Oil moves the world around and creates powerful countries. Oil is such a vital commodity that it provoked wars throughout the 20th century. The few countries that produce it, try to keep control of it to ensure its riches stay at home. Those who do not have it, strive to get it.
In the 1930s Saudi Arabia was one of the poorest countries in the world but the discovery of oil transformed it and Saudi Arabia has amassed $515.6 billion in sovereign wealth funds. It has become the linchpin of a powerful cartel that sometimes rations oil to push up prices.
The United States is now the biggest producer of oil and gas owing to its shale revolution. It has tapped abundant reserves through fracking - a technology that uses high-pressure water and sand to fracture rock deep below the ground to extract hydrocarbons. This shale revolution has helped the United States become less dependent on oil imported from Saudi Arabia, Venezuela, Iraq, and other OPEC countries.
More oil and gas on global markets has also benefited the world's energy consumers by pushing down costs. Oil still remains the primary fuel, supplying almost 1/3 of the world's energy but its heyday may soon be over, despite growing demand.
By 2040 the world's global energy use is set to increase by 30 percent. That energy must be much cleaner if the world wants to prevent catastrophic global warming. In the past coal and gas were less expensive than renewable technology but their costs have come down dramatically. There is now a race among some nations to create more efficient renewable technologies to reduce pollution and be more energy self-sufficient.
China is the world's largest consumer of coal and the second largest of oil but it also now leads the world in clean energy. one third of the world's new wind power and solar panels is installed in China, and it sells more electric cars than any other country. The quest for energy self-sufficiency is a big motivation for many countries. China is moving fast, and America under President Donald Trump, is securing its energy independence with oil and gas. But unlike oil and gas renewables will not increase global warming.
The long term transition to clean energy will throw up new global challenges. It will create tensions in unstable parts of the Middle East as oil revenue starts to dry up. Another challenge is that wind and sun are intermittent. renewables may require vast shared electricity grids spanning boarders to make them more efficient. To stop global warming the world needs a huge collaboration over our shared energy future. If we fail, wars over scarce resources could be even worse in the 21st century than in the 20th.
(Source: The Economist YouTube channel)