23 April 2011

But on the supply side, it is not all pessimistic news. There is hope for new sources of supply. Time and again experts have warned that oil and gas deposits will soon be depleted and they calculate the year beyond which mankind will be out of oil and gas. But such talk of peak oil has been proven wrong many times in the past. And they may yet proved mistaken again because each time you think you have run out, oil companies have consistently discovered not just new reserves but also developed new ways of extracting reserves that previously could not be taped. Drilling in deeper waters, innovations like drilling tight shale rock formations to get that unconventional gas, better management techniques on oil fields so that you get out not just one-third of the oil which is there but even two-thirds of the oil which is there, which can make a tremendous difference. And in any case, whatever the prospects with oil and gas, as far as coal is concerned the supplies are sufficient to last mankind for centuries. Speech LINK
I was very surprised to read those comments by PM Lee concerning Peak Oil. It is not about running out of oil. Even geologists and peak oilers admit that there will still be oil left in the ground centuries from now, but it's just going to be prohibitively expensive to extract. Heck, astronomers have found more hydrocarbon liquids on the planet Saturn's moon Titan than all the known oil and gas reserves on Earth. Gee, we just need to construct a pipeline 1.2 billion km in length - problem solved. Hello PM Lee? It's all about CHEAP and AFFORDABLE oil which is the lifeblood of the economy. Do you think businesses and individuals can survive if they have to pay more for energy every subsequent year?

In years to come, those dubious statements of his will make him look ignorant and silly. There are enough evidence and historical records on the internet and major oil publications to show that some of the former major oil producing nations like the USA, Mexico, UK and Norway have peaked out and started falling precipitously in terms of oil production. There have not been any major oil discoveries in those places and neither is there any proven technology that could halt, offset or reverse their oil production downtrend. It is an established fact that these four countries are currently producing much less oil than before. When the rest of the world such as the Middle East and Russia peak for geological or political reasons and begin their slide in oil production, we can kiss our economic growth models and current standards of living goodbye

See http://mazamascience.com/OilExport/ to view each country/region's oil statistics.

I don't know why PM Lee made those statements. The 2010 Singapore Economic Strategies Committee had earlier identified peak oil as a challenge (see LINK), but PM Lee now says Peak Oil has been proven wrong? It's puzzling and alarming. The OilDrum website listed several possible reasons as to why governments would deny or be silent on peak oil:

1. They don't "get it".
2. Overly commited to neoclassical economics or "grow forever" economic models
3. Cognitive Biases
4. Misled by EIA and IEA
5. Blame on media (Not a word about peak oil in The Straits Times)
6. They can't talk openly about it
7. They want to avoid talking about it
8. They are doing something but don't want to alarm the public

Source: http://www.theoildrum.com/node/6100

I believe it's all of the above in Singapore's case.