Energy
gazing fuels Davos gloom
By Marc Braibant
AFP
DAVOS, Switzerland
Petroleumworld.com 01 30 06
As oil prices resumed their upward march, and Europe grappled
with gas supply problems at the height of winter, experts and
officials at the World Economic Forum warned there is little to
guard against an acute energy crisis.
Ed Markey, a Democrat congressman from the US state of Massachussetts
underlined that the world was vulnerable on two fronts.
One the one hand there are economic causes, principally the booming
economies of the world's two most populous nations, China and
India, which are swallowing up raw materials including oil.
But a crisis could also be triggered by chokepoints caused by
geopolitical tensions, such as terror attacks on the oil industry
in producing countries or on refineries or storage capacity in
industrialised nations, Markey said in the Swiss mountain resort
of Davos.
With Iran also demanding that OPEC pare down output, corporate
chiefs heard that the days of cheap and abundant energy appear
to be over.
"We have lived in the most developed countries with overcapacity
and now we are short of capacity everywhere," said Claude
Mandil, executive director of the International Energy Agency
(IEA).
The United States is held up as the shining example of the problem,
after refineries were shut down and the industry "deliberately"
ran down investment, according to Markey.
Yet, construction costs for new oil infrastructure are huge. Even
with oil at more than double the price it was a year ago and oil
companies reaping record profits the petroleum industry is still
reluctant to rebuild.
Some experts believe the acute crisis scenario could be triggered
simply by economic problems.
"That's what we have almost seen with China and India's demand,"
said Edmund Daukoru, Nigeria's oil minister and the current president
of the Organisation of Petroleum Exporting Countries.
Tensions between Russia and neighbours Ukraine and Georgia over
Russian gas supplies also illustrate the uneasy relationship between
consumers and producers.
"I do not see Russia as a threat. I see Russia as an opportunity.
They have also understood from mistakes they made at the beginning
of the year," said European Union energy commissioner Andre
Piebalgs.
However, he cautioned that what Georgia "should take into
account is that prices will go up. You cannot expect that Russia
will keep prices at this (low) level."
"We should expect that Russia would like to get more money
for the commodities that it sells. But Russia should understand
that you cannot expect that your customer will immediately pay
the price you demand."
The IEA, which largely represents the interest of consuming nations,
and OPEC emphasised that they were in permanent dialogue.
"It's not a problem of new organisations. The problem is
the energy agenda," which is growing, Mandil said.
The political response is widely regarded as vague. Daukoru called
on politicians to focus on investment, technology and know-how.
Mandil, meanwhile, preferred to focus on long term policies to
ensure the perennial nature of energy supplies, including turning
to nuclear power.
In the short term, he advocated energy efficiency -- or fuel saving
measures -- because they could be implemented swiftly and simply.
AFP
01/29/06
Copyright
© 2006 AFP. All rights reserved
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