Another Peak Oil Report from the U.S. Military

After the United States Joint Forces Command published its Joint Operating Environment 2010 report in February this year in which the issue of peak oil was mentioned, the US military has one again dealt with the issue in a new report entitled Fueling the Future Force: Preparing the Department of Defense for a Post-Petroleum Environment.

While the report has made some unrealistic assessments about biofuels, it does make an important point, namely that we are currently in a period of relatively cheap oil prices and living under the misconception that there are ample supplies, resulting in prices not reflecting the true value of oil and a lack of incentives to move away from this source of energy. This sentiment is similar to the one expressed by the late Matthew Simmons, who said that oil was too precious to be burnt away in cars as transportation fuel.

The point regarding the lack of incentives is particularly pertinent to Singapore, as one of the reasons for the slow pace of deploying solar energy systems is that they are not economical at current oil and natural gas prices. Whether or not we will be able to make the transition in time towards using more solar energy systems in the future when oil prices are sufficiently high is at present a matter of speculation. That said, from an energy security perspective, it would appear to me to be prudent to start working on the transition now even when it does not make short-term economic sense, since we do not know when supplies will become unavailable even if we are willing to pay the higher prices that will definitely be demanded for the remaining precious supply of oil.