OPEC has 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 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.
The warning from OPEC, which controls about 40 per cent of global oil production, comes as G8, the group of eight leading industrialised nations, meets this week, 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 the one hand, they are asked to produce more. On the other, Washington and Brussels are telling the cartel, 'We are betting on biofuels and we don't want to rely on you'."
OPEC & Its Biofuel Bugaboo
♠ Posted by Emmanuel in Energy
at 6/09/2007 01:06:00 AM
The Organization of the Petroleum Exporting Countries (OPEC) is caught in a quandary according to the Financial Times. On one hand, developed countries are asking the cartel to produce more in the short term. In the long term, however, they want to create biofuels to lessen their reliance on OPEC. Go figure: 