Columbian Oil the next Saudi Arabia... 2 of 3

Ever play Starcraft? Me neither, but it seems pretty simple. You make tanks, train troops, build an airforce and create other bases. But, before you can do any of that there's a critical step thats as real as hemorhoids before a bike trip. If you want to create a strong army and be successful you need to secure the resources needed to build it before your opponent does -then protect them at all costs.

That's probably the easiest way to describe this debate and why I think that South America, particularly Columbia, is going to play a critical role in shaping the foreign policies to come (Green tech will too, just not as dramatically as you think or hope.) We need the energy for two main reasons; one, North America is addicted to it like a fat kid is to cake. And two, because we don't want anyone else to have it. If we have it, even though we don't need all of it, we can still control who gets it. Take a look at the Keystone pipeline that Obama has recently shut down and the backlash it's going to create.

The US president, probably pandering to popular opinion (it's an election year) and less on facts, decided not to approve the remaining pipeline extensions that cut through the Mid Western US. Stephen Harper, The Canadian Prime Minister, simply took a sharpie and drew a line across Canada and said "Fine, someone call China, tell them to bring cash."

Game theory allows you to 

apply info and play out the game 

based on what each "player" 

needs and has.

China will soon be as oil hungry as the US and at current production levels there isn't enough to go around. Everyone needs energy to keep the economy going, if your economy fails, like really fails, it could lead to something catastrophic. So to prevent that you keep the economic engine going at all costs. In the Starcraft game, you need to secure the resources to fight the good fight. Similarly, the US needs to do the same and secure all the crude it can. Basically, they want to have control of all the resources before the game starts. It'll make it almost impossible for another player to win and make it futile to even fight. That's what we want, we want other countries to believe that it's a losing battle.

Columbian petroleum is just another pawn in the resource game and a logical play for North America. It can easily be extracted and shipped to the US with minimal effort when compared to the painstaking journey an oil tanker has to take to get here from the Middle East. Which is primarily why it is so enticing to the US, it's close and can be defended from the water.

Now, if you're wondering why I keep resorting back to a war like state of affairs it's only because I have crudely adapted and followed others who have used game theory to play out the scenario. Unsurprisingly, there is a high likelihood it will lead to conflict. But there's a kicker.

No one wants to fight. Yes, there are wars, and they are horrible, but they're no where near the levels of atrocity that the world is actually capable of doing. It's this deterrent that keeps us constantly fighting "invisible wars"or wars of attrition. Game theory allows you to apply info and play out the game based on what each "player" needs and has. Right now, everyone needs energy, without it there is literally nothing. We can take all the assets a country or "player" has and determine what their next move is based on their needs.

As of today, the moves don't add up to conflict, but when you play out the moves down the road there is a strong possibility that it could go bad, IF, we don't secure energy resources and more importantly, protect them.

Part 3 of 3 of Columbian oil will conclude this blog