Chapter 3: Understanding the consequences and effect of the future crisis

14 Oct 2006 : The world around me is revolving around the oil price going up and down like a roller-coaster ride, within a day the oil price can go up and down few cents at the time….not much to normal consumer but for investors on Energy Related shares…it means few thousands dollars earn and loss.

Me, I never bet my life on investments right now…hack I don’t believe in credit, loans, unit trust or any type of shares and stocks that “promise” guarantee returns or capital protection. As many would think otherwise may argue with me but simply put…we might have the ride of our life in the stocks when the economic crisis looms…Now it’s the steady supply of crude oil and natural gas that is pulling us up the economic growth.

Let’s talk about oil…will oil runs out? Nope never…but cheap oil will… The reason is world oil is going to peak leaving about half of the oil still in the ground but gradually getting more difficult and expensive to extracts. More oil can be found in the most politically challenging countries and in deep under the sea (5miles?) and hurricane prone areas… these supply might not be reliable in the future and the cost will cripple the industry badly…leaving energy security to other alternatives such as Natural Gas…oh…

Natural Gas too have their time, now the world is racing against time to sign contracts all over the world for LNG (Liquefied Natural Gas). The demand suddenly shot up due to realisation that oil is not going to be abundant and cheap anymore…but hey China is not going to be able to slow their growth in consumption of oil OR GAS…huge demand in USA, Japan, India, Hong Kong, China, Canada (yes), South Korea and many more including Singapore…and only few important but unstable source…namely Russia, Qatar, Australia, Iran, Nigeria, Iraq and Indonesia and Myanmar…and do discount North Sea (they are declining too fast).

The consequences of higher cost in energy will translate to high inflation everywhere, from transportation, rental, housing, food, travel, electricity, water, medical, chemical, tourism, technology and many more. It’s the life blood and internal security of every countries to have cheap cost of living.

Transportation send fresh bread, newspaper, people, medical supplies, milk, goods, emergency personnel, police, technician, plumber, electrician and many more into cities that does not have huge amount of food to be sustainable in long term disruption in gasoline.

The products made from refined oil are way more then we thinks…from Lubrication oil, Paraffin, Wax, Asphalt, Pavement, Industrial fuel oil, Heating oil, Diesel, Kerosene or Jet Fuel, Gasoline or Petrol, Petroleum gas, Styrene, Polystyrene, ABS, Styrene-butadiene (SBS) rubber, Styrene-butadiene latex, ethylene, poly-ethylene resin, bags found in retail shops, propylene, poly-propylene resin, KEVLAR, NOMEX, solvents — aromatic, alkyl and these products created over 2000 items around us which I won’t need to list them all here.

Simply put, without cheap oil…the cost of living will be extravagant and costly. We need to understand why we are alive and find more things to justify living in this world of high cost and ever increasing work load…and devalued money. Should we be content with just food in our mouth and sacrifice our way of life? Or should we prepare to invest in renewable to sustain our lifestyle without heavy burden forward in our future?

Alternatives to oil are plug-in hybrid vehicles that you can charge overnight however electricity will be costly affairs unless we have hydro-electric, geothermal, nuclear (increasingly expensive), huge solar or wind farms. If using fossil fuels like natural gas, we will need to compete again with the world for electricity generation.

The dilemma for renewable energy source is that it is not profitable for big corporation or venture capitalist to invest on as those energy cannot be quantifiable and charge accordingly.

Therefore the only success will be expensive hydrogen fuel cell, bio-fuel, ethanol and other measurable fuel…regardless the cost of production and ignoring the ERoEI (Energy Return over Energy Invested) theory that it may cost more energy to produce these fuels.

I predict that in the future there shall be a revolutionary open source energy that plans to create such free energy cars can be distributed via Internet and is simple enough for everyone to make their own cars in their own back yard. The rich and famous will still be driving huge Humvee using costly energy fuels but soon will switch to more cost effective free energy cars.

There are many free energy that is being covered up by the world governments and corporation in other to protect their existing costly fuel combustion obscene profits and possibly we might never ever see one free energy plans until the breaking point for the world starts to find out these best kept secrets…

If one day you find a secret energy devices, don’t be alarm…just learn it…then spread it! The world depends on your discovery to survive into the future. Of course you won’t be rich…but at least the world will survive another day without costly energy wars and chaos.

The human nature to be greedy might forbid a happy ending, our self destructive nature will eventually kill most of us in the future. Those people who invest in energy related stocks, Gold, Uranium, electricity and many more will wish the cost of energy to go up…so they can enjoy a good retirement. These people might have control to our lives, governments, corporations, countries, individuals that will dictates our way of life without knowing the consequences of their actions.

The pure survival of the world base purely on many unique individual, corporation, companies, government to change their way of life view on profits and consequences. The environment will be thankful eventually to our changes….and let our future generation live a better life.

If all governments starts a zero emission policy to tax more on those cars with hydro-carbon emission to promote more electric-plug-in hybrid cars with more incentive to live more environmental friendly…will be more economically sound and competitive then those do not.

Recycling waste, better energy saving building designs, use less oil related products (a bit harder), have your own personal food crops in urban corridors using naturally produce compost and many more…

If a revolution is pending, it is now.

“No Fate, We control our own future” – Terminator 2

Chapter 2: The wave withdrawal before the Devastating Tsunami of Peak Oil

2 Oct 2006 : I work up late today and managed to reach the MRT by 7.35 am and collected my free “Today” newspaper but still purchase my usual paper “TheStraitsTimes”.

I saw the “Review” section and found an article by Mr Ng Weng Hoong from energyasia.com on the topic of “World oil reserves : Are we at the tipping point?” I read with earnest and realised that what I had known previously in http://www.peakoil.com/ and http://www.lifeaftertheoilcrash.net/ and other website have some credibility and may had predicted our uncertain future.

In the hazy morning, drinking my $1 kopi-peng (Ice Coffee) at the coffee shop opposite Tiong Bahru Plaza. I began to wondered in my thoughts….

“Oil prices had fallen again and OPEC had announced to cut oil production” …….. I overheard another table’s conversation…

“….must be the good times had come!” I thought…then again…with the article in hand…maybe with lower oil prices may had forced OPEC to abandon or halt extraction of small or old oil fields that are no longer profitable…and what’s left are going to be in the most unpredictable regions in the world as mentioned in the article.

ok, 8.29 am got to go back office…with a heavy heart I went to work.

4 October 2006 : After work 5.30pm, my colleague had driven me to attend a World Internet Secrets Seminar at Sheraton Tower Level 2. We arrived early and went to Newton Circus to have a quick bite while we discussed what other ways we can make money.

The first reaction is shock to have many people approaching us asking if we need any food from their stalls. We felt it is pretty rude to be approached this way like in the orchard rd roadshow (no pun intended) and rejected them all.

We had a survey afterwards and found out all the prices had gone up…wah! Chicken Rice $4, Fish Soup $4, and others mostly $4 and above and we end up eating the Hokkien Fried Noodles which may be the only $3 food available there!

We found out that the surrounding people are mostly Ang Moh (Foreigners) and felt out of place. The changes might not be their fault, the rental might had gone up after the renovation and many may have to raise their food price if they want to sustain their living.

Looking back…and I bet the inflation of rental and their energy bills might be the cause of these changes. The world will be more competitive very soon with higher inflation caused by market forces for the limited energy resources….

Shaking our heads, we left the place knowing we won’t come back anytime soon….such a waste….

Earth’s Revenge: Chapter 1 – The Denial

(Note: This is a fictional story base on the peaking of oil production and the world moving on to a world unknown to man kind in many transitions as mentioned by Dr Ali Morteza Samsam Bakhtiari as T1,T2,T3 T4)

Chapter 1: The Denial

I had lunch with my company’s President Mr Lee with my other colleagues today, the discussion varies from where we are previously from and what is our job scope in the company and our directions will be. (He knows the one beside me is leaving the company next week) The conversation diverted to China and energy supply and future of world with more expensive oil.

The reply from him did shock me a bit, he mentioned that the economy will self correct itself creating a demand destruction. A simple logic that almost defied believe yet sadly it’s true, he went on saying if it’s too costly to turn your air conditional on…simply switch it off!

When the world are using less oil, the prices will eventually comes down and be affordable again…this is the reply from the president of a multinational company that I work in.

He is actually talking about a recession and when people like him can move overseas or profit from trading in energy shares and the rest of us going to “shut down” and wait for the economy to self correct in a harsh way.

I thank him for a nice lunch and went back to work later, half way through the day I felt the strangest feeling of dread…but continue anyway.

Oct 1, 2006: Public transport had just increase their fares by 1 cents to 3 cents per trip, I had to wake up half an hour earlier to avoid the morning crowd now as more and more people is using the public transport…and also to avoid 7.30pm “Today” free newspaper crowd.