Leading European Institute warns for oil price surge to $200
One of Europe's leading economic institutes, the Deutsches Institute für Wirtschaftsforschung (DIW), warns that the price of oil could rise to $150 per barrel in five years and $200 in 10 years. Wednesday's record oil price of $100 per barrel of crude marks this long-term upward trend, no longer merely fueled by speculation but by the growing incapacity of suppliers to meet demand.
If they materialise, the scenarios could have dramatic consequences on economic development in energy intensive economies in the developing world as well as on transition economies. On the other hand, they would make the mass production of biofuels and coal based synfuels inevitable.
The DIW's prognoses have sparked controversy in Europe, but the institute defends its position, saying sound projections are key to energy policy makers:
In 2007 the price of oil jumped 57 percent due to the weak dollar, worries about oil reserves and world political turbulence, said Kemfert:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: petroleum :: oil :: depletion :: peak oil :: energy security :: Germany :: EU ::
The DIW and other experts don’t expect the oil market to calm down anytime soon. “We find it difficult to contemplate any scenario which doesn’t see annual average prices going steadily higher,” commented Kevin Norrish, an analyst at Barclays Capital.
The immediate cause for this week’s rise in oil prices was a US Energy Information Administration report due out Thursday. It is expected to show a drop in US crude inventories, which would be the seventh consecutive weekly decline. Violence in Nigeria and port closures in Mexico resulting from bad weather likewise have oil traders nervous.
The German Institute for Economic Research is one of the EU's leading research institutes. It is an independent, non-profit academic institution which is involved in basic research and policy advice. DIW Berlin was originally founded in 1925 as the Institute for Business Cycle Research and was later renamed to German Institute for Economic Research.
References:
Deutsches Institute für Wirtschaftsforschung: Energiepreise: 200 Dollar fürs Öl? DIW Berlin empfiehlt mehr Nüchternheit in der Debatte - January 7, 2007.
Der Spiegel: Oil Price Could Hit $200, Says German Institute - January 7, 2007.
Article continues
If they materialise, the scenarios could have dramatic consequences on economic development in energy intensive economies in the developing world as well as on transition economies. On the other hand, they would make the mass production of biofuels and coal based synfuels inevitable.
The DIW's prognoses have sparked controversy in Europe, but the institute defends its position, saying sound projections are key to energy policy makers:
It is the task of economists to analyse medium-term trends in energy prices. [Our] scenarios are plausible and based on sound economic research. This is not about the magic of single numbers for future oil and gas prices. What really matters is whether German and European energy policy has designed preparedness plans to deal with the eventuality of very high energy prices. - DIW spokesperson Carel MohnThe DIW's chief for the department of Energy, Transport and Environment, Professor Claudia Kemfert, further clarified the rationale behind the projections:
Scenarios covering 15 to 20 years are what they are: scenarios that could materialize, but that are meant not to do so, because they allow policy makers to develop counter-measures. Oil is not scarce yet, but will become so, because of rapidly growing demand of booming transition economies. Without a 'Moving away from Oil'-strategy, economies and societies will be too vulnerable to supply disruptions and high prices.Professor Kemfert adds that the most recent surge in oil prices which drove the price to records was due to speculative buying. The share of the oil price attributable to speculation is likely to be around 20 percent today, adding that the price was likely to reach $105 in the coming weeks. But speculation will soon make way for the reality of the growing incapacity of suppliers to physically meet demand. The effects of a possible peak in oil production - signalling the irreversible end to the oil era - could begin to be felt as early as 2020.
In 2007 the price of oil jumped 57 percent due to the weak dollar, worries about oil reserves and world political turbulence, said Kemfert:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: petroleum :: oil :: depletion :: peak oil :: energy security :: Germany :: EU ::
The DIW and other experts don’t expect the oil market to calm down anytime soon. “We find it difficult to contemplate any scenario which doesn’t see annual average prices going steadily higher,” commented Kevin Norrish, an analyst at Barclays Capital.
The immediate cause for this week’s rise in oil prices was a US Energy Information Administration report due out Thursday. It is expected to show a drop in US crude inventories, which would be the seventh consecutive weekly decline. Violence in Nigeria and port closures in Mexico resulting from bad weather likewise have oil traders nervous.
The German Institute for Economic Research is one of the EU's leading research institutes. It is an independent, non-profit academic institution which is involved in basic research and policy advice. DIW Berlin was originally founded in 1925 as the Institute for Business Cycle Research and was later renamed to German Institute for Economic Research.
References:
Deutsches Institute für Wirtschaftsforschung: Energiepreise: 200 Dollar fürs Öl? DIW Berlin empfiehlt mehr Nüchternheit in der Debatte - January 7, 2007.
Der Spiegel: Oil Price Could Hit $200, Says German Institute - January 7, 2007.
Article continues
Monday, January 07, 2008
Futurist and space visionary Zubrin calls for a bioeconomy
World-renowned space engineer, futurist and father of the Mars Society, Dr Robert Zubrin has published a new book titled Energy Victory: Winning the War on Terror by Breaking Free of Oil. The man who developed and popularised the idea of 'terraforming' Mars to make it habitable for humans, now takes a political turn with a synthetic vision on what to do here on Earth to make our planet more liveable.
In Energy Victory, the futurist presents a grand and elegant case for the development of a bioeconomy: utilizing photosynthesis and plants' fascinating capacity to work like factories that produce valuable green chemicals and copious amounts of efficient and clean energy.
Interestingly, Zubrin thinks such a bioeconomy could greatly benefit developing countries, and allows them to leapfrog from a fossil based economy straight into a clean and perpetually renewable 'carbohydrate economy' - itself an old sci-fi concept that is now becoming a reality (see Section 8 in the video 'New Fuels Can Help Third World Economies', click 'open tools'). In fact, Zubrin makes a case for a kind of a 'Biopact' of sorts: instead of thinking in mere terms of energy independence, he talks about a much more realistic scenario of global green energy interdependence - we obviously consider him an ally.
Moreover, the scientist is one of the few people who point to the grim fact that oil's nine-fold price increase since 1999 is 'an extremely regressive tax on the world's poor' and has 'devastating' consequences on their economies. In fact, the oil price rises could already have 'killed millions' of people in poor countries (because they drain states' financial capacities to provide the most basic of services such as poverty alleviation, health care or education; they derail agriculture, food production, trade, business; they generalize inflation and lead to excessive unemployment, cause resource conflicts and wars, and so on). This alone should prompt world leaders to encourage a switch to biofuels in these countries, he thinks.
With martian vigor, Zubrin attacks OPEC, terrorism and the fossil fuel industry, which he defines as 'enemies' that must and can be defeated by renewables. Beyond this harsh rhetoric, Zubrin's vision is refreshingly optimistic, comprehensive and goes beyond the short-term thinking so prevalent in the current debate about bioenergy. But that's only logical for the man who has thought deeply about the science, the technologies and the politics of making planets habitable.
More information, video and a discussion forum, here: Fora TV: Robert Zubrin: Energy Victory.
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: methanol :: energy security :: futurism :: terraforming :: biology :: biotechnology :: bioeconomy ::
Article continues
posted by Biopact team at 4:38 PM 1 comments links to this post