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The Obsolescence of Oil As We Live Out the Current Technology Wave


With every new green announcement on the global technology stage we get propelled further into a reality where oil may no longer be dominant. Whether its France and India committing to phase out gas powered cars, Tesla’s quest to revolutionize the global perception of renewable energy cars or the increasing rate at which many of the earth’s inhabitants are being displaced from their habitat, the moral, health, economic and ecological arguments seem to be gaining traction after decades at the fringes.
The importance of oil may endure the same fate that coal did at the turn of the 21st century. While it’s arguable that oil still has a role to play in the markets for a long time coming, when countries such as India (Nigeria’s largest oil patron) set policies to cut oil receipts by half by 2030, then it explicitly highlights the energy direction of these countries in the future. In the short term, this downturn in oil demand will no doubt be painful, especially as Nigeria needs oil revenue for a full economic recovery.
However, if the country explores options in agriculture and low cost manufacturing then the medium to long term opportunities for wealth creation might be restored. Unfortunately, the likelihood that policymakers will recognise the urgency of this new risk to future income levels is a bone of contention, particularly given the slow pace of implementation of policy actions towards diversification following the 1980s oil crisis and the 2016 oil crisis.


Changing dynamics in the global energy market mean renewable energy is on the rise

Crude oil accounts for 78.3% of Nigeria’s exports and India imports a significant amount. The new draft of the Indian National Energy Policy (NEP) is set to exceed its commitments to the 2015 United Nations Climate Change Conference (COP21) with the shift in its green car policy. The government plans to shift to electric cars from hybrid or traditional fossil fuelled cars, in the bid to cut its oil imports by half by 2030.
India’s neighbouring country of Bangladesh is also joining the pack with the increased patronage of solar energy as a source of power. Solar panel installation has more than doubled in the region owing to its relatively low cost burden. In Europe the French, German and British governments have also aggressively pursued policies, which will reduce their oil import dependence by exploring alternative sources of domestic and industrial energy. Renewable energy consumption in the EU28 spiked to 13% in 2015 and is on course to meet the EU’s target of 20% by 2020.
The rhetoric in the technology sphere is that cost of renewable energy projects is high and as such the riskreturn ratio does not foster further patronage. However, stakeholders in this field beg to differ.9 According to Adnan Amin, DirectorGeneral of the International Renewable Energy Agency (IRENA), asymmetric information has discouraged investment in the renewable energy industry in the past.
The industry has matured and become more costcompetitive, realities that are not justified by the level of investment. Therefore as this information feeds its way through the global market, a spike in investment opportunities is anticipated.

Meanwhile, Nigeria remains heavily dependent on its oil revenue. Proceedings for the 2018 budget have begun and the Minister of Planning and Budget is toying with the idea of benchmarking government revenue on a very bullish oil production level of 2.3mbpd. While the ministry has remained quiet on the price, given the current uncertainty in the global market, increasing production hinges on the idea that there will be demand for the commodity. With the big policy changes described above, the need to diversify the country’s revenue portfolio has never been more pressing.

Path towards diversification

The export led growth model, which Nigeria has adopted for years, could still work in its favour. However, Nigeria will need to seek policy paths for diversifying its various sources of export revenue. A case study example is the Indonesian economy. It looked to diversify its revenue despite being rich with oil. This led to increased comparative and cost advantages in agriculture (rice) and low cost manufacturing.
Like many emerging markets in the world, the Indonesian government suffered tremendously from political strife in the 1960s and as such the economic health of the nation took a back seat to this reality. However as the country is geographically blessed with natural resources, it benefited significantly from two oil booms in the 1970s (1973/1974 and 1978/1979). At the peak of the oil boom, broadbased development polices, such as directing oil revenue towards natural gas development, was adopted.
By the 1980s, export led growth policies took centre stage as the rupiah was devalued (competitive advantage in the global market). New fiscal policies were also adopted with the introduction of increased oil and nonoil taxes and general deregulation across sectors in the economy. These policies were all part of an outwardoriented strategy, which saw trade reforms such as exemptions for exportoriented firms from import duties. It ultimately promoted a favourable climate for domestic and foreign investors.


Lessons for Nigeria to Learn

Solidifying its comparative advantage in agricultural and mineral commodities could open the path for Nigeria towards a well diversified export portfolio. In the Indonesia example, the government took conscious steps to help prop up its export base and incentivize exportoriented firms. In Nigeria, the Nigeria ExportImport Bank is taxed with the responsibility of originating and executing ideas which would help support the growth of nonoil exports.

So far, although policies to enhance export trade have been explored, bureaucratic and financing bottlenecks continue to limit the scope of its achievements. Hence increased subsidies for the government, monitoring and awareness have to be imbibed in order to reach the target niche, exportoriented firms.

In the policymaking field, there have to be more calls for investment inducing polices that will encourage both foreign and domestic investment in the export sector. In Indonesia, there was a wide spectrum of deregulation with the purpose of fostering investment. In Singapore, a nation with no oil reserves, private investment was the reason for its ranking as one of the biggest oil refining hubs in the world, increasing its export of refined oil products. One of the restraints to private investment is excessive and undue government influence.

Regulation is a concept conceived from the idea that the consumer/public’s interest is at risk when asymmetric information exists in the market, which is the case in every market and economy. However, when policies become extraneous, the public actually loses as investment is curtailed.


The increased pressure from the global oil market and the fragility that ensues in the domestic market will enact accelerated focus and activity in adjusting the country’s revenue profile.
The question presents itself in how quick policymakers will adjust policy to encapsulate the reality of the impending obsolescence of oil. At the moment, given the position of the economy on the business cycle, it could be argued that the likelihood of policy shifts might be at an opportunity cost to more pressing government obligations. The detrimental effects of folding arms and banking on oil to steer the economic course of this country are vast.
Nigeria is very much susceptible to global risks and more than ever, it lacks certain facilities to restore the economy in the event of another global crisis. Therefore to avoid a total economic catastrophe, economically and politically, it needs to begin the process of hedging the country’s well-being against risk and uncertainty.


34 Comments on "The Obsolescence of Oil As We Live Out the Current Technology Wave"

  1. Cloggie on Fri, 8th Sep 2017 12:31 pm 

    Another nail in the coffin of the petrol car as the former Opel chef Neumann demands that the German car industry should invest massively in e-mobility, in order not to miss the boat (dubious choice of words) and others (China, US) will take over the business.

    German industry should reduce the number of petrol models they market und use these thus freed resources to invest in e-vehicle models.

  2. Apneaman on Fri, 8th Sep 2017 1:09 pm 

    clog, you and your buddies have been vindicated.

    Climate Change Researcher Describes Challenge Of Pulling Off Worldwide Global Warming Conspiracy

  3. MASTERMIND on Fri, 8th Sep 2017 1:38 pm 

    Just wait till the massive worldwide oil shortages hit the world economy in a few years. People will turn into animals.

  4. Cloggie on Fri, 8th Sep 2017 1:46 pm 

    “Just wait till the massive worldwide oil shortages hit the world economy in a few years. People will turn into animals.”

    Vocabulary: plundering = looting.

    Tourists are stuck in their hotels. Hotel manager is begging for a guard with a gun. Currently 200 Dutch marines at Sint Maarten, but that is not enough. The good news, for our Juan, Irma is weakening. The bad news, for Sint Maarten, Jose is underway. The island is a war zone. 70% infrastructure destroyed.

  5. Dave Thompson on Fri, 8th Sep 2017 1:57 pm 

    Without the oil in the market, there will be no EV transition. With oil in the market there will be no EV transition. The people selling the hopium of alt energy transition are the same ones that are selling you the idea of US energy independence.

  6. Laci on Fri, 8th Sep 2017 2:08 pm 

    Any EV with half decent range sells for about $35,000 or more. Kind of pricey for a mid-size sedan, which is why we are a long way from the end of oil. People need a reality check!

  7. GregT on Fri, 8th Sep 2017 2:47 pm 

    “Without the oil in the market, there will be no EV transition.”

    There would also be no markets, no need to commute to non-existent employment, and no concrete or asphalt for road/bridge repair and construction.

  8. Go Speed Racer on Fri, 8th Sep 2017 3:08 pm 

    LOL oil is obsolete.

    Makes good headlines for the Mitt Romney’s
    of this world. inside eating dinner and
    watching their 85″ curved flat screen,
    and their 6-car garage nearby and
    full of Cadillac Escalades.

  9. Apneaman on Fri, 8th Sep 2017 3:17 pm 

    Hey clog, don’t cha need tons of sand for all your hi tech green dreams? Ya you do & so does the rest of the Cancer.

    -Science 08 Sep 2017

    A looming tragedy of the sand commons

    “Between 1900 and 2010, the global volume of natural resources used in buildings and transport infrastructure increased 23-fold (1). Sand and gravel are the largest portion of these primary material inputs (79% or 28.6 gigatons per year in 2010) and are the most extracted group of materials worldwide, exceeding fossil fuels and biomass (2).”

    “Rapid urban expansion is the main driver of increasing sand appropriation, because sand is a key ingredient of concrete, asphalt, glass, and electronics. Urban development is thus putting more and more strain on limited sand deposits, causing conflicts around the world (5). Further strains on sand deposits arise from escalating transformations in the land-sea interface as a result of burgeoning coastal populations, land scarcity, and rising threats from climate change and coastal erosion (5). Even hydraulic fracturing is among the plethora of activities that demand the use of increasing amounts of sand. In the following, we identify linkages between sand extraction and other global sustainability challenges.”

    “Cascading Effects

    Such environmental impacts have cascading effects on the provisioning of ecosystem services and human well-being. For example, sand mining is a frequent cause of shoreline and river erosion and destabilization, which undermine human resilience to natural hazards such as storm surges and tsunami events, especially as sea level continues to rise (10). In Sri Lanka, extensive sand mining exacerbated the impacts of the 2004 Indian Ocean tsunami; ironically, sand demand for coastal restoration increased in the aftermath of the tsunami (11).”

    We need a sand EROEI so we can endlessly argue about peak sand.

  10. Boat on Fri, 8th Sep 2017 3:22 pm 

    It will be nice to have no oil bill. Back to New York strip steak and large shrimp. Lobster tail, juicy scallops and watermelon salsa as an appetizer.

  11. Antius on Fri, 8th Sep 2017 3:34 pm 

    “German industry should reduce the number of petrol models they market und use these thus freed resources to invest in e-vehicle models.”

    Well, the Germans have never made any bad investment decisions have they? In for a penny, in for a pound, I guess.

    Amsterdam has got some really cool electric vehicles. I nearly got run over by one of them last time I was there. They are far more energy efficient than electric cars, do not require any R&D and draw power directly from the mains. That’s important, because batteries cost a lot, weigh a lot, have a lot of embodied energy and charge / discharge cycles waste more energy.

    Trams are things that we know we can afford, they are scalable, require no new technology, no rare elements and we have them already. Since we are apparently moving towards an all renewable future, an energy solution that will cost a fortune, I would humbly suggest that the most energy efficient solution is the best.

    A renewable energy future isn’t just about building new energy sources. It will need entirely new ways of life.

  12. Cloggie on Fri, 8th Sep 2017 3:42 pm 

    100 years ago they even had more trams than today:

  13. Anonymouse1 on Fri, 8th Sep 2017 3:54 pm 

    Which problem needs to be solved first cloggen-fraud? The self-replicating, self-installing wind turbines and solar panel problem? Need those to power all those robo-cars, because in cloggens-frauds world, coal, nuclear and gas are yesterday’s news.

    Oh, wait, you’ve claimed those exist *now*, but only in Hollandia, apparently.

    Now, it is your unspecified ‘battery problem’. Whatever. BtW, your ‘inherently cheaper’ claim is another of your (many) flat-out lies (imagine that). But you love cheery picking too much to give up now.

    Fact is cloggen-fraud, the claim that EVs are ‘cheaper’ is deliberately misleading because comparing fuel costs, gas vs. kw/h of electricity in this case, is only one criterion and a very narrow one at that. EVs will not reduce the overall costs of car-dependency in any real way. Cars are expensive. EVs are expensive. Maintaining either, and or both, will continue to be expensive. Rising insurance, infrastructure costs and even rises in the cost of electricity could easily nullify any the alleged ‘cost benefits’of EVs. And cost is of course, forms the basis of cloggen-frauds endless prostetying on the issue.

    Cloggen-stain seems to live on a version of Earth where all costs are either a) fixed or b) decreasing(lol), and never increase over time. I suppose on a planet like that, EVs might make some sense, but again, if you only consider the very narrow range where some cost savings might be realized and disregard all the other costs cars impose.

  14. Antius on Fri, 8th Sep 2017 4:06 pm 

    “100 years ago they even had more trams than today:

    Sweet. I can’t help but notice that things looked more alive back then. People had less money, but they look smarter and a lot more civilized. The world was more structured.
    People didn’t have relationships, they had families. Crime was something that was rare. Sex was something that happened in marriages. How could things go so wrong?

  15. Cloggie on Fri, 8th Sep 2017 4:40 pm 

    It is not irreversible.

    Sometimes something happens what progressives disparaging like to call “reaction”.

    After the leftist/commie French Revolution (France is bizarrely commemorating every year on July 14 that they killed their best people)…

    We seek him here, we seek him there,
    Those Frenchies seek him everywhere.
    Is he in heaven? — Is he in hell?
    That damned, elusive Pimpernel

    …we had the defeat of Napoleon and the Revolution. After the Vienna Congress we had the Restoration/Reaction and a rather quiet and peaceful 19th century, until the commies got the upper-hand again a century later and ruined the 20th century, from Hannover to Vladivostok.

    I’m betting on a slow, “reactionary” 21st century.

    IS is a small sign of things to come: the return of archaism.

  16. Boat on Fri, 8th Sep 2017 6:28 pm 

    100 years ago only about 1/2 of the US had plumbing. Stinky gatherings. Cooking was primarily done with coal and wood. Life expectancy about 54. Most people walked. Yea, great life.

  17. Cloggie on Fri, 8th Sep 2017 6:54 pm 

    No need to despair with Trump, there is new Democratic hope at the horizon:

  18. Anonymouse1 on Sat, 9th Sep 2017 2:35 am 

    Exactly, boatietard, now, thanks to miracle of modern (everything), retards like you can sit in your PVC mobile homes, hanging on every word from CNN and the 700 club well into your 70’s or 80’s, or beyond in some cases(unless you happen to be black).

    As for how bad you smell boatietard, thats for you and you alone.

  19. makati1 on Sat, 9th Sep 2017 3:39 am 

    Boat, about 1/3 of the world still lives like that or worse. I think they would like to live that long and only have a few smells to complain about. When I was a kid, my grandparents had an outhouse until the early 50s, and my best friend did not have indoor plumbing until he was in his teens (late 50s). That was less than 60 years ago. That day will come back. I hope you are stocking up on lime and old Sears catalogues. LOL

  20. Anonymouse1 on Sat, 9th Sep 2017 3:55 am 

    Boatietard has stocked up on instant ramen noodles, and has a supply of plastic former pool chemical pails he liberated from..who knows where, which he plans to use to store rainwater.

    He is totally prepared the end-times.

  21. TheNationalist on Sat, 9th Sep 2017 3:58 am 

    Meanwhile here in good ‘ole South Australia I just got my end of winter gas bill ( we have a gas heater for our central heating).
    Yes you guessed it, a 100% rise in costs per megajoule. Hyper inflation meets energy crisis nationwide and our “leader” Turnbull is in Samoa explaining how he will hold the rising sea back on pacific islands (perhaps these psychopaths see themselves as modern noahs in all this).
    I think you might be right Makati, I hope you’re not but I feel much poorer today.
    We have only used heating in evening for decades in my family and are not big users but the pain families are feeling here is real and we have taken a step down the ‘ladder’ here in Australia.

  22. Cloggie on Sat, 9th Sep 2017 4:39 am

    POWER prices are set to rocket after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states…. In its announcement today, EnergyAustralia blamed recent rises in wholesale prices following the closure of large coal-fired power stations, as well as increased demand for gas for export.

    I see you have about the same kWh price as in Western Europe:

    Strange, it can’t be the high cost of transition to solar, because there hardly is any, yet.

    Talking about solar, looking forward to the upcoming SolarChallenge!

  23. deadlykillerbeaz on Sat, 9th Sep 2017 4:56 am 

    TheNationalist, it is obvious you were paying only half of what you should have been paying all along. Yes, it is sarcasm.

    Actually, fossil fuels are the bargain energy.

    Natural gas fuels my furnace, hot water heater and stove top. All at a cost that is half of what I paid in 1999.

    The new 90 percent efficient natural gas furnace uses less than half the natural gas the old furnace used.

    My vehicle can travel 100 miles on about 6 gallons of gas. A bargain for 15 USD.

    Oil will be obsolete when it can’t be purchased. Until then, it is the number one energy source.

  24. Cloggie on Sat, 9th Sep 2017 5:01 am

    “After taxes, the [typical] household in South Australia will be paying slightly more than the [typical] household in Denmark, which currently has the highest prices in the world,” Mr Mountain said… I don’t believe it’s matched by the aggregate cost in the supply chain.

    Looks like the result of a electricity suppliers cartel.

    Price increases come despite abandoning a carbon tax.

    Australia does NOT have a climate and energy policy.

    While electricity prices and a lack of investment in new technologies is a concern to many in the industry, there is an attitude of increased urgency towards the threat of climate change after a summer of record-breaking heatwaves.

    “To drive down prices, we need more renewables, more storage and a national transition plan,” said Bandt on behalf of the Greens.

    Industry stakeholders in Australia’s struggling electricity market are also clear that the government’s opposition to renewables and unclear policy are presenting major barriers to investment in the sector — and driving up electricity prices.

    Even the industry says that prices can be brought down with renewables (Australia is very sunny).

  25. Davy on Sat, 9th Sep 2017 6:56 am 

    “Boat, about 1/3 of the world still lives like that or worse. I think they would like to live that long and only have a few smells to complain about.”

    Should not read like at condescending narcissist like above. It should read like a sober and humble caring individual like bellow:

    Boat, about 1/3 of the world still like that or worse. Boat you and I are living the western life let’s be thankful for the comforts and be ready for a worsening ahead.

  26. TheNationalist on Sat, 9th Sep 2017 9:40 am 

    I agree Cloggie, renewables are the future. Our solar system has paid for itself in the last 4 years and we use about 5kw per day. This usage is much less than average due to our home efficiency drive over the last 7 years. We will be addressing some insulation issues to cut our gas bill even more now. The electricity supplier cartel is one thing but the gas is sold by the same bunch here.
    This huge gas price rise will force a cut in consumption for the masses but it is our commercial businesses and industry that will also suffer more.
    We are blessed in SA with our wind and solar resources (we lead the nation) and smaller popualtion.

  27. Cloggie on Sat, 9th Sep 2017 10:06 am 

    Australia landscape:

    Australia NW dessert, no sand dunes, but hard floor, ideal for solar:

    With cars like these you can drive 3000 km through Australia without a drop of petrol, just on sunshine:

    An offshoot from the Australian Solar Challenge will be marketed soon:

    There is no country more suitable for fossil free driving like this than Australia. Sunny, no very high mountains, long distances, first world infrastructure and roads.

  28. Apneaman on Sat, 9th Sep 2017 3:37 pm 

    Technology wave crashing

    Equifax compromised 143 million people’s Social Security numbers and other data

    Some driver’s license numbers were stolen, too

    Alleged Equifax hackers demand $2.6 million Bitcoin ransom — or else…

    “That’s according to an onion site, whose authors insist that if Equifax forks over 600 Bitcoin — approximately $2.66 million at the time of this writing — then they’ll delete all the stolen data. Oh, and Equifax better decide quickly, because if the ransom isn’t paid, the self-identified hackers say they’ll dump all the data on September 15th.

    Well, almost all of the data. The supposed hackers wrote that they won’t publicly post credit card numbers — suggesting an intention to get some illicit use out of those.”

    Here are all the ways the Equifax data breach is worse than you can imagine

    Remember when they told you all that technology was going to make your lives easier? Ya, not so much eh?

    Now they have you doing your own banking, but still paying. They got many folks checking out their own groceries and other consumer goodies at ‘self serve’ machines – they giving you 5% off for the extra work? Got you doing at the Airports too. It all over and growing. At fast food joints now I hear. They also used to have a guy or gal pump your gas, but you doing that job too. You know because that’s technology making your life easier. Too bad our lives are just a bunch of numbers of government and corporate computers. A combination of 1’s & 0’s. And of course you are your credit score. I wonder if that’s because god wants it that way?

  29. Antius on Sat, 9th Sep 2017 5:16 pm 

    “POWER prices are set to rocket after three major retailers announced increases of up to 20 per cent and $600 a year for the average customer in some states…. In its announcement today, EnergyAustralia blamed recent rises in wholesale prices following the closure of large coal-fired power stations, as well as increased demand for gas for export.
    I see you have about the same kWh price as in Western Europe:
    Strange, it can’t be the high cost of transition to solar, because there hardly is any, yet.”

    Wind power dumped onto the local electricity grid under a feed-in tariff. This has the effect of artificially crashing the wholesale electricity price during times of plenty. It put out of business the very coal plant that it was relying upon for backup. Now backup is bankrupt and gone, huge increases in price are needed to allow import of power from other parts of Australia. Not exactly forward thinking.

  30. Antius on Sat, 9th Sep 2017 5:38 pm 

    “With cars like these you can drive 3000 km through Australia without a drop of petrol, just on sunshine:

    All very well so long as you are content driving a tiny, lightweight vehicle without any other payload, for 6 hours a day (don’t work at night) at low speeds – even at full sun 2 square metres of solar panels will generate about 400watts – little more than half a horse-power. It may have some limited applications on the almost empty roads of central Australia. Its hard to imagine it being useful in many other places.

    A more useful electric vehicle is a tram or electric train, powered by a catenary or third rail. These are technologies we have already. We now need to expand them and work around their limitations.

    Renewable energy is expensive and intermittent. When it is buffered with storage, it becomes even more expensive. It makes no sense retrofitting transport solutions that were designed for the abundant portable energy of the fossil fuel days in a renewable energy world. Few people will be able to afford electric cars powered by 100% renewable energy. But a train consumes far less energy per passenger km. Powering a train using buffered renewable energy is affordable because it is much more energy efficient. Adapting to a renewable world is not so much about new technologies as it is about new ways of life.

  31. Antius on Sat, 9th Sep 2017 8:34 pm 

    I can remember this being being started by Google:

    The ending of its renewable energy project certainly received a lot less publicity than its beginning. Here, two of the projects leading scientists have gone on record saying that renewable energy is a waste of time as a serious replacement for fossil fuels. These people know what they are talking about. They spent years trying to make it work:

    Again, remarkably little publicity. The powers that be in the media don’t want to hear it, nor do they want us to hear it. For a lot of people, the belief that renewable energy can power the world and is the successor to fossil fuel, is like a religious belief. No amount of fact or failure will convince them.

  32. rockman on Sun, 10th Sep 2017 11:09 am 

    “we get propelled further into a reality where oil may no longer be dominant.” Presumably that would be the future well beyond 2017 during which 80+ million I CE’s will be purchased (adding to the 1.2 billion current on the road) compared to the less then 2 million EV’s that will be purchased this year.

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