Peak oil – less faith

The major players in the Peak Oil paradigm are the energy importing and exporting countries and the big international oil/gas companies (Big Oil). Peak Oil consists of two complementary parts-the demand for oil, driven in part by China and India, outstripping the present supply forcing high prices, and the fact that the international supply of oil is at its peak or just past it. The exporting countries may be physically unable to supply this demand. Note the scramble by the Arctic countries to claim that seabed for the petroleum it is perceived to hold. The reactions by the three stakeholders are interestingly different.
The importing countries are desperately looking for alternative fuels, improving the efficiency of the fossil fuel utilisation and are taking another look at nuclear energy. The OPEC exporters are collaborating on the marketing of a scarce resource and constraining exports, forcing prices up (with the related gas price increases) to what the market could bear. Many exporting countries’ industries depended on, and gave large profits to, Big Oil, companies that brought capital and expertise to the table.

Exporting countries in this period of scarcity are seeking to regain control of their resources and they are looking towards direct exploitation. Russia, Venezuela, Bolivia, Peru are in the process of exerting more control over their resources and Argentina is threatening Big Oil over their expenditure in exploration. Government-owned oil companies now control some 93 per cent of the world’s proven reserves.

With world wide shortages of oil and production apparently past its peak, these governments have finally appreciated that in co-operating they can make the profits typical of Big Oil. Further, such countries are looking at developing locally owned higher added value downstream clusters to take advantage of the knock-on price increases in petroleum derivatives. Thus, exporting countries are using their own people for industrial development and where the skills are not available, importing other expertise, not Big Oil. Lastly, many of these exporting countries are cash-rich and their official reserves can attract loans for local development. Big Oil will assume their old roles moreso in underdeveloped countries, whose governments have in the past squandered oil earnings or stolen them.

Trinidad Express