Sunday, May 18, 2008
china eating itself
i find interesting some aspects of the high oil prices. the high energy prices are driven on the bulk by the hunger of china and india. all studies are forecasting that the oil prices will continue growing - possible on 200 usd. it will change the 'flat world' how we know it: transport cost will grow dramatically and it will change our world economy. cheap labour cost countries will lose their competitiveness. globalisation will continue, but on a regional basis: europeans will produce in north-africa, eastern-europe; ameriacans in latin-america. europe can profit from high oil prices with the growing alternative energy shares: that way more money will stay in europe not by the oil exporting countries, and these masses of money can be the motor of a new economical growth - which is also more susteinable. and as europe is the frontier of alternative energy we can stay leaders in the world.
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2 comments:
Hey,
I like your blog, some interesting subjects you come up with!
On the alternative energy (sun, wind, nuclear, waves etc) subject: they still do not produce enough energy to replace (even in 20-30 years) oil and gas in europe. And when they eventually come up with another source of energy, is it not possible that it would be easy to imitate by other developed countries in the world? The fact that globalization (in the broad sense) will deteriorate due to the energy issue is interesting and makes sense.
Another point that I find strange is the ambiguity about when the oil reserves will be finished. Of course it depends on economic growth, but I think there are enough smart minds in the world to come to a fair estimation.
hi Alex,
i'm happy you like it!
about energy issues: as i was 'researcher' for this short time i had to deal with energy matters and had to read through bounge of analizes, so i have found a lot of interesting stuff.
the oil is actually only essential for transport, energy can be easily produced without fossil sources, and we have coal for 300-400 years.
the big problem with engergy is that investment costs are brutal, project periods are long (it can take 10 years to open up a new power plant) and these investments are determinateing the energy supply for more decades.
oil production is at the peak point right now, or in the coming 5-10 years and as consumption is growing it is not a sustainable growing scenario. there is also a huge problem that oil exporting countries were not investing enaugh in the production - and as these projects need also more years or decades till productions there will be a shortage.
if we can accept that we will not have enaugh fossil energy it is time to think after - maybe alternative energy is not profitable with today's prices, but if you count for the hole lifetime of a power plant (say 30-40 years) in the long term they are the good choise. actually wind power with today's prices is competitive with common energy sources.
the ideae of co2 trade is also a good path what europe is takeing (but a bit slow) - if companies have to pay for the negative externalies what they cause it makes alternative energies more competitive.
but i think oil exporting countries and oil companies are intrested in that that we will burn the last drip of oil and they will not let oil price get too high.
and to change our hole infrastucture based on oil takes also more decades.
and today's high oil prices we can thank also to the speculating finance companies (thanks also for the subprime crises!). the problem is with a lot of things that specially american listed companies care only about the revenues of the next quater and do not think long term.
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