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Location: Makati City, Metro Manila, Philippines

Monday, March 17, 2008

Mad max for oil

I am not in favor of the mad rush to bio-fuels. Those rushing the bio-fuels legislation in Philippine Congress, I heard, have business interests waiting, like they've put up ethanol plants, jatropha processing plants, etc. in some provinces.

The rush to biofuels is part I think, of climate change alarmism. Petroleum is evil, it's responsible for high pollution and climate change; so is humanity's huge demand for petroleum. To slowly kill the evil, people should slowly cut consumption of petrol, until we're using bio-fuels-solar- wind-hydro- etc.

And some countries are now experiencing more deforestation (ie, from forest to non-forest land use), planting more crops as raw materials for biofuels by converting rice land or corn land or forest land.

Let's continue using petroleum, but this time, let the vehicle manufacturers produce more fuel-efficient cars and trucks. Let petrol prices rise if that's where many investors park their money now, but let's cut if not abolish certain taxes on oil, especially excise tax and import tax.

A friend who supports the "oil peaks" theory, like world oil prices reaching $200 a barrel, wrote:
"After the oil peaks, a Mad Max 2 scenario is being envisioned.
A former police officer is now a lone wanderer, travelling through a devasted Australia after a nuclear war looking for the now-priceless fuel of petrol. He lives to survive and is none too pleased when he finds himself the only hope of a small group of honest people running a remote oil refinery. He must protect them from the bike gang that is terrorising them whilst transporting their entire fuel supply to safety."

Oil prices will later reach $200 a barrel, maybe 2 or 5 years from now; no, make it $300 to make it more dramatic. But it's not only oil prices rising these days, also the prices of ethanol, biofuels, rice, wheat, gold, silver, palladium, coffee, cocoa, etc. So, if there's a mad max for oil, will there be also mad max for rice, mad max for gold, mad max for coffee? Mad max is a fiction. If the fiction is to be expanded -- and the fiction writer/s or conspirator/s should do so because oil is not the only important commodity in this planet -- to cover all other important goods reaching "commodity peaks", it will lose its dramatic effect.

Assuming that oil will hit $200 next year or the next, and diesel pump price will reach P80 or P100 a liter, people will still use their cars, especially for family mobility. Why? because governments, Philippine govt especially, have ensured that alternative comfortable transpo will not be made available. Look at those air-con fx and vans. Govt. has ruled that they are "colorum" and illegal and hence, subject to harrassment and extortion, which prevents operators from putting up a more reliable and safe transpo. But it's those air-con vans that exactly approximate driving one's car from house to school or office. Just one ride, you reach your office. Compare that with the present "chop-chop" public transpo: From your village or subdivision, take tricycle; then transfer to jeep or fx; then transfer to MRT/LRT/bus, then jeep or tricycle again to your office or school.

At the end of the day, it's govt. bureaucracy and govt. oil taxation that's a bigger evil than high oil prices.

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