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Home / Bioethanol / News Dawn of the renewable energy era?
G Panicker
THE US invasion of Iraq was always associated with oil, whatever the official spin. It was seen as a war to remove a threat to the smooth flow of oil to the world markets. Washington had also noted that Iraq was rich in untapped oil resources. It says something about the US occupation of that country, which is 95 per cent dependent on oil revenues, that it now produces far less oil than under Saddam Hussein. Worse, there is also little likelihood of a much-awaited oil exploration law that might have given big oil companies a chance to exploit Iraqi oilfields. No wonder, then, that more and more US lawmakers are questioning US President George WBush's Iraq policy, and want the troops home now — or at least a time frame set for their pullout. Assuming that at some point in the near future the United States will get out, the region will be left to its own devices. Hopes of a Middle East peace rise as Arab foreign ministers say they will visit Israel soon for the first time. But how well the oil-producing states get along with the others in the region is also a matter of concern. The Middle East fuels the world and it is difficult to separate oil from its politics, which then gets reflected in the price of oil. Will there be a power vacuum in the region after the US pulls out? Who will fill that gap? After all, for a long time, it was a British playground — before the lure of oil and Cold War politics drew Washington into the region. And, more importantly, what will happen to Gulf oil supplies? Will the West turn away from Middle East oil? Sub-Saharan Africa now meets 18per cent of US imports from 7 per cent in 1993. The Gulf's share is down 4 per cent to 21 per cent. Further, the United Nations says that the pace of development of alternatives has gained so much momentum that there is a chance the West will require less oil in the future. Improving technology can further aid energy efficiency as the new Boeing 787 Dreamliner aircraft demonstrates cutting fuel consumption by 20 per cent. The US Congress is also pushing for higher mileage from vehicles in the future. Then there is growing 'resource nationalism' that could also motivate the shift away from oil. Already in the Middle East, state companies control oil and gas resources. Venezuela and Russia are now forcing foreign oil companies to cede control of their energy assets, which the companies got when oil prices fell. Oil giant BP lost some of its gas reserves in Russia last month following Shell's capitulation earlier. Venezuelan President Hugo Chavez has cut foreign oil companies' stake in the Orinoco River basin heavy oil reserves. These countries want oil companies to be the junior partners in their oil extraction industries. Exxon and ConocoPhilips have opted to leave the Orinoco project. But oil-producing nations should also bear in mind that oil majors have been a powerful voice behind oil in Washington. If their access to reserves is severely restricted, the oil majors themselves may prefer to look at alternative sources. Their present marginal investment in sources such as solar, wind and biodiesel is just a means to lay claim to being 'green' in the marketplace. But they have the resources at their disposal to fund research and development and promote non-oil energy projects on a large scale. Perhaps they are waiting to see a tipping point before they focus on new energy. There have been some developments which may indicate which way the wind is blowing. Last month, BP announced two biofuel ventures immediately around the time it was forced to scale down role in two Russian gas projects. It floated a joint venture with London's Alternative Investment Market-listed D1 Oils to speed up planting of jatropha curcas — drought-resistant inedible oilseed- bearing trees in Asia and Africa. It hopes to make biodiesel feedstock on 1.7 million hectares to begin with, and to produce two million tonnes of jatropha oil eventually. In the same week, BP along with chemicals producer DuPont and Associated Foods announced a plan to spend US$400 million to build a bioethanol plant. It intends to produce second-generation biobutanol fuel when technology is available. Companies the world over are jostling to figure out a competitive alternative to crude oil as demand for renewable energy jumps. Last weekend's Live Earth global concert was a display of the kind of grassroots support the environmental cause is getting. Can corporations and governments ignore it? More interesting, however, will be what happens if the US and Europe reduce their consumption of oil. Global politics will change dramatically once rich country farmers see the potential of biofuels and get governments to back them with incentives. A joint venture of Van Der Horst Biodiesel and the Institute of Environmental Science and Engineering proposes to use jatropha nuts for biofuel production and hopes to make Singapore a big player in the region. Such is the push that the OECD says biofuel will have a major impact on agriculture in the next 10 years. 'King' coal fuelled the Industrial Revolution in Britain which enabled the country to dominate the world until World WarII. Abundance of internal sources of oil energised America's rise as a world power in its place in the second half of the 20th century. The convergence of World WarI and the advent of oil-powered ships, a great shortage of coal and the arrival of motor cars all around the same time catapulted versatile and cheap oil to dominance in the global economy and eventual prominence of the Middle East. Now we have a new confluence of circumstances — unprecedented oil demand from the emerging markets, and rising worries about climate change and about dependence on crude oil and its availability. Could this signal the dawn of the renewable energy era?
Date: 13.07.2007 Comments:Leave your comment
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At last, someone comes up with the "right" ansewr!
At last, someone comes up with the "right" ansewr!, 09.06.2011 03:06:44