Oil & Energy

THOUGHTS ON ENERGY INDEPENDENCE AND OIL - 10/11/2008

Countries that trade a lot overseas and those that are developing countries that rely on one particular commodity seem to be particularly affected by recession and oil.

However, Arab states are unusual in that they have the oil and realizing it will run out are pumping in all their money to built an attraction to investors, MNCs, Banking and tourism much like Singapore and have targets to meet.

With the recession slowing everything down, the transport industry is now particularly affected by the higher oil prices. This affects exports which paradoxically affects these countries. Anyway, I think they are cutting supply in a staggered manner because they cannot afford to let all the oil be sold for peanuts and being unsure how long this recession lasts lose it for peanuts and be unable to afford to build their plans before things turn around.

But of course, by this policy of reducing supply, instead of demand going up people are just cutting further back, leading the economy further in recession as everything shrinks. But it seems that they are trying to find their new balance where the supply is low enough from them to stabilize the oil prices by a demand that is sufficient for the world relying on them to operate at reduced costs.

Of course , the fear is it will just continue to shrink as businesses cut back and eventually shrink and everything comes to a stand still. But hopefully, an equilibrium is established that businesses can manage as well as more people will move towards public transport where governments are directly covering the oil prices.

OPEC will have to also slow down on their targets and development and just ride this world bear market but obviously do not want their limited oil to dry up before development is finished. Seems like they need to find the balance between their costs for building the new cities at later targets against a rate that equates to the oil consumption and pricing on the new level and get more realistic about the state of affairs and interdependency of the world.

As for the oil with sand in other areas of the world that costs too high and requires enough demand to make it worth while.. seems like a hard one to call, as with this recession, it has become more apparent that we have to move to alternative energy options and Obama apparent cooperation to reduce carbon emission could mean that demand for oil will never quite go back to what it was?

So I am not sure what will happen and whether it is such a good idea to buy into these logistics rather than alternative energy ones in the US and northern Europe. The alternative energy ones seems like a sure option; especially those that are not from food sources as much as solar, nuclear and mechanical methods of conversion. And should not car manufacturers really start looking at alternative ways to power their cars.

Anyway bro, please share your thoughts a bit...to get ideas rolling...

****************************************************************************************************************************************************

Response...

I don't have a clear focus on the oil issue. My broad view is that our current level of consumption of material goods, and particularly the use (and abuse) of the planet's natural resources, is unsustainable.

As you covered in your mail, from a geopolitical standpoint, world power is definitely shifting away from the traditional base in Europe and America towards the oil-rich states in the Middle East, Eurasia, Russia, China's interests in Africa and so on. One thing is for sure, the move is on, and we are currently witnessing the fall of the Great American Empire of the 20th Century.

One question that engages me about the future, is how we will continue to live in a world so reliant on oil. I propose this question also in the context of our broader reliance on industry and technology, and the assumption that we cannot continue in the current way.

The first problem with the oil running out is that too many of our day-to-day products are based on petro-chemicals (by-products of the oil refining process), such as plastics, chemicals, synthetic materials, used in everything from manufacturing to food production, building, and so on. There is also the problem of our dependence on oil as a fuel, plus the damage its use causes to the environment. Basically, the fossil fuels that it took the earth billions of years to produce has taken us about 100 years to consume. We have reached the end of this road, so where do we go from here?

As I see it, we can either go backwards or forwards in our relationship with technology. To go back is fairly easy to envisage - we consume less, live in self-sustained local communities, produce our own food and water and energy, recycle our building materials, clothing and so on. It would be possible, but would require such a dramatic change to the way we live now, I don't know if people are capable of doing it.

The second possibility is that we go forward with newer and cleaner and better technologies. The problem with new technologies is that special interests have always used them to make more money, wage bigger wars, and gather more power unto themselves. I'm not especially blaming oil companies or the arms industry, or even the mega-bankers behind them, guilty as they may be this time around. If it wasn't them, it would have been someone else. The problem is not any individual or group or political or economic system, but rather the human ego that will always find a way to work the system to its own advantage.

We are at a point where the most pressing need is the evolution of human consciousness. Without a major breakthrough in the practice of human values and a global spiritual awakening, new technologies will only make things worse. First, humans must evolve, then the new technologies can emerge.

In conclusion, I really don't know where things are going. I believe that Swami's mission is to facilitate the transformation (both individual and collective) that we are undeniably going through. Our duty is to stay focused on Him, be courageous, be honest, and as He says, "fight to the end and finish the game." I don't know where we're going, and I don't know how to get there, but I am very confident we will make it. How's that for optimism?