Singapore Peak Oil

In a 2006 speech, Senior Minister of State for Trade & Industry, S.Iswaran, readily accepted the EIA's projections that oil will not peak before 2030.

The EIA estimates that oil production will not peak before 2030. World reserves-to-production ratio for natural gas is 67 years, and 180 years for coal. Rising energy prices will also spur more oil and gas exploration and increasingly render unconventional oil, such as tar sands, economically viable. In essence, actual physical reserves of fossil fuels do not appear to be the limiting factor in meeting increasing energy demand in the next few decades. Speech Link

Even as late as Nov 2007, MTI's Energy Report debunked the notion of an early peak oil date:

For oil and gas, proven reserves are estimated to be sufficient for only around 40 and 63 years of 2006 levels of consumption respectively. Nevertheless, oil and gas production is not expected to peak within the next two to three decades. With more exploration and improvements in extraction technologies, substantial new reserves will be added. Since 1980, globally proven oil reserves have expanded by 81 per cent, while proven gas reserves have more than doubled (p.13)

Fast forward to today, it appears that S.Iswaran and the Singapore government have acknowledged that peak oil might have arrived much sooner than expected as evident in the 2010 Economic Strategies Committee's report on "Ensuring Energy Resilience and Sustainable Growth":

There is a growing thirst for energy – driven primarily by Asia’s urbanisation and economic development – and the cost of energy production is rising as traditional sources of energy are depleted and the world turns to unconventional fuels that are more difficult to extract. (p.84) Report Link.

The report does not mention the term "Peak Oil", almost as if it were taboo, but it conveys essentially the same message with the words "traditional sources of energy are depleted and the world turns to unconventional fuels that are more difficult to extract." How euphemistic, isn't it?

Unfortunately, whatever measures that we take now to mitigate the effects of peak oil will probably be too little, too late (See the 2005 Hirsch Report which calls for a mitigation program 20 years before the peak). There will be painful social, cultural, economic and political readjustments in a post-peak world.

The Singapore government's continued insistence on senseless economic and population growth only reinforces my pessimism about our future survival in a world that is deep into overshoot, and my pessimism will only increase unless they begin to see the fundamental conflict between economic growth and environmental conservation and the need to abandon the fraudulent GDP as a measure of human progress, welfare and happiness.

Years from now, Singaporeans will quote a Cree proverb to educate their children and grandchildren on the folly of relentless economic growth at the expense of true environmental sustainability.

Only after the last tree has been cut down,

Only after the last river has been poisoned,

Only after the last fish has been caught,

Only then you will find out that money cannot be eaten.

-Cree Indian Proverb

Related Links:

Singapore Government's (MINDEF) Policies To Tackle Peak Oil
Peak Oil for Policymakers

The Ministry of Trade and Industry (MTI) published in Nov 2007 (p.13):

For oil and gas, proven reserves are estimated to be sufficient for only around 40 and 63 years of 2006 levels of consumption respectively. Nevertheless, oil and gas production is not expected to peak within the next two to three decades. With more exploration and improvements in extraction technologies, substantial new reserves will be added. Since 1980, globally proven oil reserves have expanded by 81 per cent, while proven gas reserves have more than doubled.

I had previously criticized this report for being too optimistic in its oil projections and economic growth outlook because they had taken as face value data published from British Petroleum (BP ) and the International Energy Agency (IEA).

In recent months, the IEA has changed its tune and its chief economist, Dr Fatih Birol, now believes that global peak oil production is likely in the next 10 years. See:

The Independent: Warning: Oil Supplies Are Running Out Fast

TimesOnline: World needs four new Saudi Arabias, warns IEA

The "early peakers" (ASPO and TheOilDrum.com) estimate peak oil to occur between 2005 and 2012. Whichever the date, it's probably too late to make a smooth transition to a post-peak oil world. Alternative energy did not save us during the runup of oil prices from $20/barrel in 1999 to $147 in 2008, and neither will it at $200 or $300 per barrel because the economy would have cratered at those levels hampering the development of these energy projects. Kurt Cobb has a wonderful explanation here: Receding Horizons for Alternative Energy Supplies

It'll be interesting to see what MTI has to say in their next energy report in view of the recent IEA changes. Any attempts to sidestep this issue as the IMCSD did in the Sustainable Development Blueprint and further promote unsustainable growth will only spell disaster in the long term.

Singapore's Ministry of Trade and Industry (MTI) has a published a report (dated Nov 2007) on Singapore's energy policies. You can download it here: Energy For Growth - National Energy Policy Report

There are many things to commend about the report. It touched on the need to improve energy efficiency, reduce CO2 emissions, diversify energy sources, promote public transport and to control air pollution.

But to be blunt, it's better titled Energy For Unsustainable Growth because even though they keep repeating the word "sustainable", their policies really are UN-sustainable as they seem to have a total disregard for the axioms of sustainability outlined by Bartlett and others. Throughout the report, the impression given is that economic growth is always good, essential and limitless. Overpopulation was not touched on.

The core objective of our energy policy must thus be to secure Energy for Growth. (p.22)

If overgrowth in consumption and population are the root causes of our environmental concerns, then why do our policymakers continue to establish growth as the "core objective of our energy policy? Is more growth the answer to our problems? Does it make any sense at all? If smoking is causing you to have poor health, then the natural and logical thing to do is to stop smoking. If overgrowth is the problem, then non-growth or anti-growth is the solution.

Here's an analogy: Eating when one is hungry is satisfying and nourishing. Following our policymakers' logic, if eating is good for you then overeating must be better!

What does "grow" mean? What do you mean when you tell someone to "grow up"? Most people would agree that to grow means to expand; to increase; to gain. But an overlooked definition of "grow" which is more applicable to our economies and population is "to reach maturity".

Let's look at some other definitions of "grow":

American Heritage Dictionary: "to develop and reach maturity"

Merriam-Webster: "to spring up and develop to maturity"

Etymonline: Grown-up (adj.) "mature" is from 1633; the noun meaning "adult person" is from 1813

A child who grows up and reaches physical maturity is said to have "grown-up". If he grows any more, either taller or sideways, then it's a possible sign of ill-health. A "grown-up" continues to grow by developing knowledgeably and spiritually, not physically. Even if he or she develops physically with regard to muscle building, it should be obvious that even then there are limits as we cannot expect a bodybuilder to attain the strength of a gorilla or an elephant. There are, however, no limits to knowledge and creativity.

When our economy has "matured" to a certain stage, or when GDP reaches a certain level, it's time to say enough is enough - the economy cannot grow forever. There must come a point where we have to learn to be satisfied with our material achievements and move on to qualitative or spiritual development for the earth is finite in matter and energy and cannot satisfy all our physical wants. If owning a car makes you happy, will 10 cars take you to heavenly realms?

Now for the most disturbing part of the report:

World proven coal reserves are equivalent to 147 years at 2006 consumption levels, based on the British Petroleum (BP) Statistical Review of World Energy 2007. For oil and gas, proven reserves are estimated to be sufficient for only around 40 and 63 years of 2006 levels of consumption respectively. Nevertheless,oil and gas production is not expected to peak within the next two to three decades. With more exploration and improvements in extraction technologies, substantial new reserves will be added. Since 1980, globally proven oil reserves have expanded by 81 per cent, while proven gas reserves have more than doubled. (p.13)

This is so wrong I am astonished MTI even had this in the report. Compared to climate change, now I know why the Singapore government has paid scant attention to the peak oil problem - because they take BP's Statistical Review as gospel truth.

(Compare the Google search results of "climate change", "global warming" and "peak oil" in the .gov.sg domain. The results are 3000, 1560 and 3 respectively. Climate change and peak oil are related because they result from human dependency on fossil fuels.)

The current CEO of BP, Tony Hayward, disputes the peak oil theory and it was reported that he entered a wager with Kjell Aleklett of ASPO to bet that global crude production in 2018 will be greater than the current daily output of 85.5 million barrels per day. My bet's on Aleklett.

Let's review some points:

• Global oil discovery peaked in the late 1960s
• Since the 1980s, oil companies have been finding less oil than we have been consuming
• Of the 65 largest oil producing countries in the world, up to 54 have passed their peak of production
• Oil production from existing oilfields is declining at a rate between 3 and 5 percent while oil demand has been increasing at about 2% per year
• World oil production growth trends have been flat from 2005 to 2008
• The 81% increase in global oil reserves since 1980 are not "proven" or audited. The large increases in the BP report stems from the fact that BP quoted directly from OPEC members who gave them phony figures. Their REAL oil numbers are a state secret. OPEC members grossly overstated their reserves in the 1980s to increase their production rights.
• Improvements in extraction technology will not add substantial reserves since the cause is geological limits. If it's not there, it's not there. You can't create oil from thin air. The North Sea was developed by private companies using the best technology there is with no restrictions on drilling, yet oil production from those oil fields have been declining since 1999.
• If you factor in dramatic increases in coal usage to make up for oil and gas declines, taking into account also the Hubbert Peak phenomenon and the varying coal qualities and accessibility, Energy Watch Group predicts coal to peak in 15 years.

Sources:
http://www.energybulletin.net/primer
http://en.wikipedia.org/wiki/Oil_reserves#Middle_Eastern_reserves
http://en.wikipedia.org/wiki/Peak_oil
http://www.energybulletin.net/node/5655
http://www.energybulletin.net/node/29919
http://www.energywatchgroup.org/fileadmin/global/pdf/EWG-Coalreport_10_07_2007.pdf

Whoever wrote that part of the report is seriously disconnected from the real world. Note that this report was published in Nov 2007, when peak oil was already making its way into mainstream media. Seriously, who the heck wrote that paragraph?

The Singapore government is clueless as to where we are heading. We are sleepwalking into an energy crisis.