Losing Credibility

Viewpoint : 'Black oxygen'

Juan Mercado
Inquirer News Service

OIL prices closed at $67.40 a barrel last week. That's a long way from $1.80 a barrel in the 1950s. And when Arab members of the Organization of Petroleum Exporting Countries clamped an embargo in 1973, prices bolted overnight from over $2 a barrel to $11 plus. Quarrels at fuel pump queues erupted and economies went into tailspin.

Refinery fires, rising US and China demand, the Ecuador oil industry upheaval plus "just-in-case buying" spooked markets, the BBC reports. "We could easily test $70 a barrel."

Malacañang mumbles, meanwhile, about "coercive powers" for the President to enforce energy savings. The opposition is hypnotized over scraping up 79 votes to impeach the President.

Others are distracted by personal concerns. California Superior Court Judge Barbara Miller issued on Aug. 17 a bench warrant for Sen. Panfilo Lacson's arrest in the handcuffs controversy. The court ordered Lacson to appear on Sept. 7, reports the Philippine News of San Francisco.

"In a worst-case scenario, we need to have coercive powers for the executive," Press Secretary Ignacio Bunye said. But "regular laws will work." Will they?

What do you remember about earlier oil crunches? Newsroom colleagues ask those who're older (the Associated Press prefers the 1978 phrase "near-elderly" for us.)

Which one? The World War II fuel crunch? Or the 1973 artificial shortage, stemming from the Opec embargo?

Fuel dumps were bombed in that now dimly remembered war. Japanese forces controlled gasoline stocks. We read by coconut oil lamps. The horse-drawn carriage reappeared. Our 350-cavan "batel" sailed from Batangas to Cebu in seven days. And we hoofed it. One walked four hours on 20 kilometers of eerily deserted roads to reach the city from our evacuation home.

In 1973, you could only buy five liters at a time. So, people coasted from one gas pump queue to another. You hauled five-gallon containers "just in case" a station allowed an extra sale.

Abroad, 55 miles per hour speed limits were clamped on. President Jimmy Carter called for the "moral equivalent of war" to reduce dependence on foreign oil. That included filling the US strategic petroleum reserve and research for alternative energy. He was not reelected.

Habits die hard. Wasteful use of fuel continued. Few politicians think beyond the next election -- or impeachment -- even in countries that have no oil wells.

"I have this thing about Moses," Israeli Prime Minister Golda Meir once griped. "He marched us for 40 years through the desert and led us to the only place in the Middle East that had no oil."

Failure to prepare is foolhardy because, unlike the 1973 artificial crisis, today's shortages are real, writes Peter Maas in his just published book, "The Breaking Point."

Supply's lead over demand was once considerable, but refinery shortages and surging demand have whittled that down. If use pulls ahead of production by even a fraction, oil prices could soar to triple-digit levels, Maas warns in The New York Times magazine. That'd trigger a global recession and affect almost every product, from cell phones to medicine.

Disruptions can come from terrorist attacks, producer shutdowns or geological factors. That'd "cut off the black oxygen that the modern world depends on."

The impact on ways of life would be profound. Pharmaceutical supplies and fertilizers for food production would dwindle. Ships and planes would be mothballed.

"Saudi Arabia is the sole oil superpower." Its 263 billion barrels reserve is almost double runner-up Iran's 133 billion barrels. Unexploited reserves in the Alaska National Wildlife Refuge are only 10 billion barrels. New oil strikes in other countries offer small increments.

But today's record prices are straining producers. Indonesia, for example, is laying the basis to whittle back fuel subsidies. Even Saudi Arabia is feeling the strain as the world burns 84 million barrels daily.

Decades-old oil fields are not as "geologically spry as they used to be. Some may be incapable of producing, on a daily basis, the increasing volumes of oil that the world requires." "One thing is clear," warns Chevron, the second-largest American oil company's new ads. "The era of easy oil is over."

Will today's producers be able to meet rising world demand in the months ahead? The answer, Maas thinks, will depend on Saudi Arabia. Can it increase output beyond the target of 12.5 million barrels it set for 2009? Can it ramp up production, say up to 20 million barrels from wells that are past their prime? And more important, is it willing to do so?

"We have the petroleum equivalent of running an engine at ever-increasing speeds without stopping to cool it down or change the oil," says a Saudi expert. And geology may not be forgiving. Wanton overproduction can wreck fragile and irreplaceable reservoirs, says Nawaf Obaid, a Saudi oil and security analyst.

Conservation, however, is a job consumers haven't buckled down to. "It's not our problem to tell a democratically elected government that you have to do something about your runaway consumers," a Saudi expert says. "If your government can't do the job, don't expect other governments to do it for you."

When elephants collide, the ants get squashed. That's the danger we in impoverished oil-short countries face.

The government is held hostage by the impeachment controversy, Sen. Joker Arroyo rightly notes. Can a half-paralyzed regime lead us in the inevitable belt-tightening?