quarta-feira, 25 de novembro de 2009

Price of Petrol

I have just been reminded of a conversation that I had with a friend about a year or so ago, it was at the time of a huge oil price surge and limiting of supplies in Europe. The Brazilian news channel SBT was mentioning the extraction of oil from Brazilian wells, and this as reminded me of what my friend said during our chat, that 'oil is too valuable to waste on vehicles of any sort. The reality is that the world of humans is now almost totally reliant on plastics and the basic component for manufacture of plastic is oil. This reliance will no doubt lead to a more enviromentally friendly vehical, although I am not sure how the jet aircraft will be superceeded and the desire for travel abroad be made some what more an unnessasary diversion for those that can afford the cost. Here are some remarks from the Institute for the Analysis of Global Security:
"China’s ability to provide for its own needs is limited by the fact that its proven oil reserves are small in relation to its consumption. At current production rates they are likely to last for less than two decades. Though during the 1970s and 1980s China was a net oil exporter, it became a net oil importer in 1993 and is growingly dependent on foreign oil. China currently imports 32% of its oil and is expected to double its need for imported oil between now and 2010. A report by the International Energy Agency predicted that by 2030, Chinese oil imports will equal imports by the U.S. today."
"China's expectation of growing future dependence on oil imports has brought it to acquire interests in exploration and production in places like Kazakhstan, Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada. But despite its efforts to diversify its sources, China has become increasingly dependent on Middle East oil. Today, 58% of China's oil imports come from the region. By 2015, the share of Middle East oil will stand on 70%. Though historically China has had no long-standing strategic interests in the Middle East, its relationship with the region from where most of its oil comes is becoming increasingly important."
"A key driver in China's relations with terrorist-sponsoring governments is its dependence on foreign oil to fuel its economic development. This dependency is expected to increase over the coming decade."
In the Western Hemisphere China concluded oil and gas deals with Argentina, Brazil, Peru, and Ecuador. But its main country of interest is Venezuela, U.S.' fourth largest oil supplier. A series of oil agreements signed in early 2005 allow Chinese companies to explore for oil and gas and set up refineries in Venezuela. Chinese state-owned oil companies have also begun seeking ambitious oil deals in Canada, the top petroleum supplier to the U.S. China’s continued penetration into the Western Hemisphere could have profound economic and political implications for the U.S. Considering the fact that both U.S.’ and Mexico’s domestic crude production are falling, the U.S. cannot afford to lose chunks of the crude produced by the two countries that together supply a third of its oil imports. With less oil available to the American market the U.S. will be forced to seek this oil elsewhere, primarily in the Middle East, hence becoming more dependnet on this tumultuous region."

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