Black gold: blame game not to benefit anyone: Dr. Mughal
Whole world is witnessing an economic downturn due to surging prices of commodities including crude and important nations seem more interested in blame game than resolving the issue. OPEC seems less concerned with the whole issue as the crisis is adding to their huge reserves of petro dollars.
On the other hand Pakistan Government is only relying on their relations which will not work for long, said Dr. Murtaza Mughal, President Pakistan Economy Watch in an exclusive interview with The Post.
He said that the cost of crude oil is surging to record highs and a battle of blame is in full swing. The suspects include oil industry, developed nations, US energy policy, commodity speculators, environmentalists and developing countries in Asia (China and India).
A commodity like oil is varying by 2 to 3 percent of its value in a day’s time due to speculation while the other contributor is the weakening value of the dollar compared with the Euro; oil is priced and sold in dollars.
“The problem is simple, nobody really knows how much oil is down there; the only thing certain is that a limited amount of oil was produced billions of years ago and it would not be enough to sustain the current rate of consumption,” said Dr. Murtaza Mughal.
We have already discovered about 7 trillion barrels of oil in the ground and other explorations like in the seabed etc must be favored by explorers and Governments.
86 million barrels of oil is produced in the globe daily, up from 74 million barrels 10 years ago. World demand for oil is expected to increase by 37 percent to a staggering 118 million barrels per day by 2030, estimates suggest.
It is predicted that oil production will peak sometime between this year and 2018. Some analysts say that we have barely explored our energy potential.
At home, Pakistan has failed to develop resources due to the inability of officials and politicians to permit drilling in high-probability petroleum and gas regions, our policy for oil and gas can be called simply as absurd, said Dr. Murtaza Mughal.
The United States of America and European Union have done nothing but promoted the development of ethanol and other alternatives pushing the planet earth into hunger. Ethanol and other food items have very low energy potential but high nutrition value.
There is no sense that food for humans ends up in petrol tanks due to the misdirected policies of United States of America, Brazil and European Union etc.
“I think our broad energy capability is still very substantial, but we really need to bridge the gap between our existing resources and alternative technologies,” opined Mughal.
Another looming issue is the sizable foreign exchange chunk that is being spent on oil each year. We are sending millions of dollars to Arab world because of our inability to develop our own resources.
This has pushed our top Government officials to visit Kingdom of Saudi Arabia recently and ask for oil on deferred payments, but for how long, asked Mughal.
We can raise hue and cry, we are fully capable for it, but one should remember there is no mercy factor out there in the market.
