Strangely, in their search for alternative fuels, auto manufacturers are not giving due importance to the most important of quasi-alternative fuels, that is, compressed natural gas (CNG), which, in fact, is a fossil fuel only! CNG is environmentally a cleaner alternative to traditional petroleum products, with fuel efficiency equaling that provided by diesel engines. But why should the CNG focus be increased dramatically? Because countries like India, where the auto markets are expected to have the hugest potential, have extremely large and cheap CNG resources. A report by the Global Environment Facility of UNDP on India’s Coal Bed Methane (CBM) extraction potential states, “It is estimated that in India, the largest coal producer in the world, there are around 20,000 square kilometers of area where CBM capture could be carried out; the country’s recoverable methane reserves are 800 billion cubic metres, with a gas production potential of 105 million cubic metres a day over 20 years.” Compare this with Saudi Arabia’s daily production of oil, which stands at only (relatively) 9.5 million barrels a day. Makes sense? Not perhaps to the global auto industry.
The no-brainer auto issue #4
That’s the one to do with oil. The fact is, despite all doomsday predictions of major global auto firms betting on alternative fuel, oil reserves don’t seem to be ever running out in the near future, and that means for the next hundred years at least. Look at OPEC’s latest reports, which estimate that between the years 1995-2003, because of newer extraction techniques, new discoveries had actually improved recoveries by almost 138 billion barrels. By 2020, oil production will cross a smashing 1,600 billion barrels annually with reserves close to 3,400 billion barrels! Compare this with the figure of, say, 24 billion barrels annually that the world was producing in 2003. Do the figures rip away sensibilities of any prophesy that the world will run out of oil? Straightforward no-brainer logic clearly shows why auto companies should simply focus on creating cars that simply give more miles per gallon as oil would never run out or be in limited supply even in the distant future! But stupid is what stupid gets. And auto companies need hype and glory before death and immortality!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
The no-brainer auto issue #4
That’s the one to do with oil. The fact is, despite all doomsday predictions of major global auto firms betting on alternative fuel, oil reserves don’t seem to be ever running out in the near future, and that means for the next hundred years at least. Look at OPEC’s latest reports, which estimate that between the years 1995-2003, because of newer extraction techniques, new discoveries had actually improved recoveries by almost 138 billion barrels. By 2020, oil production will cross a smashing 1,600 billion barrels annually with reserves close to 3,400 billion barrels! Compare this with the figure of, say, 24 billion barrels annually that the world was producing in 2003. Do the figures rip away sensibilities of any prophesy that the world will run out of oil? Straightforward no-brainer logic clearly shows why auto companies should simply focus on creating cars that simply give more miles per gallon as oil would never run out or be in limited supply even in the distant future! But stupid is what stupid gets. And auto companies need hype and glory before death and immortality!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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