Thailand's Energy Solutions

As the world reaches the half way point of its limited oil reserves, there will be no let up of oil prices as prices past 150, 200, 300 and more. These price increases will have to be factored into everything. Hopefully, wages chasing prices will not spiral out of control like in the 1970's. Oil shock inflation of the 1970's was finally brought under control by the world's gain in energy efficiency according to US Federal Reserve Chairman Ben Bernanke in a recent speech.. Thailand now has a solution and a sustainable energy policy thanks to our far-sighted neighbor Japan.

On the demand and supply side of the energy equation Thailand has made some progress in both short-term and long-term strategies. Alternative energy sources has brought even nuclear energy development back into discussion on the supply side and more investments in public transportation mega-projects, logistics management software development and rail upgrades for the transportation of goods.

On the demand side of the equation energy conservation has been introduced by government to cut air-con usage in public building helping to cut energy bills as air-con usage can cost up to 75% of utility costs. Udon Thani has reported cutting 75% of diesel usage in automobiles by converting to dangerous mobile gas converter kits. The use of such kits will also provide a boom in Thailand's auto producing hub as gas conversion takes a toll on damaging auto engines that must be replaced sooner by consumers by more efficient hybrid auto sales and production.

Being realistic energy related external factors in the supply and demand equation Thailand has no control over. External factors are being negotiated by other countries such as the US in trying to increase supply from oil producing countries and introducing regulations to limit leverage commodity futures speculation from the powers that be's hedge funds and other financial instruments of the powers that be in developed countries. The vote on regulation is still out as global equity markets are down leaving only commodities or T-Bills to park money or value investing selling short equity markets worldwide.

According to US Federal Reserve Chairman Ben Bernanke the world has already reached and past the energy efficiency gains of 4 times which matched the 4 times rise of oil prices gains. The world now has a chance to resume energy efficiency gains thanks to a Godzillian effort made by Japan during the last 30 years. Leaders from Bangkok to Beijing and from around the world are flocking to Hokaido to see Japan's next export wave to save the world once again at the G8 meeting

Japan's solution has resulted in Japan consuming half as much energy per dollar of economic activity as the European Union or the US and one-eighth as much as China and India according to the International Energy Agency in Paris. These results have come about because Japan was the only industrial country that continued government investment in energy research even after oil prices dropped for 30 years. Hisakazu Tsujimoto of the Energy Conservation Center said "Japan taught itself decades ago to compete with gasoline at $4 per gallon." Japan has kept its overall energy consumption unchanged at 200 million tons of oil since the 1970's.
One example, in heavy industries like steel, the Keihin mill on Tokyo Bay captures heat and gases that before had been released into the air or burned off as waste now they are used to power generators that produce 90% of the electricity used by the mill.

After the G8 meeting Thailand will have to recalculate our budget to purchase energy saving technology from Japan. It will not be cheap Japan does not compete on price but on quality. It must be done sooner rather than later.

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