OPEC says Bio-fuels Could Push Oil Prices Up

The head of the OPEC oil cartel just said that investing in biofuels could push oil prices “through the roof,” the UK’s Financial Times reported yesterday. OPEC secretary general Abdalla El-Badri had the nerve to say that moves to use biofuels would make his members consider cutting investment in oil production.

Even US Oil Tycoon Texas Cowboy/President Bush says the US will aim to cut its petrol use by 20 per cent in the next ten years, partly through increased use of biofuels. Opec members control about 40 per cent of the world’s oil production. El-Badri said that while OPEC members had so far maintained their investment plans, he added: “If we are unable to see a security of demand we may revisit investment in the long term.”

This warning comes as leaders of the G8 industrialized nations gather for their summit in Germany. Environmental issues are high on the agenda and the use of biofuels is central to the attempts of many G8 countries to cut their carbon emissions. Biofuels can be anything made with vegetable matter that burns.

The US is not the only nation that depends on Opecs oil, Gabrielle Reilly at Gift of Gab brings up that China alone is reshaping the global oil relationships in and of itself. This year China has become the second largest user of oil outside of the US surpassing Japan. As China’s economy grows and technology improves, the Chinese are setting aside their bikes for cars. Although it may still be two decades before many of the peasants laboring in the manufacturing sectors become consumers, with a population of well over 1 billion people, it would only take a small percentage of the population to consume as much as the U.S. does. Will this bring China into closer relations with the Middle East in preference to the U.S.? Only time will give us the sure answer to that question.

So OPEC is feeling the pressure? Let’s see how they act when their is actual competition on the field. In my opinion, if the Americans paid what Europeans pay at the pumps for gasoline, they would drive less and be looking for way more alternative fuels and modes of transportation. Pushing the envelope further towards bio fuels, maybe even passing positive laws to help enforce them.

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