Cleaner fuel offers feasible solution
If the objective of developing more efficient supply chains is to reduce carbon emissions or to become more environmentally-friendly, the solution does not lie in complex algorithms; it begins with cleaner fuels.
I’ve had this discussion with many of my friends in the energy industry and the conclusion is that oil is still and will be the predominant source of energy for the next 100 years and beyond.
First, it’s about the economics. On average, it costs $5 (Dh18.3) to produce a barrel of oil. That figure could rise to $10 to $15 depending on location.
At today’s world prices of $100, that’s a deference of $85 to 95 per barrel, which by all comparisons is a very healthy margin and motivation for oil companies and oil producing countries to continue with oil exploration and production.
After all, it’s the windfall revenues earned from oil that have brought some countries into the modern world. The only alternative that comes close is geothermal, which is limited to only certain parts of the world.
Second, there is no shortage of oil on the planet; it’s simply a matter of getting to it. For example, the Arctic holds an estimated one fifth of the world’s reserves. With the northern passage becoming more accessible due to the melting of ice, oil companies at this very moment are considering exploration.
Oil companies such as BP have already developed the technical know-how and experience to drill in deep waters, not to mention expertise in enhanced oil recovery. Countries such as Brazil have recently found vast reserves, which they are eager to monetise.
So until the oil runs dry or countries muster the political will to curb production drastically, the supply chain models will have to look for other means to achieve environmental sustainability.
Randall Mohammed, Dubai