Investment plans could be curbed
May 10, 2007 04:30 AM
BRUSSELS–Increased use of biofuels and other measures that steer
consumers away from oil could prompt OPEC to rethink its investment
plans, an official from the crude producer group said yesterday.
The European Union and nations around the world are looking at biofuels,
made from plant and animal matter, to boost energy security, reduce
greenhouse gas emissions and open new markets for farmers.
"We have great concerns about this ... about policies which discriminate
against oil," Fuad Siala, alternative energy sources analyst at the
Organization of the Petroleum Exporting Countries, said at a Hart energy
conference in Brussels. "We have legitimate concerns to revisit our
Though Siala said biofuels are not necessarily a big competitor for
crude oil, OPEC is worried they could replace a significant portion of
its projected output in coming years.
"In 2030 our projections say that OPEC will be called upon to produce
about 49 million barrels (of oil) per day," he said. "By that time if
biofuels are able to supply 5 million barrels per day, that's 10 per
cent of the quota on OPEC oil. That is significant."
The 27-nation EU has set a binding target for biofuels to make up 10 per
cent of vehicle fuels by 2020.
Siala said there are more "downside risks" than "upside potential" for
oil demand despite rapid industrialization in emerging countries such as
India and China.
"Security of supply and security of demand are two sides of the same
coin. Without the confidence that demand will emerge, the incentive to
undertake upstream investments can be reduced."
OPEC produces about one-third of the world's oil.
REUTERS news agency