Oil Prices at 135$ per Barrel. BPLC ready to ration fuel supply to it's retail outlets. Others likely to follow suit.
So dear fellow citizens, it's a distinct possibility now that you may drive your car to a nearby Gas station and see a signboard saying "Sorry, out of Gas".
That's precisely what happens to economies when crude prices surge... They run out of Gas.
Is it temporary? Nooooooooo...
Of course, maybe Nigerian trouble will get sorted; maybe Venezuela’s socialist liberator, Hugo Chávez will let Oil flow freely from the nationalized fields; maybe Putin's Gas Cartel materializes and Gas will take some burden off Gasoline; maybe "Evil Iran" will let pipelies to be laid; Maybe we'll all give up eating "Bhuttas" and "American Corns" and burn the ethanol produced by them instead; maybe Jatropha plant will rescue us; maybe KG basin...
Maybe, maybe, maybe...
Common, whom are we kidding? There are these two rising nations that are hogging oil just like anything, u know India and China.And 10 years from now, we'll have quite a lot of Africa and Latin America demanding their pound of flesh as well..
Saudi Reserves are headed downhill... So are from Mexican Gulf. So are from Texas.. The more is extracted now, the lesser overall recovery becomes. And African reserves are always bound to be affected by Geo-Politic; that translates to Uncertainity, irrespictive of prospective supply potential.
In short, nothing will keep oil prices down. Neither newer technologies, nor billions of dollars of investments, nor new geopolitical equations. Goldman Sacchs said oil can touch $200 per barrel. And worse, it'll stay there.
Then there's the hope of alternate technologies. Solar, Wind, Tidal, BioGas, BioFuel. Yeah, they're there, but realistically speaking, they demand too much time and resources and ROI is spread over a long long period of time. Also, they'll become sitting ducks withot government subsidies.
So what's the way out?
A PARADIGM SHIFT IN OUR LIFESTYLES.
That is the only way out. The only way out.
I read about some marketing survey long time back, probably done in UK. It said that people use vehicles and go out for four primary reasons:
1. to work
2. to Eat Out
3. to get entertained
4. to socialize
Future towns to be developed should have units consisting of these four parts, so that by default the distances reduce. Another option is clean, comfortable mass transport system.Further, India would do well to have bullet trains that run on electricity and cruise at 400+ kmph. They'll make air travel irrelevant in most cases .... Just think, overnight journey from Jammu to Kanyakumari... And with these crude prices, Low cost carriers will become history.
But these are all long term... what can be done now? I guess these options below look feasible:
1. Better roads:
According to the CIA World Factbook, India has 3.3 million kilometers of roads; the largest road network in the world (both paved and unpaved roads). Investment to make all these roads world class hovers around 3.5 lakh crores. India’s oil Pool deficit is Rs 80,000 crore annually. 3.5 lakh crores will be recovered in absolute terms in 6 years time, just because of better vehicle efficiency. This, keeping aside other abstract gains, like the spurt in demand for industries which supply raw material for road making, better purchasing power of millions because of the huge employment generation and the boost in economic activity owing to better connectivity.
2. Encourage use of waterways:
Transport through water has only one drawback. TIME. But fuel consumption in water transport is so miniscule compared to Surface / Air, that this has to be an option. Cost involved includes making and maintaining docks, and increased vigilance across water routes to check. This is less investment, and again, lots of job creation for unskilled sector.
The results of above two will be felt within 5 years. All that is needed is Political will. India is NOT short of funds. India is NOT short of Talent.
Let's face it. We cannot do without oil, it's just not possible. Oil does not mean only Diesel and Petrol. Crude gives soooo many petroleum products that are vital for industries like automobile, personal care products, construction material, petrochemical products, crucial medicine ingrediants... even the KG Basin Gas and a potential 1-2-3 agreement cannot help us stem this crisis.
Let us keep oil for the vital needs, and personal vehicles for infrequent use...
3 comments:
Well documented and the issue provides 360 degree coverage of the present conundrum about surging oil prices and the tasks ahead.
One point i think u yourself has mentioned about also is the alternative sources of energy that will comes into picture if prices are gonna stay at these levels.
Large deposits of heavy oil and tar oil and also the projects on Gas Hydrates will become feasible which are not now taken seriously because of cheaper oil available.
Also companies setting wind mills and solar energy panels may not be that long and time consuming a process as the difference between the costs starts favoring these nations.
Also the point on energy available from hydrocarbons is also can be modified in the sense that as other heavy oils and methanes sources trapped deep into ocean becomes economic, the total Hydrocarbon reserves more or less will always be constant keeping economics at back of our mind.
Regards
Anish chaudhary
Spiker
Its a good thought but too much technically mistaken, you can not recover road improvement cost in 6 years becoz oil will still be burnt in road transport, good roads will only reduce oil consumption due to better efficiency of engines on better roads. Max improvement you can get after applying all other fuel friendly measures like optimum driving speed, good engines, better maintenance of vehicle is 40%, so that makes saving of 32000 crores annually (which again is a distant dream) so cost will be recovered in 10 years if everything goes well. Water transport is also a fuel intensive transport. To make water transport a major thing you have to dig a lot of canals and improve docks, deepen your rivers and make sure they remain full of water all the time as most of indian rivers are semi-perennial. This asks for a much more investment. It was also Vajpeyee's dream project called Jahajrani PRoject like golden quadrilateral, he proposed to connect all rivers of india to improve water transpert but experts refused it, it never even saw the daylight.
And if you are talking about oil prices, I think they are not going up bcoz of oil shortage bcoz everybody is getting oil, no country is oil starved. And geologists are saying we have discovered only 23% of total oil said to be there. So you can see the situation. There is a thing called Reserve Replacement Ratio, it means if you extracted x amount of oil than you discovered another oil reserve with same amount of oil in place. SO if the ration is more than 1 it means you are finding more oil than you are extracting and most of companies around the world reported this ration to be 1.1 last year. So you can see situation is not that bad. New frontier areas for oil exploration are Central and South East Asia, Africa and Latin America. Ofcourse they have geo-political problems, but companies are working there and more work is expected.
What driving oil prices high according to me is panicking of spot dealers, the moment they hear some news of oil blockage they bid higher price for their next shipments (crude futures) and they always get buyers like India and China who are ready to buy at any price. India's import bill last year was 100 billion dollar. So its not oil production thats driving prices high, its something traders, businessman and politicians are doing.
people write articles in your comments section too
Post a Comment