Making Good of a Bad Situation
As is evidenced below, a forecast exponential increase in demand is earmarked to place unparalleled pressure on world energy systems – which are already feeling the strain. Clearly, this scenario is of concern to everyone. From our perspective, ECI is positioning itself to play a part in meeting the challenges confronting an international community hungry for a ready and affordable access to oil, fuels, gas and electricity.
- According to a June 2014 report by the International Energy Agency (IEA), supplying enough energy to meet skyrocketing global needs will take unprecedented amounts of capital – with a cost estimate of at least US$40 trillion over the next 20 years to "keep the lights on!" And the cost to meet global environmental targets will only add trillions more.
As observed by Dr Kent Moors of Oil & Energy Investor, "For countries that don’t have the money to invest in new energy resources, the future looks bleak."
The IEA contends that meeting the world’s growing need for energy will require at least $2.8 trillion in annual global spending. To put that amount in perspective, that’s equal to the total annual Gross Domestic Product (GDP) of South Korea, Saudi Arabia, Switzerland and Austria combined.
That’s 50% more than the world spends now on energy.
"The reliability and sustainability of our future energy system depends on investment," said IEA Executive Director Maria van der Hoeven. "There is a real risk of shortfalls, with knock-on effects on regional or global energy security."
Much of that spending, according to the IEA, won’t even add a single kilowatt, therm or BTU to the world’s energy supply.
"Less than half of the $40 trillion investment in energy supply goes to meet growth in demand," the report noted. "The larger share is required to offset declining production from existing oil and gas fields and to replace power plants and other assets that reach the end of their productive life."
THE END OF CHEAP ENERGY
- Dr Moor highlighted that spending $20+ trillion just to maintain current production means that energy costs will have to rise. While renewable sources, such as solar, wind and geothermal power, show promise, the fact is none of them are currently cost competitive.
And it is also the case that the techniques necessary to find and extract unconventionally sourced oil and gas, such as hydraulic fracturing (fracking) and deep water drilling, are significantly more expensive than traditional oil and gas wells. In addition, the cost to process these new found reserves is generally much higher.
As the IEA notes, "Annual capital expenditure on oil, gas and coal extraction, transportation and on oil refining has more than doubled in real terms since 2000."
In terms of just where that forecast $2.5 trillion (or more) of annual energy spending will come from, Dr Moor was in no doubt that consumers will mostly bear the brunt of this cost - "especially those consumers in the countries that use and demand the most energy."
And this same commentator was also drawn to point out that there’s another factor to consider: As energy resources become more risky to develop, and political and regulatory actions add even more uncertainty, private investment has become more difficult to secure. "Increasingly, governments in North America, South America, Europe and Asia are playing a much greater role in energy development and infrastructure."
That, of course, means taxpayers, either directly or indirectly, are footing more of the bill, especially when it comes to energy efficiency. According to the IEA, households will be on the hook for more than half of all spending to improve energy efficiency over the next 20 years.
In 2013, that figure topped $130 billion or roughly 10% of all energy spending.
Many communities which comprise the global marketplace face big problems. Current energy generating capacity falls well short of future needs, prevailing circumstances render the development of new energy sources economically unfeasible, and the money to replace aging infrastructure just isn’t there.
Either these markets have to figure out a way to find, extract, process and transmit energy for considerably less than what is presently the case – which is virtually impossible – or consumers will have to pay more. Much, much more!
SEIZING THE MOMENT
- But, there is one bright spot on the horizon: Its ECI produced oil, fuels and gas – sourced from the huge volumes of waste plastic and RDF, both historically buried in landfill sites and making its way into the local waste stream on a daily basis.
Thanks to the capability of ECI energy recovery technologies and systems, we are in a unique position to deliver premium grade crude oil supplies, a range of refined fuels, and syngas to communities worldwide whilst, at the same time, presenting a viable zero waste treatment approach in support of environmental considerations.
ECI Business Models support delivery of far ranging & beneficial outcomes - with impact across environmental, social, political, waste management & energy related market segments. The Company can offer a raft of downstream value-adds. Indeed, the scope of operations can extend to comprise a value chain which spans the mining and processing of waste materials, oil and gas production, fuel refining (including transport grade diesel and other petroleum products), and power (electricity) generation.
In fact, ECI is confident it will grow over coming years to realize an extremely attractive wealth generation outcome for its investors.
- ECI already has a comprehensive package of proprietary skills and systems for application in support of the growing demand for commercially proven, large scale and environmentally friendly waste treatment & energy recovery solutions
- As evidenced by laboratory test results and refinery client ratings, we produce high yield premium grade oil (sweet crude equivalent) – of a standard far superior to alternate producers
- The Company is attracting considerable attention from media organizations (TV stations & newspapers) eager to showcase its business to an interested and appreciative audience
- It has a flagship facility in commercial operation at the prestigious Centre of Excellence in Biomass located in the grounds of Suranaree University of Technology – a leading Thai research and educational institution
- With a rapidly growing order list
- Plans for a series of Mega Renewable Energy Projects earmarked to be established in Thailand over coming years; and
- Considerable interest of a business development and related nature from parties in other SE Asian markets and the wider international arena
This presents as a massive opportunity for ECI, including its Shareholders, Strategic & JV Partners, staff and clients.
ALAN DAWSON: CEO, ECI GROUP