RISING OIL AND GAS PRICES IS GOOD FOR US AND WORLD ECONOMY IN THE LONG RUN By: Harpreet Singh

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RISING OIL AND GAS PRICES IS GOOD FOR US AND
WORLD ECONOMY IN THE LONG RUNBy Harpreet
Singh
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TRENDS IN OIL DEMAND SUPPLY
-Global Demand for Oil is increasing -New
discoveries of new sources of oil is
decreasing -Oil supply will peak shortly but the
demand will keep on rising -Upward pressure on
Oil prices will persist
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TRENDS IN OIL CONSUMPTION
-Developing Asia will be a major driver for Oil
Consumption growth -Non - Industrialized nations
will also see higher growth in Oil
consumption -Middle East remains the biggest
supplier of Oil. -Dependency on Oil from Middle
East remains increasing Volatility.
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TRENDS IN OIL CONSUMPTION Contd..
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TRENDS IN OIL CONSUMPTION Contd..
-OPEC will be the biggest Oil Producer by 2025
supply more than 50 of the global Oil
demand. -Oil Demand will increase from 78 Million
Barells to 120 Million Barells 54 Increase in
Oil Consumption
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Effects of Higher Oil Gas Prices

• The long-term trend of energy prices is
  northwards. This will lead to alternative energy
  fuels and hydrogen fuel cells to compete against
  the carbon based fuels.
• The increased uncertainty in the Middle East
  coupled with concerns of national security will
  lead US to allocate higher government funds
  towards critical research areas in the field of
  alternate energy resources and hydrogen fuel
  cells.
• Global warming and pressure from environmental
  groups will lead to stricter environmental
  regulation that will put substantial pressure on
  utilities and car makers leading to faster
  adaptance of cleaner technologies - Result in
  alternate fuel sources to compete against
  Hydrocarbons.
• Fuel Cells and Alternate energy resources have
  reached a critical mass and will increase, as the
  technology becomes more affordable.

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Why Hydrogen is the most promising of fuels

• Biomass and Coal Gasification are based on carbon
  as the primary energy sources. Leads to Pollution
  and does not offer any long term advantage over
  Oil.
• Alternate Energy Sources include the Renewable
  energy sources such as Geothermal, Wind Energy
  and Biomass.
• These are low Intensity Energy Sources
• Spread over a large area and hence increase
  visibility
• Varies with natural Occurrence and hence is not
  suitable for base load operation unless
  sophisticated storage devices are invented.

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Why Hydrogen is the most promising of fuels..
Contd

• Found in abundance in nature in the form of
  water.
• Clean fuel as the resultant of combustion is
  water and energy.
• Can be used in the existing systems such as
  turbines and IC engines.
• Can be used to power potable devices.
• Prototypes already working.

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Economic Benefits of Hydrogen Economy

• Hydrogen Economy will involve the following.
• Production The main area of research should
  focus on production of Hydrogen, as it is not
  found in free state in the environment.
• Delivery As in the case of Carbon based energy
  fuels, Hydrogen economy will have to develop
  hydrogen delivery system and various components
  will include pumps, compressors, piping material
  technology, hydrogen sensors and fire fighting
  equipment
• Storage Storage will pose a major challenge as
  Hydrogen is highly inflammable and storing poses
  a great challenge.
• Conversion One of the most important areas of
  improvement is the conversion of Hydrogen energy
  into useful energy. The conversion of energy can
  be achieved with fuel cells, reciprocating
  engines, turbines etc
• Applications In the end fuel cells should be
  cost effective so that it can be used to power
  cars, homes, computers, mobile devices and meet
  global energy needs.
• Global projections for all fuel cell products ie
  portable, stationary and transportation power
  applications to reach 46 billion per year by
  2011 and to grow to more than 2.5 trillion per
  year by 2021.

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POLICIES FOR FASTER ADAPTATION OF NEW ENERGY
SOURCES AND INNOVATION

• Increasing the Emission Standards Increasing the
  emission standards will result in higher existing
  energy costs related to Carbon related sources
  because the energy users and equipment
  manufacturers will have to incorporate costly
  emission control equipment.
• Changing the market incentives to favor desired
  outcomes i.e. lower emissions. Introducing
  tradable emissions permit for automobiles thereby
  encouraging individual decision making for
  pollution control.
• Taxing the existing energy sources to include the
  total cost of usage i.e. environmental effects
  caused by emissions of harmful gases and carbon
  dioxide.
• Subsidizing the research towards alternate energy
  sources will provide government research funds
  that will lead to vital research needed for any
  new technology to be successful and adopted.