Saturday, 19 February 2011
IT'S OFFICIAL... OIL IS RUNNING OUT!
And who says so? It's those nice people the investment experts who tell you where to invest your money! Not that I have money to invest you understand, but I like to know what is really going on in the world of finance. 'Invest in food/land' was a recent journal heading, "you can't eat money" was an unforgettable line of that article, which perhaps explains the rising cost of food as investors gamble on food futures.
The latest edition informs its readers that the increasing demands for and the ever dwindling supply of oil is a threat to the global economy, but is also a big opportunity for investors.
Fatih Birol of the International Energy Agency stated at a recent conference that "The age of cheap oil is over" and so oil companies are hunting far and wide to locate new oil sources, like tar sands. The demand for oil is increasing as, for only one example, China will need more oil. In the EU around 50% of people have cars, but in China, it’s around 3%, and China has a huge population, and now we have the recent political turmoil and upset in the Middle East, a region we in the West are oil dependent on. Iraq oil production, the article informs, is a critical element in increasing future oil supply, so that explains the war then...
The problem for the West is that as the political problems in Bahrain, Jordan, Egypt, Yemen and Libya spreads to their much larger next door neighbour, Saudi Arabia, that the oil price will increase and push the fragile Western economies over the edge of another slump.
The article talks about natural gas as one alternative, pointing out that it is located in politically hospitable areas. My thoughts are that Russia is not the most politically hospitable area, but compared to the Middle East they may have a point I suppose. So what are the investment tips? They are nuclear and renewable energy, and I bet that nuclear gets the nod.
The inescapable facts are though that our transport infrastructure is oil dependent and there is no alternative to oil, it is our primary energy source and it is running out. The sooner the world wakes up to those facts and values what there is the more chance that our children and grandchildren will have a viable future.
Posted by Fr. Peter Doodes at 05:15