* This is my article in BusinessWorld on June 07, 2019.
Some good news in the world energy sector here. One,
world oil prices keep falling, WTI is now only $51+ per barrel vs $62 a month
ago and $75 in early October 2018. Two, the US cemented its role as the world’s
largest oil producer, its output now 12.4 million barrels per day (mbpd) vs.
8.8 mbpd at the end of the Obama administration. Three, the oil-price decline
is despite joint OPEC + Russia oil production cut to force higher prices. China
is perhaps the world’s biggest oil consumer but it remains a mid-tier oil
producer (see table 1).
President Trump and the US are winning the battle to keep
world oil prices low. Saudi, the rest of OPEC and Russia are losers to force
high oil prices. Russia and President Putin hate low oil-gas prices, these
being their main bread and butter.
At the Jeju Forum for Peace and Prosperity 2019
conference in South Korea last May 29-31, I attended a panel discussion on
“US-Korea energy cooperation.” The speakers were Melissa Simpson of the US
State Department, Geoff Moody of the American Fuel and Petrochemical
Manufacturers (AFPM), Prof. Shim Shangmin of the Korea National Diplomatic
Academy, and Prof. Jung Yonghun of Ajou University.
Ms. Simpson explained the US government’s policy of more
oil-gas production and more exports to allies like South Korea and Japan. Mr.
Moody showed charts that: (a) US crude exports keep rising, (b) in 2018 the US’
top 3 export destinations for hydro-carbon gas-liquids are Japan, Mexico and
South Korea, and (c) for crude oil export destinations, the top 3 are Canada,
South Korea and China.
Prof. Shim explained that the South Korea government
energy policy now is to shift away from nuclear and coal power and move towards
renewables wind-solar. He is not very optimistic about power reliability and
lower prices though. Prof. Jung emphasized the need for more US-Korea
cooperation given the rising energy needs of his country.
The Friedrich Naumann Foundation for Freedom (FNF)
sponsored a panel on “Smart cities” and one of its three speakers, Prof. Hwang
Jie-Eun of the University of Seoul, partly mentioned the role of cheaper energy
in SME tech start-ups in the Sewoon Campus project.
Here in the Philippines, three recent reports in
BusinessWorld are worth noting:
1. “Luzon grid goes on six-hour yellow alert Tuesday”
(June 5).
2. “Congress ratifies Solar Para sa Bayan bill” (June 5).
3. “Legislators urged to reduce Philippines’ dependence
on coal-fired power plants” (June 6).
Report #1 shows that until today, we still lack
sufficient power, stable and reliable power that can run 24/7 and not dependent
on weather. Report #2 shows further energy cronyism via legislation while trying
to expand intermittent and unstable solar power. Report #3 shows how some
lobbyists spread fake news, that the Philippines has big coal power already and
we need to cut or discontinue more coal power plants. Far out, see table 2.
The “smart energy” policy for the Philippines and other
developing countries is to keep using conventionals — oil, gas and coal, even
nuclear. With continuing rise in US oil-gas-coal production and exports, the
prices of these three conventionals will further stabilize at low, competitive
levels.
----------------
See also:
BWorld 334, US-China relations at Jeju Forum, June 04, 2019
BWorld 336, Inflation target below 2% is possible, June 10, 2019
No comments:
Post a Comment