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    Mongabay, a leading resource for news and perspectives on environmental and conservation issues related to the tropics, has launched Tropical Conservation Science - a new, open access academic e-journal. It will cover a wide variety of scientific and social studies on tropical ecosystems, their biodiversity and the threats posed to them. Tropical Conservation Science - March 8, 2008.

    At the 148th Meeting of the OPEC Conference, the oil exporting cartel decided to leave its production level unchanged, sending crude prices spiralling to new records (above $104). OPEC "observed that the market is well-supplied, with current commercial oil stocks standing above their five-year average. The Conference further noted, with concern, that the current price environment does not reflect market fundamentals, as crude oil prices are being strongly influenced by the weakness in the US dollar, rising inflation and significant flow of funds into the commodities market." OPEC - March 5, 2008.

    Kyushu University (Japan) is establishing what it says will be the world’s first graduate program in hydrogen energy technologies. The new master’s program for hydrogen engineering is to be offered at the university’s new Ito campus in Fukuoka Prefecture. Lectures will cover such topics as hydrogen energy and developing the fuel cells needed to convert hydrogen into heat or electricity. Of all the renewable pathways to produce hydrogen, bio-hydrogen based on the gasification of biomass is by far both the most efficient, cost-effective and cleanest. Fuel Cell Works - March 3, 2008.

    An entrepreneur in Ivory Coast has developed a project to establish a network of Miscanthus giganteus farms aimed at producing biomass for use in power generation. In a first phase, the goal is to grow the crop on 200 hectares, after which expansion will start. The project is in an advanced stage, but the entrepreneur still seeks partners and investors. The plantation is to be located in an agro-ecological zone qualified as highly suitable for the grass species. Contact us - March 3, 2008.

    A 7.1MW biomass power plant to be built on the Haiwaiian island of Kaua‘i has received approval from the local Planning Commission. The plant, owned and operated by Green Energy Hawaii, will use albizia trees, a hardy species that grows in poor soil on rainfall alone. The renewable power plant will meet 10 percent of the island's energy needs. Kauai World - February 27, 2008.

    Tasmania's first specialty biodiesel plant has been approved, to start operating as early as July. The Macquarie Oil Company will spend half a million dollars on a specially designed facility in Cressy, in Tasmania's Northern Midlands. The plant will produce more than five million litres of fuel each year for the transport and marine industries. A unique blend of feed stock, including poppy seed, is expected to make it more viable than most operations. ABC Rural - February 25, 2008.

    The 16th European Biomass Conference & Exhibition - From Research to Industry and Markets - will be held from 2nd to 6th June 2008, at the Convention and Exhibition Centre of FeriaValencia, Spain. Early bird fee registration ends 18th April 2008. European Biomass Conference & Exhibition - February 22, 2008.

    'Obesity Facts' – a new multidisciplinary journal for research and therapy published by Karger – was launched today as the official journal of the European Association for the Study of Obesity. The journal publishes articles covering all aspects of obesity, in particular epidemiology, etiology and pathogenesis, treatment, and the prevention of adiposity. As obesity is related to many disease processes, the journal is also dedicated to all topics pertaining to comorbidity and covers psychological and sociocultural aspects as well as influences of nutrition and exercise on body weight. Obesity is one of the world's most pressing health issues, expected to affect 700 million people by 2015. AlphaGalileo - February 21, 2008.

    A bioethanol plant with a capacity of 150 thousand tons per annum is to be constructed in Kuybishev, in the Novosibirsk region. Construction is to begin in 2009 with investments into the project estimated at €200 million. A 'wet' method of production will be used to make, in addition to bioethanol, gluten, fodder yeast and carbon dioxide for industrial use. The complex was developed by the Solev consulting company. FIS: Siberia - February 19, 2008.

    Sarnia-Lambton lands a $15million federal grant for biofuel innovation at the Western Ontario Research and Development Park. The funds come on top of a $10 million provincial grant. The "Bioindustrial Innovation Centre" project competed successfully against 110 other proposals for new research money. London Free Press - February 18, 2008.

    An organisation that has established a large Pongamia pinnata plantation on barren land owned by small & marginal farmers in Andhra Pradesh, India is looking for a biogas and CHP consultant to help research the use of de-oiled cake for the production of biogas. The organisation plans to set up a biogas plant of 20,000 cubic meter capacity and wants to use it for power generation. Contact us - February 15, 2008.

    The Andersons, Inc. and Marathon Oil Corporation today jointly announced ethanol production has begun at their 110-million gallon ethanol plant located in Greenville, Ohio. Along with the 110 million gallons of ethanol, the plant annually will produce 350,000 tons of distillers dried grains, an animal feed ingredient. Marathon Oil - February 14, 2008.

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Wednesday, May 07, 2008

Oil price 'may hit $200' - developing countries face collapse

Oil prices have risen 25% in the last four months and by an incredible 400% from 2001. Goldman Sachs energy strategist Argun Murti now warns that all parameters point to the occurence of a 'super-spike' past $200 in six months to two years' time. He joins OPEC's very own chief, who recently uttered the same frightening words.

Murti correctly predicted three years ago - when oil was about $55 a barrel - that it would pass $100, which it reached for the first time in January of this year.

Current oil prices - benchmark US light crude passing the $122 mark for the first time on Tuesday - are having destructive effects on all productive economic sectors of the oil importing least developed countries (LDCs). Of the 47 poorest countries in the world, 38 are net importers of oil, and 25 are fully dependent on imports.

Back when oil stood at a 'very low' $60, the United Nations already warned for the 'devastating' effects (previous post):
Recent oil price increases have had devastating effects on many of the world's poor countries, some of which now spend as much as six times as much on fuel as they do on health. Others spend twice the money on fuel as they do on poverty alleviation. And in still others, the foreign exchange drain from higher oil prices is five times the gain from recent debt relief.
Each dollar increase in the price of oil directly affects LDCs' capacity to provide health care, education, and basic public and social services to their people. Agriculture, the mainstay of most of these economies, is badly hit and farmers can be thrown back into subsistence farming and hunger when oil hits a treshold that makes agricultural production and marketing difficult. All other productive sectors of LDC-economies depend on affordable fuels.

The African Development Bank, writing with a 'high' oil price of $70 per barrel in mind, added some other depressing micro- and macro-economic prospects for African economies:
  • the risk of hyper-inflation, including steep increases in the price of food and basic staples; significant increases in real interest rates; the incapacity to introduce non-inflationary monetary policies
  • declining domestic and foreign investment
  • increasing unemployment, with the poor hit first and hardest
  • decreased capacity to trade, as foreign currency pools dry up
  • the destruction of the effect of debt relief efforts
  • the erosion of the state budget, both at the revenue and the expenditure side; revenues decline as the profitability of businesses decreases
Oil at $60-70 per barrel (let alone at today's price of $120) has catastrophic consequences for poor countries. But what would happen with oil at $200? At that level, development as such in LDCs would simply grind to a halt with the formal economy risking outright collapse. Civil strife and state collapse are likely in countries with weak institutions.

So what can poor countries do? Not much, because the problem is that there are no feasible alternatives to liquid fuel products, and that demand for these fuels is price inelastic. Highly developed countries can often consume a bit less or draw on strategic reserves, but the energy intensive countries of the poor South do not have this capacity. They can invest in biofuels - and most of these countries have a very large potential to produce them in a sustainable and highly competitive manner - but projects may take years to come online.

The recent food riots, already the result of record oil prices (and much less the result of biofuels) might just be a prelude to what's to come. Maybe the doom-scenarios sketched so often by 'Peak Oil' analysts will begin to play out after all. And they will hit the poorest countries first.
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