Biofuel: An option taken for granted

Recently, oil prices have again turned the world and the country into a frenzied atmosphere. It is an extremely hot issue in a relatively cold and wet season. Nobody wished for it, not even the country’s giant retailers since high prices will require more capital. Unfortunately, like an amputee’s ubiquitous cane, it will be a permanent fixture in our daily routine. It is simply unavoidable. Fortunately though, its truest impact wasn’t fully felt with a stronger peso.

Coupled with the ill effects of the ongoing drought, Filipinos are a bit jittery this year. Moreover, their livelihood severely affected, the public transport sector is restless. As an independent oil price review committee (commissioned by the Department of Energy) found no irregularities in local petroleum prices, they are mulling the possibility of deregulating the transport industry instead.  

The reality is, today, oil prices are no longer just a consequence of the interplay between supply and demand. Truth to tell, in trying to cushion the impact of the ongoing political instability, the Middle Eastern countries are trying to cope with their ballooning budgets for social welfare concerns by increasing the prices of their petroleum products (their only source of income).

In the near future, however, the supply side situation can go worst. Needless to say, giant oil fields are aging and new discoveries are scarce. Some great oil finds between 1930 and 1960 are more than 40 years old. Some of these oil fields have peaked several years ago and are on the decline in recent years. Even the Ghawar oil field in Saudi Arabia, the world’ biggest oil field which was discovered in 1948 has declined in recent years. Though in 1948, its size was reportedly between 66 to 150 billion barrels, and supplied half of Saudi’s oil out for decades, the country’s production in 2007 dropped by 6% (from 9.15 million barrels per day in 2006 to 8.62 in 2007).  

Moreover, several studies of highly respected geologists have been made. Kenneth Deffeyes for one, said in his 2005 book, Beyond Oil, that in his opinion the peak will occur in late 2005 or in the first few months of 2006. Youngquist and A. M. Samsam Bakhtiari of the Iranian National Oil Company each projected that production would peak in 2007.   The more disturbing result from these studies have been the one of the Energy Watch Group in Germany, which recently analyzed oil production data country by country. They also concluded that world oil production has peaked. They project it will decline by 7 percent a year, falling to 58 million barrels per day in 2020. Obviously, therefore, even if the recent world consumption that is estimated at more than 80 million barrels per day stays, the world will thirst for oil by then.    Oil prices will be unimaginable.

Then, forget about travels since airfares will be exorbitantly priced. Demand for cars will plummet. The manufacturing sector will be severely affected. Consequently, unemployment rates will be uncontrollable. 

To Pres. Arroyo’s credit, this fact was well recognized during her term.   The truth is, an appropriate legislation (the Biofuels Law in 2006) was passed then. As has been customary in this country, however, the implementation was a big failure. Thus, after spending PhP1 billion of the PhP1.4 billion budget for the jatropha biodiesel initiative, the project was totally abandoned. 

Knowing that the prospect of finding new wells is remote, and in one great find, countries will even entertain the prospect of war just to get hold of it, the quest for other alternatives should be a must.  

Thus, let us pursue legitimate and lasting solutions. Having in mind that lands devoted for food production should be spared, with the remaining PhP400 million (out of the PhP1.4 billion), our biofuel program should be vigorously pushed. Stay lackadaisical and this program’s prospect shall remain as barren as a centenarian’s womb.

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