Category Archives: Oil

Lack of Energy Crisis in Brunei

Everyday I read the newspaper, there is always an energy related news. World fuel prices going up, countries removing or reducing subsidies, oil price hike, world record oil prices and so on. Just check up or with  oil price or energy crisis and you’ll get tons of info.

Upto date Brunei has yet to fully feel the effects of the increase in price of energy. The subsidies are still maintained, car purchases are still rising, energy usage is also rising. Some believe that the price hike will never happen. I am afraid that they may be wrong. Call me chicken little, but there has been signs that Brunei will be affected the same as the rest.

It is a globalised world, yes the word has been overused over and over again. Some may not even truly understand the word, global village or globalisation. The word basically means that no country is an island, The effects on one country can affect others whether it is close by or not. Brunei has not been completely immune to the increase in food prices. The Brunei government may subsidize fuel, electricity and rice. But there is only so much the government can do. Mee Goreng Noodles have gone upto $1.90 from $1.40 early this year. Flour, cooking oil, bread, meat and dairy products. Strangely egg prices have dropped from $5+ down back to $4.50, go figure.

As to be expected all consumers do is complain, and the business side can only answer that it is due to price increases. Some consumers do not even understand nor can accept this excuse. As they know that the oil price within the country is still the same, nor do they realize most food products are imported from countries such as malaysia and indonesia, where oil prices have risen dramatically early in the year.

Back to the signs, there is a theory called peak oil theory, basically assuming that oil and gas is a non-renewable and therefore limited commodity, there will be a point in time that the rate of fuel exploration and extraction will reach a peak and continue to decline. Check wikipedia on peak oil theory. Some have assume that america has already reached this peak oil. I’m guessing that Brunei’s Peak oil will be reached in 2013-2015. These is mainly from observing that the government departments have recently acted strangely, and with the publishing of a book about Brunei’s Long-Term National Development Plan 2007-2035. I’m curious about the years that were chosen. I’m guessing, that the end year is when the oil production has decreased, and therefore the government has is hoping to diversify and strengthen the economy away from oil and gas. I hope I am wrong and that our future will be prosperous for more years to come.

I don’t mean to be a fearmonger or a chicken little. But I think the earlier that Brunei population realize that we should not take for granted a lot of our benefits, the better off we will be. Fear is only natural, to panic is inappropriate, action is needed. For my part, I am trying to diversify the economy through business, one step at a time.


Energy Forum

I was a panelist in the energy forum on the 29th of May 2008. Prior to the event I had done a few research no the international and local perspectives concerning energy. Mostly I researched on the Oil and gas market. I have had kept tabs on the rising oil and gas prices since 2002, when Bush decided to go to war in Iraq. The price of oil per barrel was $20. The current record high was reached on June 6, 2008, at $138.54/barrel. a lot of my research was using google, wikipedia and howstuffworks. just search on oil price and you got a lot of people talking about it. At the forum we had limited time, so I decided to share more in this blog.


From what I understand is that oil prices nominally increases in price mainly due to inflation and the cost of extracting it. The more oil we take out, the more harder it is to find and extract.

Market prices are usually due to the market supply and demand relationship, if something is abundant and the demand for it is little then it is cheap; and if something is limited supply but the demand is high then the would become expensive. Like an organism, the world’s population is growing and developing, and with this growth, the hunger for energy increases. Some have argued whether the supply is keeping up with demand. Personally I think it has, as I don’t see any signs saying “sold out” anywhere. Many have argued that the recent price hike is due to Market speculation which is in turn due to the weakening US dollar (due mainly to the sub-prime crisis), which entices people to invest more onto oil as commodity, especially since oil and gas is non-renewable resource makes it appear in limited supply. And then theres the geopolitical factors of what is happening oil producing countries such as war, rebellion and so on.

The demand of Oil and gas prices are not solely on energy production, but it also greatly contributes to the world of chemistry. Petrochemicals are used to create plastics, synthesizing chemicals and cosmetics.


The ever increasing price of energy has forced some people to find and develop effiicient use of energy or alternative sources. Some of these are biomass, biofuel, hydroelectric, geothermal, solar and nuclear power. Interestingly each of these are derived directly or indirectly from the sun. each and everyone of these alternatives have their own advantages and disadvantages. Mostly it is a problem of efficiency, sustainability, reliability and environmental effects.

The higher cost has also made the expensive extraction of difficult fossil fuels more viable. Such as those of Sand Tars and “Dry Wells”

One of the pressing economic problems of biofuel- the use of plants such as soyabean, vegetable oil and palm for diesel enhancement or replacement; has caused the increase cost of the world’s food cost. Which I think is making the world economy worst. Several countries are suffering because of this.


A hopeful alternative is the use of novel methods, which have are being researched but are not commercially viable. My favourites include Fusion, Cold fusion, and zero point energy. Nuclear Fusion is a huge contender, but it has yet to produce more energy than it consumes. If alternatives such as these were to be achieved, it would solve the worlds energy hunger. Of course this may affect fuel prices to point that it would become less valuable as depicted in movies such as Chain reaction starring keanu reeves and morgan freeman.

I’ll be talking about how I think the energy situation will affect Brunei in my next blog.