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Monday, 9 June 2008

Oil Reserves And Fuel-Efficient Cars

There are heaps of opinions out there about the petrol prices.

It's rather telling about Malaysians. Once our pockets are hit, then we hop up and make some noise.

But at least these events are raising political awareness.

I promised to respond to a comment from Grace Chang who brought up some valid points and from whom, I would also like to seek further clarification.

Firstly, Malaysia is not part of OPEC- because of one simple thing- we don't actually produce enough to be one of those countries you listed out.

Secondly, we produce sweet crude, which is infinitely more valuable than the sour crude these countries crank out.

No dissent there. In fact, in a previous post, I mentioned that:

"We export this very high grade petroleum in exchange for lower grade petroleum from the Middle East. They have bigger oil reserves, but ours are of better quality. So we actually make a profit when it comes to our oil ventures."

Because we are also a smaller country in terms of size and population compared to some of the other OPEC countries, we don't require so much fuel for our citizens.

If we didn't have to cover up for all those shenanigans the government indulges in, we could be more highly subsidised, believe you me.

But what was your point in making those statements, Grace?

Its better to export it out and make a killing and thusly subsidising all the govt's nonsense (Petronas contributes to 70% of the country's revenue). Also- most importantly, RESERVES... if we don't stash up, you can say goodbye to drivnig around or having electricity in 15 years.

The best thing Petronas has ever done for us is to slow down drilling and exploration so that we can maintain our reserves.

I don't understand why you would advocate "subsidising all the govt's nonsense" as you put it. To be honest, enough is enough.

As for reserves, at the moment, the powers-that-be don't really give a hoot. They won't be around by the time we run out of it, anyway.

If the government was really concerned about our fast-depleting reserves, they'd have engaged in other methods of reducing fuel consumption nationally.

For instance, they should have allowed the usage of hybrid vehicles in this country. These vehicles seriously reduce the consumption of fuel and are extremely efficient, both environmentally and economically.

In the US of A, Toyota Prius and Honda Insight have been around for over 5 years. Even Singapore has hybrid cars now.

Hybrid technology is amazing. Regenerative braking can be used to recapture energy and stored to power electrical accessories, such as air conditioning. Shutting down the engine at idle can also be used to reduce fuel consumption and reduce emissions.

I own a Toyota currently. I don't know about other car companies, but Toyota believes in updating its customers with its latest offerings. Some time last year, it sent me a notice to expect the Toyota Prius very soon.

It's been over a year and zilch. Nada. Zero. Ling. Pujiam.

If the citizens require less petrol, then Petronas makes less profits. So at our expense, we're forced to pay for higher prices without having cars with good fuel consumption.

I'm not sure if Petronas has actually slowed down drilling and exploration. Petronas Carigali is a subsidiary solely dedicated to exploration, development and production of crude oil and natural gas both at home and abroad.

In fact, there is speculation that Kelantan is sitting on substantial oil reserves. Hence, the government's obstinately determined moves to take over the Kelantan administration.

Speculation and rumours have a nasty habit of emerging as the truth in Malaysia.

Also, before we're too quick to look at all this negative talk- imagine this: some foreign O&G company like Shell and Exxon-Mobil comes to peddle their fuel at us- who used to subsidise that? Petronas, that's who.

I have nothing against Petronas. In fact, I might even be proud of it, be it more properly managed and put to better use.

I know for a fact that they have brought in a lot of foreign consultants which they pay USD20,000 a month.

I'm not happy about the hike as well, but things could be a lot worse. I just like to look at both sides of the coin and think about the bigger picture.

How much worse could it get?

7 comments:

sohas said...

I totally agree with you. We should have more hybrid cars. But in order to do that, infrastructure needs to be in place first. This has to be done by regulations. Government advisors should conduct thorough cost-benefit analyses and advice the government accordingly. As you said, our oil reserves would not last - which is why we should gradually introduce these hybrid cars so that the transition between petrol to other source of fuel is done smoothly. We should look at Europe for instance, on how they play with regulation to ensure renewable energy and biodiesel fuel creep into the market by supporting the producers and setting targets to be achieved by certain a year. Well, by the looks of it, our government might not be in favour of this now as they do not see the benefits and when they do realise, they will make drastic changes!

Nobody said...

Personally I feel the subsidies should have been reduced much much earlier. Not now. Not when they are forced to. They should be reduced when the country has been managed well. If we take Singapore as reference (since we gained independence at the same time) we should not depend on subsidies probably 10 years ago. Fortunately for Singapore they have far-sighted politicians/leaders who look for talents and intellects to run their country. They have the good fortune to foresee corruption as detrimental to growth (actually it is quite common knowledge). They know how to improve their education system till even the US is trying to learn from them. They know how to reward the best students with scholarship, regardless of race or even nationality!!
Our government is running (sorry, crawling) on lost time. With our mentality we can only live in the 60s.

Crankshaft said...

What additional infrastructure are you referring to?

Most hybrid cars run on gasoline (petrol). It's just that their engines are more efficient.

The car manufacturer should be the one which provides the after-sales service. Not the government.

Crankshaft said...

Sorry, the previous comment was directed at sohas.

Nobody, our entire economy is artificially boosted by the oil we produce. Starting out independently would be a herculean feat.

walski69 said...

The price of crude that's publicized, incidentally, is for Light Sweet Crude - similar to the type Malaysia produces - and not the heavier waxy variety (see this chart on NYMEX). The per barrel price (as of right now) is about USD 135.29 per barrel (the intermediate and heavier crudes trade at slightly lower - but not much - prices)

Personally, I'm angered not so much by the fuel price increase, per se, but to the mismanagement of the Malaysian economy overall. How the subsidy cut was implemented is one good indication, followed by the firefighting afterwards.

Oh, and also by the continued condescension by our politicians (as if we're so stupid), who keep using the "... but our fuel's still cheaper" tired 'ol argument. It's never an apple-to-apple comparison, is it?

Plus, the savings from the subsidy reduction should really go towards something more sustainable (like what Canada and Norway do), into a long-term development fund, for example, and not given out as a different kind of subsidy. Another example of ad hoc, panic-station action plan, if you ask me.

Which goes back to the area of economic mismanagement.

Crankshaft said...

Alright, but it's about there, doesn't vary all that much.

I agree with you completely over the rest. Same reason why I'm pissed.

Anonymous said...

Come home earlier. Save petrol doing jockeying service in the morning. Sigh. And lock up after u come in