Perspective - Perspettiva: The price of oil - shall we celebrate? -- Il-prezz taż-żejt

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I had come to Australia on holiday fourteen years ago, and remember buying petrol at less than an Australian dollar a litre. I had resigned myself that with the passage of time, the oil supply, which is a fossilised resource and so limited, would be more and more difficult, meaning that its price should always increase more or less.

For many years, this was in fact my experience and that of those driving conventional vehicles, however these last few weeks have seen me again buying petrol at less than a dollar a litre. What is happening?

If one considers the oild pirce, from which petrol, diesel etc are made, in 2016 was worth around $40-50 a barrel (this measure is equivalent to 42 American gallons, or 159 litres), which is around double what it was in 2002 ($20-40 a barrel), but much less than it was in the intermediate years, where the price even reached $140 a barrel in 2009.1

These high prices some years back has led to the production of oil from unconventional sources, such as shale, which can contain organic material which can be processed to extract oil.2 This process, which can include the controversial technique of fracking,3 is much more difficult than digging a well to a layer of oil which can simply be pumped upwards, and so is viable only when the oil price is high.

The potential of unconventional oil sources has led the United States of America a few years ago to once again become the number one producer in the world. This situation continued until Saudi Arabia decided, together with the other countries in OPEC (Organisation of Petroleum Exporting Countries) to increase its production coming from conventional sources, above the real demand for oil, in order to regain the number one position in oil production, at the cost of dropping the oil price, which has in fact happened.4

Several commentators and analysts have concentrated on this commercial battle, that is the fight to dominate the market for oil, to explain this behaviour by Saudi Arabia, which is dragging the rest of the OPEC countries with it. Nevertheless, I think there is another more strategic reason for this behaviour.

In April of this year, Saudi Arabia announced that in 2017 or 2018 it will sell a little less than 5% of the Aramco company, the state company owning the largest oil reserves in the world. This company is estimated to be worth more than a trillion US dollars, more than the rest of all the other oil companies put together!5

On reading this news, I asked myself, why is this, and why now? And what is the link with the fight over production with the United States?

I think that Saudi Arabia has recognised that the oil era is coming to an end before all the discovered reserves are exploited, due to the fight against climate change, and so wants to hit a number of birds with one stone:

•make some money with its reserves before it's too late;
•stop other countries from doing the same, by dropping prices to make their production uneconomic;
•the low price weakens as much as possible investment in sustainable sources of energy (these are alternatives to oil which, like coal, are fossilised energy), to maintain the status quo. The exploitation of sustainable sources of energy, such as wind and sun, are necessary for the world to combat climate change.

It seems that Saudi Arabia wants that if oil reserves really remain in the ground due to action on climate change, it would be those of other countries that remain in the ground, not its own!

Although the oil price is very low today, it seems that global demand for oil is still not increasing considerably. It also seems there is a limit to how much the Saudis and its allies can stimulate demand.

There are signs that the world has begun to look more at the future than at the past in the energy sector, which oil forms a substantial part of. For example, in 2015, for the first time, more than half the increase in electricity generation in that year was carried out from sustainable sources.6 It appears that investment in this area has started to happen even before substantial incentives from governments around the world.

There is also the initiative of divestment (the opposite of investment), in which religious and academic organisations, together with investment funds and others commit to get rid of investments which are related to fossilised energy sources. It is being claimed that to date this initiative has led to the divestment of assets worth more than $3 trillion.7 This initiative is just starting!

No wonder this frantic production of oil, don't you think?

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Jien kont ġejt l-Awstralja fuq btala erbatax-il sena ilu, u niftakarni nixtri l-petrol b'inqas minn dollaru Awstraljan il-litru. Kont irrasenrajt ruħi li iktar ma jgħaddi ż-żmien, il-provvista taż-żejt, li huwa riżors ffossilizzat u allura għandu limitu, tkun aktar u aktar diffiċli, jiġifieri l-prezz bejn wieħed u ieħor għandu dejjem jiżdied.

Għal ħafna snin, fil-fatt din kienet l-esperjenza tiegħi u tal-bqija ta' dawk li jsuqu karrozzi konvenzjonali, imma f'dan l-aħħar ġimgħat sibt ruħi nixtri l-petrol mill-ġdid b'inqas minn dollaru l-litru. X'qed jiġri?

Jekk wieħed iħares lejn il-prezz taż-żejt, li minnu jiġi magħmul il-petrol, id-diżil eċċ, fl-2016 kien jiswa madwar $40-50 kull barmil (kejl equivalenti għal 42 galluni Amerikani, jew 159 litru), li huwa madwar id-doppju ta' dak li kien fl-2002 ($20-30 kull barmil), imma ħafna inqas milli kien fis-snin ta' bejniethom, fejn il-prezz laħaq anke $140 kull barmil fl-2009.1

B'dawk il-prezzijiet għolja ta' xi snin ilu wassal lill-produzzjoni taż-żejt minn sorsi mhux konvenzjonali, bħat-tafal u l-ħama (shale), li jista' jkollu materjal organiku li minnu jkun ipproċessat biex joħroġ iż-żejt.2 Dan il-proċess, li jista jinkludi t-teknoloġija kontroversjali tal-fracking,3 huwa ħafna iktar diffiċli minn meta tħaffer bir sa saff taż-żejt li sempliċement tippumpjah 'il fuq, u għalhekk huwa vijabbli biss meta l-prezz taż-żejt ikun għoli.

Il-potenzjal tas-sorsi mhux konvenzjonali taż-żejt wassal lill-Istati Uniti tal-Amerika biex ftit snin ilu għal darb'oħra issir l-produttur numru wieħed fid-dinja. Din is-sitwazzjoni kompliet sakemm l-Arabja Sawdija ddeċidiet, flimkien mal-pajjiżi l-oħra tal-OPEC (Organisation of Petroleum Exporting Countries) li żżid il-produzzjoni tagħha li ġejja minn sorsi konvenzjonali, iktar milli hemm domanda għaż-żejt, biex terġa tieħu l-ewwel post fil-produzzjoni taż-żejt, akkost li twaqqa' l-prezz taż-żejt, kif fil-fatt ġara.4

Bosta kummentaturi u analisti kkonċentraw fuq din il-ġlieda kummerċjali, jiġifieri l-ġlieda biex jiddominaw is-suq taż-żejt, biex jispjegaw dan l-aġir tal-Arabja Sawdija, li qed tkaxkar lill-pajjiżi tal-OPEC magħha. Madankollu, jien naħseb li hemm raġuni oħra iktar strateġika għal dan l-aġir.

F'April ta' din is-sena, l-Arabja Sawdija ħabbret li fl-2017 jew 2018 se tbigħ ftit inqas minn 5% tal-kumpannija Aramco, il-kumpannija statali li għandha l-kbar riżervi taż-żejt fid-dinja. Din il-kumpannija hija stmata li tiswa iktar minn żewġ triljun dollaru Amerikan, iktar mill-bqija tal-kumpanniji taż-żejt l-oħra fid-dinja flimkien!5

Meta qrajt din l-aħbar, staqsejt lili nnifsi, għalfejn dan, u għalfejn issa? U x'rabta hemm mal-ġlieda tal-produzzjoni taż-żejt mal-Istati Uniti?

Jien naħseb li l-Arabja Sawdija għarfet li l-era taż-żejt se jiġi fit-tmiem tiegħu qabel ma fil-fatt jiġu sfruttati kull riżerva li nstabet, minħabba l-ġlieda kontra t-tibdil tal-klima, u għalhekk trid tolqot numru ta' għasafar b'ġebla waħda:

•tfittex li tagħmel negozju mir-riżervi tagħha qabel ma jkun tard wisq;
•twaqqaf lil diversi pajjiżi oħra li jagħmlu dan, billi twaqqa' l-prezz ħalli l-produzzjoni tagħhom ma tkunx ekonomika;
•il-prezz baxx idgħajjef kemm jista' jkun l-investiment f'sorsi sostenibbli tal-enerġija (alternattiva għaż-żejt li bħall-faħam huwa enerġija ffossilizzata), sabiex jibqa' l-istatus quo. L-isfruttament ta' sorsi sostenibbli tal-enerġija, bħar-riħ jew ix-xemx, huwa neċessarju biex id-dinja tikkumbatti t-tibdil tal-klima.

Jidher li l-Arabja Sawdija trid li jekk riżervi taż-żejt verament jibqgħu fl-art minħabba azzjoni dinjija kontra t-tibdil tal-klima, ikunu ta' pajjiżi oħra dawk li jibqgħu fl-art, u mhux tiegħu!

Għalkemm il-prezz taż-żejt huwa baxx ħafna llum, xorta waħda jidher li d-domanda għaż-żejt mhux qed jiżdied kunsiderevolment, u jidher li hemm limitu għal kemm is-Sawdi u dawk miftiehmin magħhom jistgħu jistimulaw d-domanda.

Hemm sinjali li d-dinja bdiet iktar tħares lejn il-futur milli lejn il-passat fis-settur tal-enerġija, li ż-żejt jifforma parti importanti tagħha. Per eżempju, fl-2015, għall-ewwel darba, iktar min-nofs taż-żieda ta' dik is-sena fil-ġenerazzjoni elettrika saret minn sorsi sostenibbli.6 Jidher li l-investiment f'dan il-qasam beda jsir anke mingħajr inċentivi sostanzjali mill-gvernijiet madwar id-dinja.

Hemm ukoll l-inizjattiva ta' divestiment (l-oppost ta' investiment), li fih organizzazzjonijiet reliġjużi, akkademiċi, fondi ta' investiment u oħrajn jintrabtu li jeħilsu minn investimenti li għandhom x'jaqsmu ma' sorsi ffossilizzati ta' enerġija. Qed jiġi sostnut li s'issa din l-inizjattiva wasslet għad-divestiment ta' assi li jiswew iktar minn $3 triljun.7 Din l-inizjattiva għadha biss tibda!

Mhux ta' b'xejn din il-ferneżija fil-produzzjoni taż-żejt, x'taħseb?

1http://www.tradingeconomics.com/commodity/crude-oil, retrieved 20/9/2016

2http://www.investopedia.com/terms/u/uncoventional-oil.asp, retrieved 20/9/2016

3http://www.investopedia.com/articles/active-trading/051215/cost-shale-oil-versus-conventional-oil.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186, retrieved 20/9/2016

4https://www.iea.org/oilmarketreport/omrpublic/, retrieved 20/9/2016

5http://www.bloomberg.com/news/articles/2016-04-01/saudi-arabia-to-sell-stake-in-parent-of-state-oil-giant-by-2018, retrieved 20/9/2016

6Global Trends in Renewable Energy Investment 2016; Frankfurt School - United Nations Environment Programme Collaborating Centre; p. 13

7http://gofossilfree.org/commitments/, retrieved 20/9/2016

1http://www.tradingeconomics.com/commodity/crude-oil, retrieved 20/9/2016

2http://www.investopedia.com/terms/u/uncoventional-oil.asp, retrieved 20/9/2016

3http://www.investopedia.com/articles/active-trading/051215/cost-shale-oil-versus-conventional-oil.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186, retrieved 20/9/2016

4https://www.iea.org/oilmarketreport/omrpublic/, retrieved 20/9/2016