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| EU reassures OPEC that renewables won't reduce demand for 'dinodiesel' |
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| Monday, 12 June 2006 | |
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Brussel, June 9 2006 - The European Commission has reassured the OPEC oil-producing countries that increased use of biodiesel and the growing numbers of wind turbines and nuclear plants in Europe won't affect overall European demand for OPEC's oil exports.
In bi-lateral meetings, OPEC members have apparently expressed their concern that the demand for oil will fall over the next few years as a result of these initiatives. 'Our response is that the demand for oil continues to rise, even though we are using more alternative energy sources', says the EU's current chairman, Austrian Minister Martin Bartenstein, at a press conference in Brussels after the third EU-OPEC meeting.
Editoral comment: OPEC's concern that alternative energy initiatives may affect their economic well-being is evident not just through diplomatic channels. The Kingdom of Saudi Arabia is seeking to become a major player in the biofuel market through financing of, and investment in, biofuel joint ventures across the EU. At a recent EU-sponsored symposium in Germany a Saudi investment vehicle representative sought proposals for biofuels joint ventures requiring finance of "between US $5 million and $100 million". Attendees at the symposiom included entrepreneurs, regional development authorities and established firms.
It seems clear that, despite BP's Chairman Lord Brown's comments yesterday in Shanghai that in 10 years oil may be back at $30/barrel, for the time being $70/barrel is here to stay (unless there is war with Iran, in which case $70 will seem cheap). And while oil is above $70, there may be more money chasing biofuel projects than there are projects to fund.
David Smith, Singapore
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