Home' Trinidad and Tobago Guardian : October 27th 2016 Contents OCTOBER 27 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
This week s oil prices put the
industry at a value of US$1.7
trillion; almost three times
larger than the US$660 billion
in revenues generated from all
major raw metals and minerals
Figures compiled by the Visual Capitalist
show that the sheer magnitude of international
oil consumption will increase as countries
leave coal behind and plan for the spread of
natural gas and green energy.
For the sake of comparison, gold, the largest
raw metal market by dollar value, stands at
one-tenth the size of big oil. Iron, the second
most popular mined and traded metal, gen-
erates $115 billion in revenues for companies
Oil producers extract 34 billion barrels of
oil from the planet every year to provide the
94 million bpd the planet consumes to travel,
build and illuminate.
The ascent of oil as the most-valuable com-
modity on Earth after food and drugs speaks
to the technological progress that humans
have made since the commercialization of the
internal combustion engine in the 1860s, as
pointed out by Zero Hedge.
The contraption allowed modern modes of
transportation---notably, cars---to spread all
over the world, one vehicle at a time.
Data from the International Energy Agency
shows that 45.4 per cent of global crude oil
consumption in 1973 fulfilled transportation
needs. By 2012, that figure rose to 63.7 per
cent, suggesting that one significant reason
for the rise in oil demand has been spurred
on by expanding human mobility.
The International Air Transport Association
estimates that the number of passengers will
double by 2035 to 7.3 billion. The fuel efficiency
of airplanes will surely improve over the next
20 years, but innovations are unlikely to keep
up with the skyrocketing travel wishes of a
rising global middle class, particularly in Asia.
Though climate change activists encourage
the abandonment of all three major fossil fuels:
coal, oil and natural gas---and with good rea-
son---it s important to understand the inter-
mediary position of oil as nations begin to
quit coal and work toward embracing natural
gas and renewable energy sources.
As a cheap and mobile source of energy,
coal---the most potent polluter of the fossil
fuel trio---has powered the industrial revolu-
tions of the United Kingdom, the United States,
China and now, India. Not a single one of the
world s raw metals can make that claim.
And for as much as environmentalists today
look scornfully upon oil, the US Energy Infor-
mation Administration estimates that using
oil produces roughly 20 per cent less carbon
dioxide than burning coal.
An estimated 20 per cent of India s pop-
ulation---a group roughly equal in size to three-
fourths of the US population---does not have
access to electricity. For now, Prime Minister
Narendra Modi plans to bring the essential
amenity to the poorest regions of his country
with inexpensive coal.
Just like the massive countries that preceded
India in hitting their development stride, the
Asian giant will eventually curb coal con-
sumption and adopt oil and natural gas---which
is not to say that every country has or needs
to follow the three-step process.
Over four million vehicles in Pakistan utilise
compressed natural gas, and the country has
already begun the process to make liquefied
natural gas (LNG) widely available in its urban
areas. But LNG adoption requires intensive
infrastructure developments that take time
and money to acquire and bring into operation.
A second challenge is the fact that natural gas
is, in fact, a gas---presenting yet another unique
transportation challenge for all countries.
These hurdles will slow the transition to
LNG and other energy types, allowing oil to
maintain its leader-of-the-pack status for the
Over the next few years---even while coal
brings the power of light and Internet con-
nectivity to some of the most impoverished
areas on the planet, and as developing countries
construct pipelines and related facilities to
effectively distribute natural gas; oil demand
will continue to rise.
BP Oman said Phase 1 of its massive
Khazzan natural gas project in the
desert 350 km south of Muscat is 80
per cent complete and on track to
start gas deliveries in late 2017. The
tight gas project began in 2014 and is
expected to eventually contribute
about 33 per cent of Oman s gas sup-
ply.Most of the infrastructure already
is in place, including roads, power
lines, and a 60-km water pipeline
from Hanya. Equipment installation
is under way for a two-train central
gas processing plant.
The water treatment plant, waste
management area, and electricity sub-
station also have been completed along
with accommodation units for the
construction workforce of as many as
The Khazzan drilling programme is
on track with 38 of the 50 wells needed
by first gas already drilled. More than
300 wells eventually will be drilled.
BP Oman operates Block 61 with
about 60 per cent interest. Oman Oil
Co Exploration and Production holds
the remaining interest. Khazzan s
Phase 1 is expected to produce one
bcfd. The combined plateau produc-
tion from Phases 1 and 2 is expected
to be 1.5 bcfd.
The US$1.7 trillion
oil industry isn't
BP Oman expects Khazzan gas
production to start in late 2017
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