Let us get out of the oil dependency trap

Editorial, Main Stories

OIL products are all about us but we hardly notice them.
Oil is present in medicines and lipsticks, mobile phones televisions sets, laminated surfaces to fertilisers and disposable nappies to man-made polymer fibers in carpets, chairs, upholstery and clothes.
We use them without ever being aware of it.
All we ever think about when we see oil is automobiles and power generation.
Oil has revolutionised the world. This is the age of the big O.
And one day, soon, oil will become, like caviar (fish eggs), a niche product only the well-to-do can afford.
Within the next three to four decades, oil from major producing reservoirs around the world would be declining.
As supply from producing and therefore, far less costly wells drops, prices will increase around the world.
Unlike doomsday predictions, oil will never completely run out on earth.
There will be reservoirs in shale, bitumen and deep-water wells but there will be far greater associated costs to extract them.
The increased costs will translate to higher prices at the pump station.
In time, oil will just become uneconomical to extract in the kind of quantities and bulk sold at the dead cheap prices the world enjoys today.
Oil experts put the world’s total proven oil reserves at about 3,000 billion barrels, of which 1,000 billion is easily accessible using present technology.
The global extraction rate for oil was 75 million barrels of oil per day in 2000 and predicted to rise to 90 million barrels per day this year.
At that rate of extraction the accessible reservoirs will run dry within 30 years.
Given that the 1,000 billion barrels estimate was given in 2,000, we are looking at slightly less than 30 years.
In that time – for arguments sake take 2025 – where will PNG be?
By all accounts PNG will be very heavily oil-dependent.
With all the trappings of a just rich nation from the proceeds of major resource developments such as two LNG projects, Papua New Guineans will be flush with cash.
Oil dependent products such as automobiles, aircrafts, generators and oil-based products in material goods will be plentiful.
Just when Papua New Guineans begin to enjoy the material benefits that had been denied the bulk of the population for most of last century and the first two decades of this, the source that drives this material flush – oil – will run dry.
Prices will start to soar as supply drops dramatically or the cost of extraction of oil from difficult sources increases.
What to do?
That should become an immediate concern to be addressed now rather than leave it to then.
There are a number of common sense and economic reasons for that.
The present generation of people might complain now and then but they have lived their lives and with or without the comforts of material wealth and they will live out the balance of their lives any way.
Rather than wait until they are ensnared in a world of obscene materialism and then try to disengage them from it, now is the time to begin to plot a course away from heavy reliance of oil.
The time is opportune too because of the global climate crisis. Oil, being a fossil fuel, is a very big contributor to the excess collection of carbon in the air.
Using PNG’s wealth and pristine environment today to actively pursue cleaner energy sources will put it at the head of the new energy generation when the old oil based one becomes obsolete or too expensive.
PNG has the resources for it and a socio-economic climate that is not too hung up on the oil driven economies of today.
There is excess space, wind, thermal regions, waves and tidal action, rivers galore, and sun light 365 days of the year. PNG can tap into anyone or more of the new energy developments currently being tested around the world.
Rather than invite an Indonesian company to build a coal burning power generation plant in Madang as is planned, PNG should be bringing in smaller but technologically advanced and innovative companies experimenting with new energy sources. Yes, it might take longer and yes, there might be many failures before a foolproof clean energy source is available for mass consumption but when that happens, PNG will be far ahead so as to be in a position to export such technology to the world when that world needs it.
That seems to be the best position to be in than to chase the world all the way through history and still be at the tail end playing catch up when the oil driven economy comes to a stand still a mere two decades from this year.