Michael Richardson, Straits Times 25 Jun 08;
WHAT will happen to the price of oil and its supply if Asia's emerging economic giants, China and India, continue their quest to raise living standards and catch up with rich nations by emulating the West's energy-intensive growth model? And what will the impact be on the global environment, which is already being battered by climate change?
When the price of crude oil surged to almost US$140 (S$190) a barrel recently, it marked a 40 per cent gain this year alone. Most analysts agree that the mainspring of the oil price rise is voracious demand from China and India.
Some say that if this demand continues unchecked, crude oil price could reach US$200 a barrel or go even higher within the next few years.
Last November, the International Energy Agency (IEA) warned in its annual survey that if governments around the world stick with existing policies, global energy needs would be well over 50 per cent higher in 2030 than today and China and India together would account for 45 per cent of this increase.
China surpassed Japan several years ago to become the world's second-largest oil user after the United States.
Accommodating the energy needs of China and India, even if they adopt more sustainable policies, will be difficult. There will also have to be some painful compromises and trade-offs made between developed and developing countries in negotiations to curb global warming.
Can China and India ever mirror Western lifestyles? IEA thinks not.
'Quite simply, the resource-intensive economic model currently being pursued throughout the world cannot be sustained indefinitely,' it said in its most recent energy survey.
'A level of per capita income in China and India comparable with that of the industrialised countries would, on today's model, require a level of energy use beyond the world's energy resource endowment and the absorptive capacity of the planet's ecosystem.'
The US, with no more than 5 per cent of the world's population, consumes 25 per cent of the world's oil. The US uses around 14 times as much oil as China on a per capita basis, and over 28 times as much as India. If per capita oil use in China and India were to increase to the current level in the US, their oil demand would rise by a combined 160 million barrels a day - almost twice the present level of world oil consumption of around 87 million barrels a day. Moreover, this does not allow for future increases in population which would intensify demand for energy.
IEA has calculated that this level of demand for oil from China, India and the rest of the world - close to 240 million barrels a day - would deplete remaining proven world reserves of conventional oil in less than 15 years. It would drain the ultimately recoverable oil and natural gas liquids (including proven reserves) that are estimated to lie under the ground and the seabed in under 26 years.
Of course, big new finds could be made. But that is getting tougher and much more expensive. Heavy oil and tar sands or shale could also be exploited to stretch oil consumption by quite a few more years. Producing, processing and then burning this kind of fuel would take a heavy toll on the environment.
According to a study just issued by the Netherlands Environmental Assessment Agency, China last year overtook the US to be the largest source of carbon dioxide (CO2), the main greenhouse gas warming the planet. China accounted for 24 per cent of the nearly 30 billion tonnes of CO2 spewed into the atmosphere last year; the US was responsible for 21 per cent; and India, 8 per cent.
Yet on a per capita basis, China emitted barely a quarter of the US' CO2 emissions while India emitted just 10 per cent. If per person emissions of CO2 in China and India reached current American levels, assuming no major departures from trends elsewhere, world emissions would be three times higher than today.
IEA says the implications for climate change of such an increase could be catastrophic. It adds that even sustained global fossil energy consumption at current levels risks causing a substantial rise in CO2 concentrations and temperatures around the world.
It is simply impossible to go on as now.
The writer is an energy and security specialist at the Institute of Southeast Asian Studies.
