innings in the New Year as I did at Chepauk atthe end of the old, I know I can help India fulfill the great ambition of becoming the number one side in the world. The time has long gone when I should have any personal goalposts to move. All the runs I make will be in the team cause but it is not as if I needed a troubled British bank to tell me what I must do for my national team.
Yuvraj Singh
I stand on the threshold of true greatness where I can be as good a Test batsman as I am a limited-overs cricketer. I don't need to get into squabbles with England greats like KP and Flintoff in order to prove my dual capacity at the crease. As another year is gone, I know it is time to buckle down and mature fast so that I serve Team India even more with the bat as well as my pie-chucking.
Harbhajan Singh
I know I was lucky in 2008 to have the support of all my colleagues. I may not be able to say honestly that I did not cross the bounds of good behaviour in the Symonds episode as well as in the case of Sreesanth. I resolve to give one interview less in 2009 that I did last year. I refuse to suffer the foot-in-the-mouth disease just because the media keep calling.
Thursday, January 1, 2009
The Parallels between Chennai and Perth
For those wondering about the future of Test cricket, the last two matches we have witnessed should clear all doubts. First the MA Chidambaram Stadium in Chennai and then the WACA in Perth provided ten fascinating days of cricket. What's just as remarkable are the similarities between India's run-chase and that of South Africa. So we decided to take a closer look at the numbers and more, to see how alike these two innings' were.
The Plot
1 Both matches were the first game of the series, with teams looking to take an early upper hand.
2)The side that batted first (England in Chennai and Australia in Perth) took a decent first innings lead on the back of some good bowling. England had a 75 run lead while Australia's lead was 94 runs.
3)In the third innings, the teams had similar scores (England 311/9 declared, Australia 319); leaving their opposition a record score to chase- in both cases the highest fourth innings score required to win a match in the host country.
The Characters
1) The Ballistic Batter- In order to chase a big total, you need a great start. India got that from Virender Sehwag, with his squash-buckling innings of 83 which included 15 boundaries (sixes included). South Africa had Graeme Smith, who was not as aggressive but just as effective with a match-winning 108 that included 13 boundaries. In fact, both these men have been the stars with the bat for their sides through 2008. Smith is the highest run-getter this year with 1519 runs while Sehwag is second with 1445 runs.
2) The Able Ally- Sehwag and Smith both needed a calm, sedate partner at the other end. And Gautam Gambhir for India, and Hashim Amla for South Africa played that part to perfection. Both got useful fifties at similar strike-rates, 47.5 for Gambhir and 47.3 for Amla! And really, both have played the ideal supporting role all year long. Amla is South Africa's second highest run-getter with 1112 runs. Gambhir is only fourth for India, but only because he has played fewer Test matches (8) than Laxman (15) and Tendulkar (13). His average, though, is better than the rest.
3) Three down- Both teams had one failure amongst the top three, Neil McKenzie for the Proteas and Rahul Dravid for India. India lost their third wicket with 183 runs on the board, South Africa had scored 179.
4) Elegant Cameo- Truth be told, Jacques Kallis contributed more with the bat than VVS Laxman. But again, both scored fluently and helped stitch a useful partnership when the pressure was on. Kallis' flurry towards the end of Day Four was one of the unnoticed turning points in the match, which gave the visitors the momentum they carried forward to the final day.
5) The Stylish Southpaw- Yuvraj Singh has been around a while, but still had to establish himself in the Test arena. Jean-Paul Duminy was on debut. Both left-handers, with plenty to prove, stuck till the end, scoring unbeaten half centuries to take their sides home. And both delivered the knockout punch. The point one felt sure India would win was when Yuvraj hit that six of Panesar. At the WACA, Duminy's six of Krejza sent similar signals.
6) The Battered Bowlers- Only Andrew Flitnoff and Graeme Swann (three of the four wickets between them) posed any kind of threat to the Indian batsmen. The rest of the lot looked lacklustre and insipid on a fifth day pitch that offered some help to the bowlers. Likewise, Johnson and Lee (all four second innings wickets between them) were the only ones who looked like taking a wicket for the Aussies. Everyone else was easy pickings.7)The Classic Century- A match-winning 103 not out by Sachin Tendulkar, of 196 deliveries with 9 boundaries. A match-winning 106 not out by AB de Villiers, of 186 deliveries with 9 boundaries. Innings for innings, these two knocks were just as good. AB de Villiers is no Sachin Tendulkar, but his innings on Sunday could be start of him going from good to great.
The Result
1) Chases make for great viewing, right from movies to cartoons (remember the Road Runner!) to cricket. And in the end, both chases were successful, India and South Africa won by 6 wickets.
2) Both games were a fantastic advertisement for Test Cricket. Forget the fast-food version, this is what cricket is all about.
The Plot
1 Both matches were the first game of the series, with teams looking to take an early upper hand.
2)The side that batted first (England in Chennai and Australia in Perth) took a decent first innings lead on the back of some good bowling. England had a 75 run lead while Australia's lead was 94 runs.
3)In the third innings, the teams had similar scores (England 311/9 declared, Australia 319); leaving their opposition a record score to chase- in both cases the highest fourth innings score required to win a match in the host country.
The Characters
1) The Ballistic Batter- In order to chase a big total, you need a great start. India got that from Virender Sehwag, with his squash-buckling innings of 83 which included 15 boundaries (sixes included). South Africa had Graeme Smith, who was not as aggressive but just as effective with a match-winning 108 that included 13 boundaries. In fact, both these men have been the stars with the bat for their sides through 2008. Smith is the highest run-getter this year with 1519 runs while Sehwag is second with 1445 runs.
2) The Able Ally- Sehwag and Smith both needed a calm, sedate partner at the other end. And Gautam Gambhir for India, and Hashim Amla for South Africa played that part to perfection. Both got useful fifties at similar strike-rates, 47.5 for Gambhir and 47.3 for Amla! And really, both have played the ideal supporting role all year long. Amla is South Africa's second highest run-getter with 1112 runs. Gambhir is only fourth for India, but only because he has played fewer Test matches (8) than Laxman (15) and Tendulkar (13). His average, though, is better than the rest.
3) Three down- Both teams had one failure amongst the top three, Neil McKenzie for the Proteas and Rahul Dravid for India. India lost their third wicket with 183 runs on the board, South Africa had scored 179.
4) Elegant Cameo- Truth be told, Jacques Kallis contributed more with the bat than VVS Laxman. But again, both scored fluently and helped stitch a useful partnership when the pressure was on. Kallis' flurry towards the end of Day Four was one of the unnoticed turning points in the match, which gave the visitors the momentum they carried forward to the final day.
5) The Stylish Southpaw- Yuvraj Singh has been around a while, but still had to establish himself in the Test arena. Jean-Paul Duminy was on debut. Both left-handers, with plenty to prove, stuck till the end, scoring unbeaten half centuries to take their sides home. And both delivered the knockout punch. The point one felt sure India would win was when Yuvraj hit that six of Panesar. At the WACA, Duminy's six of Krejza sent similar signals.
6) The Battered Bowlers- Only Andrew Flitnoff and Graeme Swann (three of the four wickets between them) posed any kind of threat to the Indian batsmen. The rest of the lot looked lacklustre and insipid on a fifth day pitch that offered some help to the bowlers. Likewise, Johnson and Lee (all four second innings wickets between them) were the only ones who looked like taking a wicket for the Aussies. Everyone else was easy pickings.7)The Classic Century- A match-winning 103 not out by Sachin Tendulkar, of 196 deliveries with 9 boundaries. A match-winning 106 not out by AB de Villiers, of 186 deliveries with 9 boundaries. Innings for innings, these two knocks were just as good. AB de Villiers is no Sachin Tendulkar, but his innings on Sunday could be start of him going from good to great.
The Result
1) Chases make for great viewing, right from movies to cartoons (remember the Road Runner!) to cricket. And in the end, both chases were successful, India and South Africa won by 6 wickets.
2) Both games were a fantastic advertisement for Test Cricket. Forget the fast-food version, this is what cricket is all about.
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