Below is TOC columnist Leong Sze Hian’s letter to the Today newspaper, published on 10 December 2008:
I REFER to the reduction of the electricity tariff by 25 per cent in January.
According to the Energy Market Authority’s (EMA’s) chart on fuel oil price versus the low tension tariff, the tariff was $22.62 in January this year when fuel oil was $96.64.
Since the tariff is pegged to fuel oil, why is the tariff for January next year, at $22.93, higher than that in January this year, when fuel oil is now lower at $92.99 compared to $96.64 in January this year?
This means that year-on-year, despite a 4-per-cent fall in fuel oil, the tariff increased by 1 per cent. So, is the tariff pegged to fuel oil or not?
The 25-per-cent decrease is relative to October’s 21-per-cent increase.
Against the tariff of $23.88 in April, the decrease is only 4 per cent, and is still 1 per cent higher than January’s $22.62.
With all the Utilities-Save (U-Save) rebates to help Singaporeans, why has the number of households in arrears increased from 3,600 in 2006 to 5,090 in October, and the number on the Pay As You Use (PAYU) meter scheme also increased from 12,200 in December 2006 to 13,243?
———–
***
***
HELP keep the voice of TOC alive!
If you like this article, please consider a small donation to help theonlinecitizen.com stay alive. Please note that we can only accept donations from Singaporeans. Thank you for your assistance.Do you have a flair for writing? Volunteer with us. Email us your full name and contact details to theonlinecitizen@gmail.com
Why still expensive?
Oil price latest news US$43 down…..
What did the government do?
This will be the only way to know for sure how fair is the pricing.
Similarly , this can apply to Flat costing, and all price hikes now and in the future.
And lets understand that Transparency is not just about annual reports which give only summaries.
Very simple answer. The decision makers are not nimble enough to lower the prices BUT they are deemed super efficient when up the prices!! This is profit making. The reason for these Companies reporting year end profits for the owners and towkays. Where is the social order? My foot tell me there is no such thing.
when price of oil dips, bus fare, and MRT fare still remain the same, utility will go down next Jan but transport fares how ? someone , Mr Leong or Mr Tan or opposition please question the govt !! We should vote in Mr Leong, Mr Tan to question the govt if other oppositions can’t do that
When excuse aerlier given, fuel is rising transport to tariff price need to be up but why isn’t transport and tariff not going down when the fuel is going down? Singaporean should stopped accepting the said excuses by service providers. The amount have to be adjusted. If people are accepting job lay-off, so should price falls be accepted by service providers. Who is responsible to make the changes the people or the government? If the people were force to do so its a kiosk but when the government takes the initiative its proactive.
crude oil dropped to 4-year low. why are we still paying sky-high tarriffs?
they used rising price of oil to exact more payment out of us. so why aren’t our bills coming down when the price tumbled?
btw, st recently published an article to say that the price will come down 25% from the preceding period. pls, we are NOT idiots. The preceding period was the highest ever – not forgetting that it was during the same period that the price dropped precipitously. 25% drop from the peak, when crude oil dropped by more than 60%, does seem a fair deal to consumers.
I think it would be interesting to find out
how many people understands that it does not make sense when
oil price , that fluctuates, is used as reason for price hike
when price hiked does not go down, even when oil price does go down and have gone down extremely.
Out of 100 000 people, how many % do you people think would understand the above and yet continue to do nothing about it ?
It think 99.9%. 0.1% are rare cases.
just my opinion.
regards
Super Computer manager
Sadly, I can only say that majority of Singaporeans are a simple lot. They tend not to think through issues and readily accept what is dished out by the gahmen as gospel. 25% down on SP rates come January 2009 and many, many people are jumping for joy, some even say “Christmas came early” (they have rocks in their brain, I surmised). They think the gahmen had listened to the grouses and taken the necessary actions to lower the rates in January. NOTHING is further from the truth! We have been CHEATED from October 1 2008 to 31 December 2008 by SP Services by their 21% increase in the utility rates when in fact it should have been lowered. We have and will be paying extra, extra of our hard-earned money in these hard times for these 3 months through some stupid and wrong formula that EMA derived in coming to that 21% increment. They can explain until the cows come home to justify their actions but will NEVER, NEVER admit that it is wrong.
So that 25% decrease given to us is only giving back to us what they have and will be taking wrongly from us from the preceding 3 months from October to December 2008.
End of the day, we are talking only of a net 4% decrease from the July to October 2008 rates – which is the highest in recent years. Oil prices have drop so drastically these few months from its peak and we are talking only of 4% off a peak rate (we can ignore the October to December 2008 rate of $0.3045 per KwH as that rate is and will be a mistake that EMA will never admit). Just look at the pump prices – even these have come off drastically in recent weeks. The utility rates is just NOT following as quickly as it should be and for every month or quarter that it is slow in following suit the crude oil prices, we are essentially being “cheated” in that sense by paying a rate that is incorrect.
Good afternoon,
Two issues come into play here; lot sizing and bounded inventory. The relationship between these two become very complex when you see them against the need to balance 4 factors, price setting / demand / inventory / backlogging cost functions – they are not necessarily linear or related either (they should be, I admit), sometimes they can go their own way.
This is complicated. Very complicated. So let us try to gut out the gobble d guck and make it simple.
Let’s say you run a chain of kopitiams. Suddenly the price of coffee beans shoots up by $10 per kg to $20 kg – what do you do? You raise the price from 50 cents to $1 per cup.
One evening you’re just sitting around in the kopitiam annual convention and suddenly someone tells you. The cocoa traders in the ivory coast have gone amok and they’re setting fire to their plantations; that same person goes on to tell you, Kopitiam A & B who happens to be your rival in the same street has recently placed a 6 month rolling order for 2 tons of coffee at $20 kg bc their feng shui sensei believes the dragon is not happy in the confluence where the Okavango mets the Molopo – the may price even shoot up to $30 in the next few months!
You promptly do the same and so do the other kopitiam owners in the same table; you place an order for 6 months inventory of coffee beans; a few weeks later the price of coffee beans goes down to $10 per kg – its all over town and plastered across the front page of every newspaper.
Your customers ask you; why is it; you’re still charging $1 per cuppa?
What they don’t realize is by that period; you HAVE to charge $1 bc what they’re actually paying for is no longer the coffee per se, but everything else that makes that cup of coffee possible and that includes the interest for the 6 months of coffee beans that you have placed, along with warehousing and backlog inventory etc
The price should go down with time you say every evening to your wife, bfr you turn in; but there’s a rumble in the congo; and its hard to be sure whether this price of $10 per kg is here to stay or maybe it’s just a lull in the storm – and there lies the dilemma; what if I reduce it to 50 cents per cuppa again and then raise it up again to $1 a few weeks latter?
What if my customers say, how siauh? Problem, problem…problems.
[Have to go in for a conference call now...its time for coffee]
SD (Internet Liaison officer of the brotherhood)
Its certainly not just drawing a straight line here. Its complicated, very complicated indeed.
haizz, it has been getting tiring of taking about these. Policies are not going towards the people. Everything, just everything is going up up and up. What about the salary? Salary must be adjusted for inflation. What is so call open economy when there is simply no force to prevent corporate from ripping off consumer surplus? Consumers have to simply cut back by having less entertainment and stay at home.
Isn’t the government is involved in every industries? When the ministers are actually the key holder of various corporates, don’t you think there is actually a conflict of interest? For the people or for the company?
The only thing I want is the right to vote. The right to give them a good piece of my mind. Please do away with GRC. Singapore has to change; a two party system.
This Pricing issue and puzzle
serves to lead us to think about other price hikes that were justified or may be justified in future by using oil price as the reason.
When transportation-related services price was hiked using the same reason,
does the PEOPLE / CONSUMER question what happens when oil price went down?
Even if businesses say they buy oil in bulk based on a previous earlier price that is super high, AFTER SOME TIME, will they lower down the price?
if the PEOPLE forget this issue as time goes by, then I fear this question may never get answered satisfactorily, just like many other questions that are piling up.
But 1 day, most of these will be answered.
TKL please run.
They are the blood sucking gov link companies. Every word start with a “S” Suck…until u get broke.
In Singapore, what goes up will seldom come down
their feng shui sensei believes the dragon is not happy in the confluence where the Okavango mets the Molopo – the may price even shoot up to $30 in the next few months!
Very funny SD :) Only price variation over time isn’t a funny thing especially when it comes to things we all cannot avoid not using like electricity.
Do suggest long term solution
11) Ye Pei Feng on December 10th, 2008 3.33 pm
“if the PEOPLE forget this issue as time goes by, then I fear this question may never get answered satisfactorily, just like many other questions that are piling up.”
People will not likely to forget this time. Comes bad economic time and with many retrenched with no jobs, people will have plenty of free time to think about of a lot of things.
Things that they do not usually think out of complacency will out of a sudden become very important when they start to search for all the “missing dots” to connect.
Crisis does improve your memory, intuition and survival skill better. What an irony.
4) Tew NS on December 10th, 2008 1.36 pm
when price of oil dips, bus fare, and MRT fare still remain the same, utility will go down next Jan but transport fares how ? someone , Mr Leong or Mr Tan or opposition please question the govt !! We should vote in Mr Leong, Mr Tan to question the govt if other oppositions can’t do that
I refer above which gets my thumb up. TKL, LSH and Gilbert Goh should meet up to give the ruling Party 3 cts worth of competition in the next GE. All 3 have been identified so far as talking sense wilth reasonable arguments – centralists and certainly pro-Singapore. As time is a constraint, all 3 get started fast to set the momentum. Plse do not get shuffled into joining the present stupid Oppositions or what TKL kindly referred them as “alternative” Parties.
TOC “bongo”, “wanaba”, “hanjo pucho” and “half-baked” people should put all their wts. behind these 3 TOC front runners and carry them into the next Parliament!!!
Living in digital age today, I tend to question why when some cost goes down, why we do not benefit from it immediately… Until a smarter friend explained to me that the oil from Saudi needs to be pump out from oil well, into the tanker then make it way here…Just don’t know the Power company needs to pay first when they order or when the oil arrive. Then the oil must pump into the generator… burn then convert to electrical supply… At least utility charges will be going down. Hope the others like MRT/Bus fare can reduce their price soon too.
16) Oscar Choy on December 10th, 2008 4.30 pm
Wow man, you are really magical. At least, you know there are decent people like TKL, LSH and Gilbert Goh.
For once, I thought you were some crackpot crawling out from our sewage system. There is really a tinge of hope afterall. Good work.
you forgot to factor in their year-end bonus …
My water bill shot up 4 times (and above the national average) even though ALL months preceding it the usage consumption was constant. This happened in the USave rebate month.
Not linking this to anything but just saying that, even as we question why we must pay this high rate for utilities, do carry out checks on your bills as well. SP Services might be overcharging us.
All the above comments are very true .
What the hell are the regulators doing?
EMA, is electricity tariffs really pegged to oil prices?
Or peg to provide filthy rich salaries for the elites?
When oil prices were rising, SMRT, SBS, Taxi companies, school buses are quick to impose a fare hike. Now oil prices is back to below average, what happen to the fare hikes? IRREVERSIBLE?
PTC, where are you? What’s the use of a regulator when it doesn’t do its job?
aiyoyo
oil price so low, but the electric bill think still charge at very high rate leh
(recently news got say ma)
why like that to commoners huh?
who is the ELITEs that so smart (kiang)
go and buy at high price (not sure got keep stocks or not?)
think we can be own procurement also, correct?
(because it’s our own $ sure wont luan luan buy, right?)
aiyoyo
well…looking from another point of view, at least they decrease the tariff…unlike public transport whereby what goes up doesn’t come down
WE TURN ON THE POWER WE PAY
THEY BURN THE FUEL WE PAY
THEY SELL THE BURNER WE PAY
THEY UP THE PRICE WE PAY MORE
THEY DOWN THE PRICE WE STILL PAY MORE BUT LESS
WE COMPLAINED BUT THEY SAY WE PAY LESS IF WE ARE CAREFUL
POWER HERE NOT CHEAP AND $$$$ GOOD FOR INVESTOR BUT WE PAY.
FORGET ABOUT OIL PRICES JUST PAY OR DON”T USE
CAN WE????????? IF NOT JUST PAY>>>>>>>>>>>
$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Now you people will finally realised what kind of garment we have here in Singapore. We people has been plucked so many times and again and still think that without them our nation will collapse in 5 years? Well, this is the kind of fear they have always wanted to implant it into the minds of all you people all these years, isn’t it? They are just being lucky to stay in power for so many years not because we allow them, its just because we are not those who likes to create problems. Just see for yourself what happened lately to Thailand and now in Greece, the chaotic scenes of their citizens when they decide to be united as one big mass! these are what can happen when the citizens are being pushed to their limit where living each day becomes like hell and still the garment just don’t give a shit of what happened at ground level, still they continue to make more and more money out of the citizens almost empty pockets. I wonder how long more our garment will continue to test the patience of the people of singapore, remember there is always a limit to everything in life. Hope that they get the message well.
The pegging of tariffs to a fluctuating market variable is supposed to make prices flexible. However, there is also the phenomena of ‘price stickiness’ in economics 101.
Price increase is unlikely to be adjusted by a price decrease of an equal proportion or for long in flexible pricing. ‘In theory’ is one thing, ‘in practice’ is another. I believe in the long run, the tariff will see a steady increase as energy is a scarce resource. So long as gas and oil are used to power the generators, the trend will be an increase. This will be a fact of life.
Instead of arguing how ‘unfair’ it is to use oil prices as a variable in arriving at the tariff, perhaps the authorities can change the way how meters are read (with more reliable and accurate indicators instead of using estimates) and thus allow families more control on the way electricity are utilised.
Answer is simple. When oil price down they dragged until slightly up and justify their price! Like what we used to shout in the army, bloody bunch of “Cao Ku Niang” (smelly sisi in hokkien)!
Vote the opposition to slap the PAP face! Send Leong and Tan into the Paliment to null the PAP!
Dear magus
They don’t check the meter anyway, they only select a few households in the building and take the mean test! Just imagine how many manpower they need to deploy to check meter by meter.
What I suggest is to keep track of your meter on monthly basis and match the one that they sent you to see if there is a different and ask them to revise! Take photo of the reading with date and time stamping!
“Price increase is unlikely to be adjusted by a price decrease of an equal proportion or for long in flexible pricing. ‘In theory’ is one thing, ‘in practice’ is another. I believe in the long run, the tariff will see a steady increase as energy is a scarce resource. So long as gas and oil are used to power the generators, the trend will be an increase. This will be a fact of life.
Instead of arguing how ‘unfair’ it is to use oil prices as a variable in arriving at the tariff, perhaps the authorities can change the way how meters are read (with more reliable and accurate indicators instead of using estimates) and thus allow families more control on the way electricity are utilised.”
Brilliant…magus…you’re moving in the brotherhood direction…that’s good, very good….go one step further….you’re very close to the solution.
I will come tmr to flesh it out further. Yes, my children, you thinking now. You r really thinking. That’s good.
SD
Unfortunately, if they have to raise the tariffs despite lower cost, there’s nothing we can do.
What can we really do?
Seriously?
What can we really do, as people on the ground?
31) Parka
i sure wish there is something that we can do to help improve everybody’s life. but the chances of it is nil…and the cycle will keep repeating…another crazy increase…and all we can do it just criticize it
24) SZ on December 10th, 2008 6.36 pm
well…looking from another point of view, at least they decrease the tariff…unlike public transport whereby what goes up doesn’t come down
————————
Transport hike : I would not be so concerned had the hike reason they used was not OIL.
Read my theory here:-
http://arthurboon.blogspot.com/2008/12/why-singapore-power-must-make-money.html
This is the first “bitter pill” to swallow for selling the three power plants to the foreigners. It is not what it seems when we were told that we will get a better and competitive rate these assets were sold. Can we believe their sound and solid strategies not to hold on to these assets? Now, we are paying more and not less for our electric bills! Do you think you are getting a good bargain or discount as promised? Think again!
Mr Leong Sze Hian, I wish to ask a question do you agree with Singaporedaddy’s analysis that one of the reason why the tarrif remains so high despite the recent price dip in oil is due to a lag in inventory and backlog orders?
Mr Chia, “25% down on SP rates come January 2009 and many, many people are jumping for joy, some even say “Christmas came early” What are you saying this price dip is just temporary?
Can someone please comment on where oil prices are going? I am thinking for buying a car and would seriously value some intelligent advice on this matter.
Dear Jimmy Teh
To know more about oil price fluctuation, I suggest that you search in the internet under “oil peak”. It will give you a indept over view of why oil price up and down. According to the author study, oil has been used widely as a political tool to win vote in USA. It would be fair to say that oil price fluctuation do not actually reflect the real demand most of the time.
Ask anyone working in SHELL or other petrol refinary, you will know that the price of oil is stable thru out time. Rather, it is the country tax that play a very important part that hurt the consumer! You don’t have to look far, just opposite of our island, you will find that Malaysia is pricing their oil price almost the same as Singapore, except they are in ringit we are in sin dollar. So, if they can price their petrol at that kind of price, why Singapore choose to set at current?
Yes, you can say Malaysia is subsidized and their petrol is poor quality (does it really matter as long as it is 95 grade?). Last year, Malaysia stop subsidizing foreigner. Then again, even at their not subsidizes rate, it is still cheaper than Singapore. For this, I conclude that petrol price in Singapore is just another tool for Singapore government to fill their pocket with money! Nothing to do with the actual fluctuation. So, I believe what Leong say is right. It is only temporary. Because when PAP need to fill their pocket, you most likely to see it goes up. The reason why it is down now is because, like USA they are using it to buy votes to stop the complaining.
35) Singaporespirit on December 11th, 2008 10.04 am This is the first “bitter pill” to swallow for selling the three power plants to the foreigners. It is not what it seems when we were told that we will get a better and competitive rate these assets were sold. Can we believe their sound and solid strategies not to hold on to these assets? Now, we are paying more and not less for our electric bills! Do you think you are getting a good bargain or discount as promised? Think again!
As far as $$$ is concerned, our garment never stop and will continue to pluck us citizens time and again, this is our papees policy, they sells our power staions and made billions for themselves at the expense of the consumers like you and me, simple. These elites are only concern in money making policy instead of looking after the peoples welfare cos THEY JUST DON’T GIVE A SHIT about you people. When they accumulated enough funds, they will start their usual self approving pay rise again, so the already millionaires elites will be looking forward to become billionaires soon. Even if they die, they will bring their $$$ with them to their graves.
You ask why? My answer: The PAP Government needs money.
Good Morning 36 jimmy teh
Let me put it this way; this is not a case of how you wish to cut the diamond. As much as how the diamond will allow you to cut it – it’s really a game of balancing constraints; once you’re pegged electricity to oil, IMHO you’re as good as “locked in.”
There is very little room for maneuver. The $64 million question is whether this recent lowering of oil prices is just a lull before the storm. Or is it here to stay?
I rather play it safe and go with the assumption that high oil prices may be here to stay for good.
As for peak oil theory? I don’t buy it; bc it’s based on idea that the natural limits of oil has been exploited to its finite limits i.e the top of the bell curve has been reached and its downhill now from this point onwards i.e demand will always outstrip diminishing supplies; the problem with that theory is, it assumes there is NO more oil; that’s not true; there is plenty of oil around; the problem is mining, processing and delivering it at a cost effective price – so its fair to assume businesses will eventually step up to the plate in the near future to exploit these reserves.
Now having said, there is very little room for maneuver; this doesn’t mean, that there is no way to reduce cost further; there is, we just need to be more clever in how we manage electricity; but before this can be seriously accomplished; service providers FIRST need to shed their glorified postman mentality by regularly “passing-the-buck-to-end- users.” It’s conceivable they are complacent and even lack imagination here.
I personally don’t see any “value added” in passing on the cost to end users that’s really a dummies way of continuous improvement – my feel is if we are going to get on top of how to balance high oil prices to deliver growth; then an entrepreneurial rather than a bureaucratic mentality is required, it’s really a lateral thinking game; and I do have SERIOUS reservations that the current outfit even has the right mentality to succeed in this game. Incidentally this doesn’t just apply to just electricity, it could just as well apply to transport, healthcare and even how how one usually goes about accounting for govt expenditure as well.
One area that should be looked into is automated billing; I don’t understand why we still need to rely on meter readers these days. So if we can do away with those extraneous cost; that would certainly help lower the cost further; another thing about “managing” anything is you always need a clear line of sight; and the logic there is; if it’s a black mysterious box, then how do you even begin to manage it?
I remember someone telling me, Darkness once drove down the quality problems for one of his curry puff tycoon buddies in Malaysia by just putting up a giant board in the canteen where the number of customer complaints was put up. Previously, the workers didn’t give two cents about quality or customer complaints (that could probably explain why some worker in Prima-you-know-who decided to wipe his ass with chocolate cake); but once you bring it to their attention in such a forward in-your-face manner – it drives the point home. In the same way automated metering will allow users to monitor their electricity consumption in real time; the logic isn’t so different from how petrol stations regularly put up large signs advertising the price of fuel to motorist – there is a feed back loop.
So that is one way how technology can come in to save people and planet. But you’ve got to be careful with augmenting anything with just technology alone.
Sometimes, it can work against you. For example, MRT wants to put up acres of glass partitions; bc some people think it’s a great way to say bye bye to the world Anna Karenina style. I disagree. I think in that case the cost can never commensurate with return on investment – makes far more sense to station counselors on suicide prone platforms or beef up the social services to fill up that hole.
Thanks
SD
Electricity price is pegged to oil prices ONLY WHEN IT IS BENEFICIAL TO THE COMPANY.
Other times, just charge a higher rate.
It is agreeable that oil is abundant in other form, but not necessary cost effective to make them available. Most important, those fairly easy to reach virgin oil reserve fall in the US-not-so-friendly countries such as Iran. Unless the US wants to use force to gain access, then again, country like us will pay for US “service” which in term translate into high oil cost.
“Peak Oil” cannot be taken literally as in there is no more oil in the world. Rather it is about whether it makes economy sense to continue using it? This marks the end of the resource, unless some technologies make it cheaper to access the so-called “abundant” oil.
“Peak Oil” means the midway point of production of the fairly easily recoverable fossil fuel. It will still be physically abundant, as will the unconventional sources. The problem really is the end of CHEAP oil. That is what has driven and is still driving the world’s economy. The most important product right now is gasoline. It can be made from sour crude, tar sand, and even coal, but not at a final cost to the consumer of a few dollars a gallon. What good is it if the only way for the refiners to break even is to charge $20/gallon or even more? No one will be able to afford it, which equates to the same thing as it not being physically available, which causes a melt down in the economy as everything dependent on the mobility afforded by gasoline becomes out of the reach of all.
No, there will not be enough oil for the world demand because:
1. To access the so-called “abundant” source will risk causing further damage to the world environment that we already had due to our past industrialisation. It is to say we are seeking self-destruct.
2. Current technology cannot make oil accessible at current price because we will have to go deeper into the sea, melt down ice berg before we even start drilling, convert coal that pollute the earth in order to satisfy the world demand.
3. It takes many years for CO2 to be kept within the earth to normalise the world temperature. Every time a oil well is dug, you simply release CO2 faster than industrialisation activities and cars. Therefore increase the world temperature!
The Truth about Energy:
http://www.energyandcapital.com/articles/truth+energy-peak+oil-oil+reserves/475
Author himself:
http://www.nuc.berkeley.edu/Chris-Nelder
“One area that should be looked into is automated billing; I don’t understand why we still need to rely on meter readers these days.”
One meter = few hundred dollars + telephone line charges. Cheaper to do bi-monthly meter reading.
Actually if you want exact billing every month, you can actually post your meter reading over the internet or by post (FOC) to SP Services. Then your bill will be based on actual rather than estimated.
As for passing the buck, speaking as a citizen, it starts all the way from the *cough* top…
BTW the components of the tariff isn’t just fuel price alone. You have transmission charges, capital cost charges, exchange rate, WACC. All these are variable. And the tariff is set against FORWARD PRICES not SPOT PRICES (Leong Sze Hian’s letter). Please do some research and get your facts right first.
Again for those interested, please refer to EMA’s information on vesting contracts.
There is an established method in calculating the vesting contract strike price (linked to the tariff) and “target profit” is not one of the parameters.
Facing the Hard Truth on Energy:
Very detail report that took around 2 years to prepare. You can even download it.
http://www.npchardtruthsreport.org/
I sincerely urge more Singaporean to be awared of the TRUTH about energy. Those refuse to believe will one day find that we are in not the GOLDEN ERA but CAVEMAN ERA.
http://downloadcenter.connectlive.com/events/npc071807/pdf-downloads/Report_Slide_Presentation/NPC_Presentation_71807_Final.pdf
Good afternoon red man,
I understand where you’re coming from and thx for the links – do I deny that crude production has peaked i.e most major oil fields in the world may have reached the tipping point where they are extracting less these days? No.
Let me put it this way Red man; if you speak to practically every single expert who supports peak oil theory, don’t be surprise if all of them have been co-opted by electric cars firms, wind independent power producers etc.
You know why? Bc electric cars can only have an intrinsic value, IF you believe fuel is a finite resource. I agree, those guys are slick like Darkness; by the time they show you all their colorful charts how output will always fall short of demand based on X, Y or Z years. You’re going to step out of the presentation believing that all of us are going to commute around in a donkey sometime in the future.
Are peak oil adherents wrong? No. They are right, PROVIDING you chuck out one thing that accounts for their entire formulation – that’s to say, although they take into account two very important metrics which is global oil OUTPUT and CONSUMPTION. They don’t take into account CONVERSION efficiency.
Why is conversion efficiency so important? Because peak oil adherents just want u and me to register the fact, you’re putting in $150 in your tank every time you pull up to the kiosk. The math of peak oil doesn’t go further to ask what kind of car are you driving? Is it a V8 turbo charge? Or is it a fuel efficient Honda Fit?
So what peak oil adherents fail to take into account is when something becomes pricey; then people are just going to find ways and means to use less of it. Or to try to make more efficient use of it.
Now one reason why GM and Ford is in deep financial trouble today and wearing knee pads to beg for money from the US senate isn’t because they are lousy car producers; they’re just produced the wrong type of cars in a market segment that no one wants to buy these days i.e fuel guzzling SUV’s. See my point, when I say people will find ways of using less of something when it becomes pricey. They want smaller fuel efficient cars; if you notice Toyota doesn’t have 1/100th of the problems GM has – why? Its invested in smaller fuel efficient cars that everyone wants.
The second thing that peak oil adherents don’t ever tell you is that the petroleum industry is the most terminally supine and complacent business on this planet. They have as much innovation as a bunch Amish sitting around a homemade candle; why’s that? Because oil extraction and refining is a no brainer and traditionally, the industry as a whole shuns innovators and smart people; clever people don’t want to work for Texaco or BP. Americans call this the Philip Morris syndrome / dead beat industries attract deadbeats.
But that was bc oil has always hovered at $60 per barrel, now at $147, the smart people are going to say, lets muscle in on these deadenders – so what you’re likely to see in the near future is the dumb people are going to get edged out very soon from the petroleum industry. At $147, they have no where to hide. And when the smart folk come in, they’re not going to just do things like what the dummies used to do – they’re going find even more innovative ways to extract oil from stuff like sand tar etc; and that means although in real terms the yield will be smaller, the conversion efficiency will more than make up for the short fall.
That’s why there can be no such thing as a theoretical peaking of oil.
Thank You red man
SD (Internet Liaison officer of the brotherhood)
“Actually if you want exact billing every month, you can actually post your meter reading over the internet or by post (FOC) to SP Services. Then your bill will be based on actual rather than estimated.”
No Eveline. What I mean is take out those mechanical meters / and donate them to national steel and put in on line meters that can relay real time info to consumers.
That way, I can check my electrical consumption online in real time / the logic is this / if I have to keep tabs on my electrical consumption without having to regularly open up my spider infested meter cupboard to find out how much electricity I am consuming, then I will be in a better position to manage consumption and cut down. This is very different from your proposal.
The point is to make the whole cycle of consumption transparent, I really believe one reason why people dont cut down on electricity is bc they dont have the tools to do so. SP and EMA should look into this.
That way people will know when to pull back; its really human nature. That why when I go out for drinks I leave my credit card at home, that way, I am forced to chat up fat girls who will buy me drinks.
Makes perfect economic sense, but I admit its bad for my new tires.
SD
Like I said, these meters cost a bomb and you need a telephone line to connect it to the “mega billing system” operated by SP. Contestable customers currently use these time-of-day meters only because their bills are calculated every half hourly.
Not to mention you need to set up the backend to cater to such metering. That costs money too and guess who will pay for this?
Barring the tricky question of “who pay”? the cost-benefit so far isn’t tilting in favour of TOD metering. 1.2 million households X $500 per meter (assume) = you do the math.
Much easier to check the rating of the appliances you use regularly and cut down on their usage.
If or when full retail contestability is implemented, and depending on the model chosen by the EMA, all households may have these TOD meters installed. I suspect it won’t be the case though, but let’s see.
Then again there’s been successes overseas with these smart meters. We’ll see what the EMA decides next.