Venezuela needs new and massive international investments in oil, gas and petrochemicals

Opening its market to international companies specializing in oil, gas and petrochemicals is essential for Venezuela in the current situation.

Venezuela needs not only financial resources but also the knowledge of international companies in those areas and for that purpose the corresponding reforms in the country's legislation must be carried out in a new political scenario.

Political economy and environment

The pattern of consumption followed until now by the world economy has been based in the intense use of the natural resources and technologies for displace the workers.
By force of the reality that situation will have to change; the reason is very simple: the natural resources are every day more scarcely and the contamination everyday also grows. A new pattern of production and employment will have to be created as a consequence of this situation.
The new technology
One of the big challenges of the modern science and technology is to develop a new model of production less contaminant and a model of employment for to balance the requirements of the technologic development and the social need of creating new jobs.
According with the World Bank 2009 World Development Indicators, page 127, “Energy-related carbon dioxide now accounts for 61-65 per cent of global green house gas emissions…”
These emissions are a serious threat for nature and the human live. The scientists consider that those gases are the cause of the global warming and their consequences, among them, the oceans level increase, changes in the patterns of rain that affects the agriculture and an augment of the natural disasters like intense floods, droughts, storms, hurricanes, among other events.
In the following table you can appreciate the principal generators of carbon dioxide. Table 1

The figures confirm that are the United States and China the top generators of carbon dioxide. The comparison between 1990 and 2005 put in evidence the great growth of China in only fifteen years, country which gases emissions are now very near of the United States level.
The emissions of United States and China are something extraordinary that can not be compared with the rest of the countries. The Russian Federation that in the past was the third generator of carbon dioxide emissions now, in the year 2005, is very far with 1,544 millions of metric tons.
These figures reveal that the future of humanity is in the hands of the leaders of the two powers of the world, United States and China; if they do not adopt effective measures for diminishing these emissions the damage to the entire planet everyday will be worse.
The great problem is how conciliate the economic growth with the environment. If the politicians adopt a clear decision in this matter, the scientists will find ways for make friendlier the production. But the most important is the political decision. Until now the advances has been precarious because it has not had a determinant political decision of the principal leaders of the United States and China.
Fossil fuels impact
The substitution of the petroleum is not possible, among other reasons, because of their energetic intensity that can not be reached by other similar sources. Nevertheless, the technology might create new machines able of reducing the consumption and the level of pollution.
In the transport sector the tests with hydrogen and other sources has been a success but they can not eliminate the oil. The true then is that the world have not other option but to exist side by side with the petroleum for many years more. It is important to say that the situation is difficult because the petroleum is running out in many regions of the world and too few countries will concentrate the most reserves.
In parallel, the international agencies and the governments can adopt effective environmental policies, like a Global Program of Reforestation that moreover of creating millions of new jobs would reduce the global warming.
The effects of the deforestation in global scale are something of great magnitude. In the next table you can see it.

Table 2

Brazil is in the top of the list. This means that the Amazonia is in the first place. The Amazonia is the last forest reserve that still survives in the world. Every year their lands are razed by farmers, lumberjacks and miners. If the destruction of the Amazonian territories is not stopped in too little time the entire world will suffer the consequences. The Amazonian forests are the biggest home of natural species, animals and plants, and reserve of big reserves of sweet water. The behavior of the global climate is linked to the climatic conditions of the Amazonian region, for that reason any change in this affects the entire world.
On March 25, 2010 the Food and Agricultural Organization, FAO, spread the Global Forest Resources Assessment 2010, and assured that “…The world deforestation, mainly the conversion of tropical forests to agriculture land, has decreased over the past ten years but continues at an alarming high rate in many countries…” The report says that “…Globally, around 13 million hectares of forests were converted to other uses or lost through natural causes each year between 2000 and 2010 as compared to around 16 million hectares per year during the 1990s…”
The report highlights the effort and success of China and India in matter of reforestation.

Less oil more coal
In the previous tables it was proven that the contamination by carbon dioxide has increased in the last years. This phenomenon has happened in spite of the oil consumption decrease experimented by the United States that is the first consumer of the world.
The oil consumption of the United States it reduced in 5.61 per cent between the years 2004 and 2008 but was substituted by China that it has become in the second consumer of oil; in the mentioned period, China increased their consumption of refined products of oil in 22.24 per cent, as you can appreciate in the table.
Table 3


But this augment of the China’s consumption of refined products of oil do not justify the important growth experimented by the carbon dioxide emissions of that country in the last years. Then the question is why this happen?
The answer may be in the consumption of coal that is the most contaminant of the fossil fuels. Indeed, China enhanced their coal consumption in 43.06 per cent between the years 2004 and 2008, followed by the United States, India and the Russian Federation.
Table 4


The consumption of coal is growing as may be appreciated in the table. The amounts are amazing; China consumes more of the double of the United States and seven times more than India. This trend should be modified because of their negative effects. These countries and the world in general should diminish their consumption of coal and substitute it by other less contaminant sources; the technology might offer some options in this sense, perhaps through the use of the geo thermal energy and green sources like the energy of the sun, the wind and the seas.
Conclusion
The consumption of energy will increase in the coming years because of a simple reason: the world population growth. This means an increase of the level of contamination worldwide. The most augment will be in the underdeveloped nations.
The great challenge for the politicians and the scientists is to develop new technologies for guarantee: a) the production efficiency b) the creation of new jobs and c) to preserve the environment.
It will be necessary to make a great economic effort in science and technology. To open the door at new ideas, new people; to listen what the unknown innovators have to say. The human being creation capacity is infinite and in any mind in any place of the world might be the solution of problems that that affects humanity.
The international agencies and the governments might create rewards, prizes, to the creation in the main fields of the knowledge; for example, to promote a global program for improve the production, create jobs and preserve the environment.
There are two options: a) to continue the routine followed until now or b) to explore new roads, to add new ideas, new people of the entire world at the task of creating a better world. What do you think?

The natural resources future

In the developed world, North America, Western Europe and Japan, for the majority of the people are not yet perceivable, at first, the signs of a natural resources crisis, but it is a latent process, a developing process that very soon will be felt globally.

An inhabitant of New York, Washington, London or Paris, possibly does not know what not having water for one or two days per week or for a long period of time is. Probably he doesn’t know what electricity restrictions are like; but in other regions of the world these types of limitations are something common or frequent.
Nevertheless, the situation in the developed countries has begun to change and already it exist regions and states in the United States where has been declared the water emergency supply and where also there are problems with the electricity supply.

You, the reader of this essay, perhaps have a doubt and ask yourself if really there is a worldwide crisis of natural resources.

The answer is yes.

Which resources?

There is a crisis of oil, water, food and electricity.

How may be it demonstrated?

The best prove of the natural resources crisis is the price increase of these commodities.

The price of a good reflects its abundance or its scarcity.
In the years 2007 and 2008, the evidence of the natural resources crisis was clearer than in other years:

- The oil price surpassed US$ 90 in October 2007 and two month later, on February Tuesday 19 2008, the West Intermediate Texas reached US $ 100.10 in the New York market; on March Monday 3 the price touched US$ 103.95, passing the barrier of April 1980, that adjusted by inflation was for March 2008 US$ 103.76. The race of prices continued on March 2008 and on Monday 13 the West Texas Intermediate went to US$ 107.
On Friday May 16 2008, the Light Sweet Crude for June delivery reached US $ 126.20 in the New York Market Exchange. In July 2008 reached their maximum level, over $140. As a consequence of the financial crisis and the recession the oil price dropped during the first months of the year 2009 but already has begun to increase over $70 in the last months of the year 2009.

- The wheat price and the price of other cereals reached a record;
- The food price in general grew in an important percentage;
- “Over the past five years, municipal water rates have increased an average of 27% in the United States, 32% in the United Kingdom, 45% in Australia, 50% in South Africa and 58% in Canada.” - (1)
The electricity price registered the same trend; between the year 1990 and the year 2000 the electricity rates in the United States increased in an average of 5.23%but between the year 2000 and 2005 the enhance average was 26.25%, five hundred per cent more. (2)

Until now, first decade of the 21st century, the crisis due to water shortage has been limited to specific regions of Latin America, Africa and Asia and has not had a sufficiently important impact to have the attention of the big world-wide mass media nor of the governments of the developed countries. The same has happened with the oil crises, which only have generated increases in the prices of crude and its derivates but without affecting the availability or the supply of these products, except in the 1973 crisis, when the Arab countries decided to suspend their exports towards the United States and other nations of the West.

We can say then, that in spite of the oil crises which have lifted the prices, the inhabitants of the developed nations have always had abundance of derivatives of petroleum, gasoline, diesel, oil, lubricants and other products and this fact has contributed to create the illusion of the existence of infinite reserves, but this is not true.

But the situation of apparent abundance will change very soon as a result of two facts: the over-exploitation of the natural resources and the contamination. Water will be the most appreciated good and in second place will be petroleum, since these two resources are every day scarcer, as it can be verified when considering the evolution of the contamination processes, deforestation and blighting at world-wide level and analyzing the behavior of the oil reserves. The pollution increased by the emissions of carbon dioxide and other elements that contribute to the global warming, the extinction of numerous species, the contamination of waters of the seas, rivers and lagoons and the nuclear tests, among other elements, constitute a serious threat to life.

The aggression to the environment will have an immediate effect and it will be reflected in the reduction of natural resources availability and also in the diminishment of the food supply. At the same time it will also cause an increase of the conflicts among the countries and within the nations.

The intense fight for the natural resources hence will be the main characteristic of the international policy in the next years to come and this will not only generate important geo strategic and geopolitical changes, but also it will be a determinant factor for the War or the Peace in the 21st Century.

Other important nations, like China and India, the most populated countries in the world, have in front of them the perspective of a great burden due to the water crisis, while the United States, Mexico, the United Kingdom and Norway, among others countries, will see their petroleum reserves reduced drastically.

That, in general, is the international situation in the first decade of the 21st century. The territorial problems related to the problems of shortage of natural resources, constitute the main cause of the conflicts.

(1)Earth Policy Institute, March 7, 2007. “Water Prices Rising Worldwide,” by Edwin H. Clark II http://www.earth-policy.org/updates/2007/updated 64.htm
(2)Energy Information Administration Annual Energy Review 2006 table 8.10 page 257.

Oil price might surpass $ 500 for the year 2012

The oil price might surpass the barrier of $ 500 for the year 2012. For that year the United Kingdom reserves of the North Sea will be in it final stage.
This fact will cause a revolution in the world energy and will show the weakness of our natural resources.
The appreciation on the oil price has a base: the historical behavior of the prices. For example, for the year 1970 the oil price was of hardly more of $ 1 per barrel, but ten years after, in the year 1980, the oil price reached the figure of $ 40. This represented an augment of more of 3,000 per cent in a period of ten years. The prices experimented a sustained trend to the increase in those ten years, but an event, the Sha of Iran fall in the year 1979, accelerated the crisis and the oil price reached in 1980 it major level in the history until then.
If we consider the year 2002 ---after September 11 2002--- as the year of minor prices of the oil ---$ 16 per barrel in December of that year--- and we consider a growth of 3,000 percent for the year 2012, the estimation of a price of $500 has a real sense. Remember that a similar phenomenon already happened between the years 1970 and 1980 as was explained in the previous paragraph.
Nobody can predict the future with precision but the lessons of the history are a true source of knowledgment. The history teaches us that a great jump might occur in the oil price if a fact sufficiently important happens in the market. The figures of the world oil reserves demonstrate that is in the North Sea the place where the oil will finish first. The most important oil companies of the world are aware of this fact, some governments too but they do not recognize it in public form.
A jump in the oil prices of the magnitude considered would cause a real economic crisis with severe implications in the goods and services production worldwide.
The book A Statistical Yearbook 2008, Running Out: How Global Shortages Change the Economic Paradigm, (Algora Publishing, New York, 2008) presents a complete vision of the natural resources situation and especially of the petroleum.
pablorafael_gonzalez@yahoo.com

The UK Oil Will Last 4 Years More

The oil price reduction is temporary
and very soon will reach unbelievable levels

The UK oil will last only 4 years more
The USA and Mexico oil only 8 years more

The abundance of oil is something temporary and the sign of the oil crisis will be visible soon. Now, on October 2008, when the oil price descended to less of US$ 100, I am sure that this reduction is something temporary and that the oil price will reach unthinkable levels at medium term.
The United Kingdom will be the first Western country where the oil will finish. If that country maintains the production and the level of reserves that had for the year 2005, the collapse of the United Kingdom oil will occur in four years, it means, for the year 2012.

A similar phenomenon already has happened. Indeed, on May 28 2008, an important member of the OPEC, Indonesia, announced their withdrawal of the Organization, because of already do not have enough oil and can not to continue being an exporter.

The Norway oil will last seven years more, until the year 2015; the United States and Mexico oil only eight years more, until the year 2016, and the China oil nine years more, it means, until the year 2017, says the author.
Between the year 2000 and the year 2005, the oil reserves of the United Kingdom diminished 19.4%, from 5,0002 millons of barrels to 4,029 millions of barrels.
The reserves of Norway presents a similar sitation, because passed from 13,158 millions of barrels to 9,691 millions of barrels, it means, -26.3%.
The reserves of the United States passed from 21,765 millons of barrels to 21,371 millons of barrels, 1.8% less.
The Mexico situation is more dramatic because ther reserves diminished 48.5% from 28,260 millions of barrels to 13,700 millons of barrels.
China presents a similar situation, because ther reserves diminished 33% passing from 24,000 millions of barrels to 16,038 millions of barrels.
The figures demonstrate the reality. If this trend continue, in too few years the energetic crisis will appear.


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