(Published in BusinessWorld under the View from Taft column, January 24, 2008)
At the crack of the New Year, after much of the holiday jubilations, we were all greeted by the alarming newspaper headlines which read “world oil price hits $100 a barrel”. The price of oil has more than doubled over the last 12 months, and has been vacillating to near $100-a-barrel in November last year.
Although oil price is back to the 90-dollar-a-barrel levels nowadays, there is still much uncertainty on the future of this precious commodity and the future of energy in general is still uncertain because oil resources are fast being depleted.
According to the Energy Information Agency (EIA) of the U.S. government, world demand for oil is expected to increase by 54% in the first 25 years of the 21st century. About 40%, will come from Asia, mainly because of China and India because of their rapidly growing economies
But the supply cannot meet oil demand forever. The EIA predicts that the world will hit peak production between 2013 and 2037, after which production will fall by three per cent annually. At this point, oil prices will surely hit record highs unless governments around the globe discover new oil reserves or use alternative energy sources.
Our dependence on oil and its shortage in the future will bring forth new threats and risks to governments, public safety, and the environment. The lack of energy to fuel economic growth would have devastating effect on the general populace. The increase in energy use by nations will drive up the prices of oil, of oil-dependent products and services such as the manufacture drugs and other consumables, and transportation and other services.
In addition, oil will become a geopolitical weapon used between the oil-producing and oil-consuming nations which will result to the possible explosion of Middle-East conflict.
It has been reported that oil, among other factors and considerations, played a role in the Bush administration's decision to invade Iraq. With 70% of the oil reserves of the Organization of the Petroleum Exporting Countries (OPEC) residing in the Middle-East, the depletion of oil in the future will pose greater risk of large-scale conflict.
The increased use of oil will also accelerate global warming and pose greater risk to mankind’s the safety and health. Despite the framework set by the Kyoto Protocol to reduce the carbon dioxide emissions of industrialized nations to an average of 5.2% below 1990 levels by 2012, many observers see this as a remarkable failure. According to recent data released by the European Environmental Agency, 13 of the 15 original nations belonging to the European Union have actually increased their emissions over the past 16 years. In four years time, the EEA predicts that the 15 will exceed the target by 7%. And all these are happening because of the increasing use of oil and other fossil fuels.
Thus, it is imperative that we cut our dependence on oil and find new sources of renewable energy. James Canton, a futurist and author of “The Extreme Future” forecasts that new energy sources should be abundant, reliable, renewable, clean, affordable, and secure in order to reduce the world’s dependence on oil.
The most promising future source of energy that passes the criteria of Canton is hydrogen. It’s the most plentiful gas in the universe. It also has the highest content per unit of weight of any known fuel. It is renewable, reliable, clean (a hydrogen powered car gives out water as exhaust) and secure as it is available everywhere. More than $5 billion is being spent around the world by industry and governments alike for research and development on hydrogen as a potential energy resource.
What’s noteworthy is that Toyota has already made great strides in converting its automobiles into hydrogen-powered vehicles. Toyota has already launched a number of models in the US that runs a hybrid electric/hydrogen engine.
Wind power is another alternative source of energy that’s being developed all over. One local example that’s laudable is Smart Communication’s use of wind-powered cell site in Cebu. Not only did it utilize renewable energy, but also it significantly reduced fuel consumption and maintenance costs of the cell site.
Another alternative source of energy is biofuels. The Philippine Biofuels Act of 2006 is a commendable move by government to reduce its dependence on oil. It aims to require oil companies to blend biodiesel and ethanol into diesel and gasoline. Aside from generating huge savings for the country, this would also lead to the reduction of pollution caused by fossil fuels’ emissions.
These are just some of the alternative sources of energy that we can look forward to in the future. But we should all keep on developing and looking for other sources of renewable energy, because our survival depends on these.
-------------------------------
Reynaldo C. Lugtu, Jr. teaches management and marketing courses in the MBA Program of De La Salle Professional Schools. He may be e-mailed at rlugtu2002@yahoo.com or visit his blog at http://rlugtu.blogspot.com.
At the crack of the New Year, after much of the holiday jubilations, we were all greeted by the alarming newspaper headlines which read “world oil price hits $100 a barrel”. The price of oil has more than doubled over the last 12 months, and has been vacillating to near $100-a-barrel in November last year.
Although oil price is back to the 90-dollar-a-barrel levels nowadays, there is still much uncertainty on the future of this precious commodity and the future of energy in general is still uncertain because oil resources are fast being depleted.
According to the Energy Information Agency (EIA) of the U.S. government, world demand for oil is expected to increase by 54% in the first 25 years of the 21st century. About 40%, will come from Asia, mainly because of China and India because of their rapidly growing economies
But the supply cannot meet oil demand forever. The EIA predicts that the world will hit peak production between 2013 and 2037, after which production will fall by three per cent annually. At this point, oil prices will surely hit record highs unless governments around the globe discover new oil reserves or use alternative energy sources.
Our dependence on oil and its shortage in the future will bring forth new threats and risks to governments, public safety, and the environment. The lack of energy to fuel economic growth would have devastating effect on the general populace. The increase in energy use by nations will drive up the prices of oil, of oil-dependent products and services such as the manufacture drugs and other consumables, and transportation and other services.
In addition, oil will become a geopolitical weapon used between the oil-producing and oil-consuming nations which will result to the possible explosion of Middle-East conflict.
It has been reported that oil, among other factors and considerations, played a role in the Bush administration's decision to invade Iraq. With 70% of the oil reserves of the Organization of the Petroleum Exporting Countries (OPEC) residing in the Middle-East, the depletion of oil in the future will pose greater risk of large-scale conflict.
The increased use of oil will also accelerate global warming and pose greater risk to mankind’s the safety and health. Despite the framework set by the Kyoto Protocol to reduce the carbon dioxide emissions of industrialized nations to an average of 5.2% below 1990 levels by 2012, many observers see this as a remarkable failure. According to recent data released by the European Environmental Agency, 13 of the 15 original nations belonging to the European Union have actually increased their emissions over the past 16 years. In four years time, the EEA predicts that the 15 will exceed the target by 7%. And all these are happening because of the increasing use of oil and other fossil fuels.
Thus, it is imperative that we cut our dependence on oil and find new sources of renewable energy. James Canton, a futurist and author of “The Extreme Future” forecasts that new energy sources should be abundant, reliable, renewable, clean, affordable, and secure in order to reduce the world’s dependence on oil.
The most promising future source of energy that passes the criteria of Canton is hydrogen. It’s the most plentiful gas in the universe. It also has the highest content per unit of weight of any known fuel. It is renewable, reliable, clean (a hydrogen powered car gives out water as exhaust) and secure as it is available everywhere. More than $5 billion is being spent around the world by industry and governments alike for research and development on hydrogen as a potential energy resource.
What’s noteworthy is that Toyota has already made great strides in converting its automobiles into hydrogen-powered vehicles. Toyota has already launched a number of models in the US that runs a hybrid electric/hydrogen engine.
Wind power is another alternative source of energy that’s being developed all over. One local example that’s laudable is Smart Communication’s use of wind-powered cell site in Cebu. Not only did it utilize renewable energy, but also it significantly reduced fuel consumption and maintenance costs of the cell site.
Another alternative source of energy is biofuels. The Philippine Biofuels Act of 2006 is a commendable move by government to reduce its dependence on oil. It aims to require oil companies to blend biodiesel and ethanol into diesel and gasoline. Aside from generating huge savings for the country, this would also lead to the reduction of pollution caused by fossil fuels’ emissions.
These are just some of the alternative sources of energy that we can look forward to in the future. But we should all keep on developing and looking for other sources of renewable energy, because our survival depends on these.
-------------------------------
Reynaldo C. Lugtu, Jr. teaches management and marketing courses in the MBA Program of De La Salle Professional Schools. He may be e-mailed at rlugtu2002@yahoo.com or visit his blog at http://rlugtu.blogspot.com.
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