Post by swi66 on Jun 6, 2007 5:23:28 GMT -5
Just absolutely any reason to drive up the price!
I can see this happening.............
Drive on biofuels risks oil price surge
By Javier Blas and Ed Crooks in London
Published: June 5 2007 15:24 | Last updated: June 5 2007 22:15
Opec on Tuesday warned western countries that their efforts to develop biofuels as an alternative energy source to combat climate change risked driving the price of oil "through the roof".
Abdalla El-Badri, secretary-general of the Organisation of the Petroleum Exporting Countries, said the powerful cartel was considering cutting its investment in new oil production in response to moves by the developed world to use more biofuels.
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The warning from Opec, which controls about 40 per cent of global oil production, comes as the group of eight leading industrialised nations meets on Wednesday with climate change at the top of its agenda. The US and Europe want to use biofuels to combat global warming and to strengthen energy security.
Opec has previously expressed scepticism about alternative energy but Mr El-Badri's comments mark the first clear threat that the cartel might act to safeguard its interests in the face of a shift towards biofuels.
"They are really concerned," said Julian Lee of the Centre for Global Energy Studies in London. "Opec will continue investing, but with biofuels on the horizon, they may not invest enough."
"It is a difficult situation for Opec. On one hand they are asked to produce more, on the other one, Washington and Brussels are telling the cartel 'we are betting on biofuels and we don't want to rely on you [Opec]'."
George W.Bush, the US president, has pledged to cut US petrol use by 20 per cent over the next 10 years through more efficient vehicles and a big increase in biofuel consumption. World production of biofuels, which are derived from agricultural commodities such as corn and sugar, was equal to 1 per cent of all road transport fuel in 2005.
Mr El-Badri warned that biofuel production could prove unsustainable in the medium term as it competed with food supplies. Biofuels are one reason retail food prices are now heading for their biggest annual increase in about 30 years.
Mr El-Badri said this meant the biofuel strategy championed by Mr Bush and European leaders would backfire because "you don't get the incremental oil and you don't get the ethanol". In this case, he warned, oil prices would go "through the roof".
He said Opec members had so far maintained their investment plans but he warned: "If we are unable to see a security of demand...we may revisit investment in the long-term."
Opec plans to invest about $130bn until 2012 to raise its oil output. Excluding production from Iraq, the cartel forecasts a capacity of 39.7m barrels of crude oil per day in 2010, up from today's 35.7m b/d. From
2013 to 2020 Opec plans to invest another $500bn in production infrastructure but that could change depending on the biofuels outlook, Mr El-Badri said.
Global oil benchmark Brent rose on Tuesday to $70.60 a barrel, close to a nine-month high.
Copyright The Financial Times Limited 2007
I can see this happening.............
Drive on biofuels risks oil price surge
By Javier Blas and Ed Crooks in London
Published: June 5 2007 15:24 | Last updated: June 5 2007 22:15
Opec on Tuesday warned western countries that their efforts to develop biofuels as an alternative energy source to combat climate change risked driving the price of oil "through the roof".
Abdalla El-Badri, secretary-general of the Organisation of the Petroleum Exporting Countries, said the powerful cartel was considering cutting its investment in new oil production in response to moves by the developed world to use more biofuels.
ADVERTISEMENT
The warning from Opec, which controls about 40 per cent of global oil production, comes as the group of eight leading industrialised nations meets on Wednesday with climate change at the top of its agenda. The US and Europe want to use biofuels to combat global warming and to strengthen energy security.
Opec has previously expressed scepticism about alternative energy but Mr El-Badri's comments mark the first clear threat that the cartel might act to safeguard its interests in the face of a shift towards biofuels.
"They are really concerned," said Julian Lee of the Centre for Global Energy Studies in London. "Opec will continue investing, but with biofuels on the horizon, they may not invest enough."
"It is a difficult situation for Opec. On one hand they are asked to produce more, on the other one, Washington and Brussels are telling the cartel 'we are betting on biofuels and we don't want to rely on you [Opec]'."
George W.Bush, the US president, has pledged to cut US petrol use by 20 per cent over the next 10 years through more efficient vehicles and a big increase in biofuel consumption. World production of biofuels, which are derived from agricultural commodities such as corn and sugar, was equal to 1 per cent of all road transport fuel in 2005.
Mr El-Badri warned that biofuel production could prove unsustainable in the medium term as it competed with food supplies. Biofuels are one reason retail food prices are now heading for their biggest annual increase in about 30 years.
Mr El-Badri said this meant the biofuel strategy championed by Mr Bush and European leaders would backfire because "you don't get the incremental oil and you don't get the ethanol". In this case, he warned, oil prices would go "through the roof".
He said Opec members had so far maintained their investment plans but he warned: "If we are unable to see a security of demand...we may revisit investment in the long-term."
Opec plans to invest about $130bn until 2012 to raise its oil output. Excluding production from Iraq, the cartel forecasts a capacity of 39.7m barrels of crude oil per day in 2010, up from today's 35.7m b/d. From
2013 to 2020 Opec plans to invest another $500bn in production infrastructure but that could change depending on the biofuels outlook, Mr El-Badri said.
Global oil benchmark Brent rose on Tuesday to $70.60 a barrel, close to a nine-month high.
Copyright The Financial Times Limited 2007
