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Oil producers ready for
battle
By Mario Osava
RIO DE
JANEIRO - The looming threat of war in Iraq and the less
perilous pressures from the environmental movement did
not stand in the way of optimism on Thursday, the final
day of the 17th World Petroleum Congress in Brazil.
Demand for petroleum will grow an average of 1.9
percent annually until 2020, when this fuel will still
make up 40 percent of the global energy matrix, said
Jean-Paul Vettier, chief of oil refining and marketing
for the French consortium TotalFinalElf, citing
projections made by the International Energy Agency
(IEA).
World consumption would thus rise from
the current 76 million barrels of petroleum daily to
nearly 120 million in 2020, calculates Ali Rodriguez,
president of Petroleos de Venezuela SA, one of the
largest companies in Latin America.
These
forecasts have been strengthened by the World Summit on
Sustainable Development, which ended Wednesday in the
South African city of Johannesburg. After 10 days of
negotiations, few concrete initiatives were agreed by
the 190 countries in attendance.
At the Johannesburg
summit, failure was the fate of Brazil's proposal to set
a target of 10 percent renewable sources for all energy
consumed worldwide by 2010. The rejection of the
Brazilian initiative marked a clear victory for the
petroleum industry and for oil-producing countries,
which actively opposed the measure, alongside the United
States. This outcome suggests that changes in energy
production to "cleaner" renewable sources will be slower
than what the environmentalists had hoped for.
Activists and some Latin American and European
governments left Johannesburg frustrated that no
concrete targets were set that would help curb the
greenhouse effect caused by the accumulation in the
atmosphere of carbon dioxide and other gases emitted
when fossil fuels are burned.
Nevertheless, the
demand for petroleum is increasing at a slower pace than
in the previous period, from the oil crisis of 1973 to
2000, when annual growth reached 2.2 percent, according
to the IEA.
Meanwhile, renewable energy sources
- wind, solar, ocean waves - should see a more
accelerated increase, of 4 percent annually, followed by
natural gas, with 2.7 percent. The problem, say
environmentalists, is that even with rapid expansion of
clean energy production, it does little to combat
climate change because they represent just 2.2 percent
of the world's energy consumption today.
The
question weighing heavily on the 17th World Petroleum
Congress, which took place in Rio de Janeiro Sunday
through Thursday, was the possibility of a US-led attack
against Iraq. International oil prices have been
fluctuating a great deal in recent days, depending on
whether the news indicates imminent military moves
against the oil-producing Arab nation.
On
Wednesday, for example, a hardline speech by US
President George W Bush caused a two-percent price
increase, with the benchmark North Sea Brent crude
reaching $27.10 per barrel in London.
Former
Saudi Oil Minister Sheikh Zaki Yamani predicted worse to
come if the US invaded Iraq, with the price of oil
rocketing to $100 per barrel if Saddam is able to shut
down Gulf oil fields. "In my opinion, attacking Iraq
could be like playing with fire," Yamani said. "One of
the scenarios, and I don't know if it is a valid
scenario or not, is that the man has some biological
weapons and chemical weapons and this is what the
British and others are trying to assure us. If worse
comes to worse, what prevents him from firing these
weapons at neighboring countries down in the south,
Kuwait and Saudi Arabia? Hundreds of thousands of people
will die and oil operations will stop for some time."
Rilwanu Luckman, the Nigerian-born president of
OPEC (Organization of Petroleum Exporting Countries),
said, however, that a conflict in Iraq would not cause
an explosion of oil prices. Iraq's crude exports would
quickly be replaced, he assured.
The OPEC
members - Algeria, Indonesia, Iran, Iraq, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, United Arab Emirates and
Venezuela - maintain a daily output of 21.7 million
barrels of crude. The 11-member cartel could expand its
output by seven million barrels daily, with a million
from his country alone, said Luckman.
The
president of Saudi Aramco, Abdallah Jum'ah, meanwhile
promised that his company could step up production from
seven to 10 million barrels a day. Venezuela would add
1.5 million barrels to its current daily output of 2.5
million, said Rafael Ramirez, energy minister for the
only Latin American member of OPEC. The intention
expressed by these industry leaders is to prevent a
dramatic price rise and not take advantage of the
potential US-Iraq conflict to boost profits or use
petroleum as a political weapon. The ideal price is an
average of $25 a barrel, says the president of OPEC,
whose members hold three-quarters of the world's known
petroleum reserves and 40 percent of all production.
Meanwhile, environmental and social problems
have become a new concern of the petroleum industry. A
seminar on social responsibility that took place
parallel to the World Petroleum Congress drew oil
executives, environmentalists and other experts. The oil
companies were doomed and must "face their death with
dignity", stated Brazilian singer-songwriter Gilberto
Gil, speaking as head of the Fundacao Onda Azul (Blue
Wave), a non-governmental organization active in
defending the environment.
Petroleum "is not a
clean energy source, nor is it sustainable, and the next
World Petroleum Congress must focus its debate on
renewable sources and the transition to a new energy
panorama," stated Benedict Southworth, coordinator of
the climate campaign for Greenpeace International.
"The transition has already begun," responded
Irani Varella, director of services at the Brazilian
state-run oil giant, Petrobras, pointing out that his
company was no longer dedicated exclusively to crude,
but had become an energy enterprise, with investments in
renewable sources such as wind and biomass. Petrobras
was willing to work with environmental groups in the
search for solutions to the contamination caused by
fossil fuels, but, said Varella, doing so "requires
mutual respect".
(Inter Press Service)
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