Thursday, 5 July 2012

Fueling a fossil fuels glut?

NEWS ABOUT NEW FINDS OF natural gas and crude oil fields has become regular in this region this year.  Every week, we are bombarded with the good news of a new oil find inn Kenya of LNG find in Tanzania. 


Our neighbours such as Uganda and South Sudan have been there before. Uganda is expected to start producing  20,000 barrels per day(bpd) soon; South Sudan has just shut down its 355,000 barrels per day wells.


News in Kenya is that the crude oil potential  exceeds expectations. In Tanzania reports of new finds of natural gas  wells are almost a weekly thing. 


We should cheer the new finds. After oil are causes for abundance elsewhere. But these news began to worry me. No I am not worried about  civil strive. I am worried about Economics of fuels: Could we be fueling a fuel glut in future? But I thought I was just letting my mind run wild until I stumbled  on a review of a paper  by a senior fellow at Harvard University, who thinks in the same lines.


He argues that new oil finds coupled with advances in extraction technologies could pump 110 million barrels per day by 2020 just when the oilfields in East Africa are expected to come on stream. At that time production could exceed demand leading low crude prices.  


Could our investment go to waste?  or are our imaginations running wild?
 Read  the review at http://www.thenewamerican.com/economy/markets/item/11942-harvard-senior-fellow-peak-oil-is-history

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