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Wednesday, December 8, 2010

Wake up! Peak oil is here ...


The worst is yet to come!
Sam Chee Kong, Malaysia Chronicle

Forget about cheap oil, its history. Oil is going to hit US200 in the next 3 years. Prepare to pay RM 3 – 4 per litre for your oil. And what have our government done to alleviate our dependence and also our dwindling supply of oil? The warning signs have fallen on deaf ears and we are still fighting over ‘Ketuanan Melayu’, racial problems, meritocracy, playboy minister, C4 PM, 100 stories skyscraper ...

The ‘Peak Oil’ or ‘Hubbert Peak’ theory refers to the peak in global oil production. Oil is finite and non renewable resource and once half of its reserve is depleted then it will go into a terminal decline as shown on the figure.

The theory is named after M.King Hubbert (former Shell geologist) who created a method of modeling the production of oil. Of the 65 oil producing countries 54 already past its peak and is now declining.

Oil production in the US is down 11% since 1971, UK North Sea down 27% since 1999, Australia down 26% since 2001. Cantarell oilfield Mexico’s largest has its output falling from 2.1MBD in 2007 to 1.7MBD today and Saudi’s Ghawar ,the world’s largest oilfield has been declining at about 5% per year.

Even King Abdullah realizes the effects of Peak Oil and had been quoted on a new oil find. “Leave it in the ground …. Our children need it”

According to two researchers at the University of California, world oil supply will peak between 2010-2030 and any renewable replacement technologies will only be viable at around 2140. So there exist a gap of 130 years, ‘Houston, we have a problem’.

The US Military issued a 2010 Joint Operating Environment analysis early this year on Peak Oil and the summary of their findings are:

#1 To sustain the energy needs by 2030 we need to find a fresh supply of 1.4 MBD (millions barrels per day) from now until then.

#2 By 2030 the total world oil consumption will be 118MBD but energy producers will only be able to supply 100MBD.

#3 By 2012 surplus oil production will disappear and as early as 2015, the shortfall between supply and demand will be 10MBD.

It is very difficult for us to discard our dependence of oil overnight and here are some facts:

- Approximately 10 calories of fuel are needed to produce 1 calorie of food
- To produce a car you need 20 barrels of oil
- To produce a 32Mb Ram chip you need 3.5 pounds of fossil fuel
- Fertilizers are made from ammonia which is derive from natural gas
- The manufacturing of 1 ton of cement requires 45 gallons of oil
- Pesticides, agro-chemicals and plastics are made from oil
- The transportation of food, water and medicine requires oil

Peak Oil is here to stay. The Chinese are more prepared than any of us. China is now training 40,000 geologists a year to confront these challenges and they are scouring all over the globe to look for oil and joint energy partnerships. Where else in the US it is doing exactly the opposite, training 500 geologists and 40,000 lawyers !! Can anyone tell me what’s wrong with this picture?

What can we expect in the near future as a consumer?

1. Forget about cheap oil, its history. Oil is going to hit US200 in the next 3 years. Prepare to pay RM 3 – 4 per litre for your oil.

2. Car sales will be dominated by efficient hybrid and electric cars by 2025

3. Prepare to pay more for food, medical, energy and etc due to price inflation.

4. Prepare for more street demonstration and riots due to lack of food and higher cost of living.

5. Prepare for a change in lifestyles and be more prudent

6. Be self sufficient – have a plot of land to grow your own food.

And what have our government done to alleviate our dependence and also our dwindling supply of oil? The warning signs have fallen on deaf ears and we are still fighting over ‘Ketuanan Melayu’, racial problems, meritocracy, playboy minister, C4 PM, 100 stories skyscraper and a whole lot of other issues. Unfortunately there is no easy fix and the clock is ticking!

Our government should be doing everything in its power to encourage the development of technologies in Wind, Sun ,Wave, Biofuel or Nuclear to lessen its dependency on oil.

This is a matter of National Security as demonstrated by Vladimir Putin with the use of On/Off switch on the pipeline to Ukraine. Our government need to WAKE UP to the urgency that is required before it is too late.

THE IMMINENT ENERGY CRISIS WILL BE WORSE THAN THE CURRENT CREDIT CRUNCH !!

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