Author: Ben Debski

For many of us, our knowledge of energy begins and ends with the flip of a light switch, or the insertion of a nozzle into our car’s gas tank. Seldom do we stop and contemplate what goes on behind the scenes, and the complex choreography taking place around the globe to deliver energy to our fingertips.

Energy is fundamental to human existence. It is as important as affordable food, clean air and water. Part of the reason we saw energy prices escalate so dramatically in 2007 and half of 2008 is that millions of people in developing nations were being lifted out of subjugation, creating a period of rapidly increasing demand worldwide. This was a good thing as it represented more and more people in India, China and other nations gaining access to energy. And while the demand for energy has slowed during the current economic downturn, the truth is that the world’s increasing demand for energy means securing our nation’s long-term energy future will require all forms of energy, especially oil and natural gas.

According to the US Energy Information Administration (EIA), the world will require 50 percent more energy in 2030 than it did in 2005. Alternatives and renewables will play an increasingly important role in meeting that demand, yet the EIA estimates that those sources will still only account for less than nine percent of the energy produced in 2030, while oil and natural gas will account for just under 60 percent of all energy produced.

There is no way around it for the foreseeable future – our world needs to continue to invest in and develop oil and natural gas resources. Without continued investment in these resources, demand will rapidly outpace supply, resulting in tremendous price escalation for every individual who uses energy.

The truth about climate change
I have spent my career around scientists who study rocks that are millions of years old. Understanding the formation of the rock, depositional characteristics and the climate conditions that existed at the time are critically important to finding oil and natural gas. Looking back through millions of years, there is evidence of ancient time periods where global temperatures were significantly warmer than today and where carbon emissions were significantly higher than today. The science is clear that the planet has undergone numerous periods of heating and cooling prior to the industrial age.

Climate is incredibly complex; however, I suspect that nearly all of us agree that we want clean air and that emissions should be addressed in a practical manner that is environmentally effective and economically responsible. To this end, I strongly believe that science, not politics, should lead the way in driving adoption of renewable energy sources and in developing sound energy policy. The science of our own business continues to evolve and we are applying it to reduce emissions and deliver more resources to the American people.

I am proud of the environmental record of America’s oil and natural gas industry, which invested more than $42bn in new low- and zero-emissions technologies between 2000 and 2006. This amount represents nearly half of the total spent by all US companies and the US federal government combined, and our industry’s investments continue.

One example of this commitment to emissions- reduction technology that my company, Anadarko Petroleum Corporation, is implementing is our enhanced oil recovery, carbon sequestration project at the Salt Creek oil field in Wyoming. Salt Creek is among the largest carbon-sequestration projects in the world. We are injecting carbon dioxide, which would otherwise be vented to the atmosphere, under ground into a 100-year-old oil field. The CO2 is sequestered and creates pressure that improves the production of oil. This project alone currently sequesters enough CO2 each day to offset the equivalent emissions of more than half-a-million automobiles. In addition, Anadarko and other companies like ours are voluntarily partnering with the US Environmental Protection Agency in the Natural Gas STAR programme. Since joining the programme in 1996, Anadarko has achieved cumulative emissions reductions of over 38 billion cubic feet of gas, equivalent to the emissions of 2.8 million cars.

Another important part of reducing emissions is increasing our nation’s usage of natural gas – the cleanest-burning fossil fuel. Anadarko is one of the leading independent producers of natural gas in North America, which includes our massive Independence Hub development in the deepwater Gulf of Mexico. This amazing project broke numerous world records for deepest producing platform, deepest pipeline and deepest sub-sea infrastructure in water depths greater than 8,000 feet. The project is currently producing enough clean∞burning natural gas to meet the energy needs of more than five million average American homes each day. This is accomplished from a single floating structure about half the size of a football field and more than 100 miles offshore, well beyond the view from any beach. Projects like this require billions of dollars of investment, deliver clean-burning American energy, create American jobs and can be replicated as long as our government’s energy policy does not restrict our industry’s ability to do so.

Finally, conservation matters and its importance is often overlooked. All manufacturers, businesses and individuals should be conscientious about the energy we use. We should constantly strive for improved efficiencies and conserve where we can. Using less is a personal choice for many of us, and should be a focus every day.

The truth about energy policy
As I’ve pointed out, oil and natural gas will continue to make up the vast majority of our energy mix for the foreseeable future. Our industry has proven its ability to develop these resources safely while respecting the environment. We’ve also demonstrated our commitment to addressing climate change through the tens of billions of dollars we’ve invested in new technologies aimed at reducing emissions. Politics remains the most significant challenge to securing an energy future consumers can afford. Our citizens deserve a balanced, fact-based energy policy that promotes energy efficiency, conservation and greater supplies of all forms of energy.

Raising taxes, even indirectly, in a time of economic decline is fraught with risk. An example of this is the Obama Administration’s budget proposal that calls for an estimated $400bn in new taxes and fees on the American oil and natural gas industry. This policy will result in higher energy costs for every American by reducing investments in the exploration and production of oil and natural gas. A recent study estimates it will result in the loss of more than 270,000 jobs annually, and will very likely prolong the recession, further stifle job creation and increase America’s reliance on foreign sources of energy. Similar policies have been attempted in the past, and they have failed in dramatic fashion.

There’s a better, more constructive path toward our energy future. It involves opening up access to domestic resources offshore and onshore. Norway, one of the most environmentally sensitive nations in the world, produces its own resources for the good of its people. America has the resources, yet we are one of the only nations in the world that keeps much of our own resources off limits. Opening these areas in the eastern Gulf of Mexico and offshore from the east and west coasts of the United States could generate more than $1.7trn in revenue for the US government – more than four times the amount of the Administration’s current tax proposal. Plus, it could create more than 160,000 new jobs by 2030 and would clearly lower the cost of future energy for consumers while improving our nation’s energy security.

At Anadarko, our mission statement emphasises our commitment to explore for, acquire and develop oil and natural gas resources vital to the world’s health and welfare. I can only hope that the world’s political leaders will share the same commitment to the truth about our energy future.

More information: www.anadarko.com

The brainchild of Masiya Net, Life Energy was founded in 2009 with the chief aim to explore the potential of introducing viable and innovative energy sources to the Gulf region. The company’s tender age may come as a surprise, as it displays a lot more authority than a firm with a mere two years to its name. Despite being a new comer to the industry, Life Energy is one of the fastest growing renewable energy companies on the market today, and it has successfully developed a concept that explores new avenues in the energy sector. Its repertoire is extensive and brings together a cross-section of different components including energy management, solar and wind energy, energy efficiency, hybrid systems and waste to energy services and support.
Focusing specifically on the Gulf-region, the forward∞thinking company aims to provide the area with innovative energy sources that are truly state-of-the-art in style, and even in certain cases, tailor-made to suit the specific needs of each client. Drawing upon the experience and expertise the firm holds, Life Energy is aiming to actively engage in energy saving and energy management activities locally and regionally, as well as on a global scale. International expansion is already underway and the company has pushed for geographical and operational diversity by entering other markets including Africa and the UK.

A route to success
So what’s behind the success and rapid growth of the company? “As one of the integrated solution providers in Kuwait, we believe that our success is ultimately derived from our customer’s success. We partner with our customers to reach their objectives. Also, we believe that our successes and progress are the direct results of our commitment to provide our customers with the product, solution, support, and after sales support,” read a recently published company statement celebrating Life Energy’s second year.

But these quality characteristics haven’t arisen out of nowhere. Crucially, Life Energy put much focus on its management team, and in return, the employees’ faithful dedication is reflected in the company’s notable achievements. In line with the staff-focused approach, staff training is key. Understanding that it’s crucial to establish a high level of expertise in order to offer the best possible advice to customers, Life Energy has invested significantly in training programmes for their technicians and engineers so as to ensure that they’re fit to provide the highest level of professional support to existing and new clients. An integral factor Life Energy also focuses on is the establishment of strategic alliances, locally and internationally. 

Another contributing factor to the multiple successes the company has enjoyed is its pioneering soul and its dedication to supply solutions coupled with a desire to keep developing within the ever- progressing market that spans renewable energy, energy management and the array of green building solutions.

A promising future
By pushing boundaries and offering tailor-made packages to a wide plethora of clients – all with uniquely different needs – Life Energy has achieved a respectable status in Kuwait, the Gulf region and beyond. To boost its reputation further, Life Energy maintains high standards and the businesses success is backed by healthy finances.

Continuing on its winning path, the next few years will see revenue growth and international expansion with continued focus on providing customer satisfaction.

To strengthen its position and to give its competition a run for its money, Life Energy and its partners have an advantage in that they boast sound experience in the areas of implementation and integration. On a local level, Life Energy has formed strategic alliances with unique partners in the field such as National Technology Enterprises Company (NTEC), a technology projects development company with a mission to lead in the development and application of leading edge technology, and ENMAA, a leading integrated real estate services company in Kuwait. On an international level, Life Energy has established partnerships with leading companies such as: Heliocentris, P21, Solyndra, Brisban, Zephyr, Eltek Valere and HEI Solar Light, leaders in the renewable power and energy conservation fields.

The company’s experience is multi-faceted, stretching from strategic thinking and project management to business analysis and developing integrated service models. Each undertaking is carefully tailored to suit any complex environment, which helps to ensure that the services are provided efficiently and professionally. The high level of skills and experience displayed by the support engineers that serve the company is an all-important tool, coupled with the company’s diversified experience in implementing and supporting solutions in different environments. Life Energy takes it in its stride to deliver a well-balanced delivery mechanism that focuses not only on the technical components of a solution, but also addresses a range of important aspects that will result in a successful venture with a promising future.

Proven track record
Since the company was established, it has prospered within the energy industry, racking up a good track record from a slew of respected clients. Catering to a range of different segments such as telecoms, governmental, educational organisations as well as the oil sectors, some of Life Energy’s most notable clients include: Wataniya Telecom Kuwait, Viva Telcom Kuwait, Kuwait Institute for Science Research, Renewable Energy for Kuwait Oil Company, Oasis and Advanced Monitoring Site Solution KOREK Iraq.
Some noteworthy projects that form part of Life Energy’s list of merits include: successfully demonstrating fuel savings of 24 percent through live network trials for Wataniya Telecommunications (QTel) via Wataniya Hybrid Solution using numerous energy manager solutions. Currently, Life Energy is working as an EPC contractor for the Kuwait Institute for Scientific Research (KISR) on testing the latest photovoltaic technologies under local weather conditions. This project is of high importance as it will help establish the national test platform for grid connected PV systems. Life Energy has also installed state∞of∞the∞art HEI solar street lights in one of Kuwait’s most prominent landmarks – the Kuwait Scientific Centre. tne

For further information
Tel: +965 222 50 222
www.thelifeenergy.com

Listed (EURONEXT LISBON) since June 2007, Martifer (MAR PL; MAR.LS) is an industrial group with approximately 4,000 workers present in 16 countries. In 2009 its operating revenue reached 606m euros, posting in the last four years average growth rates above 32 percent. Martifer started its activity in 1990 in the metallic structures sector, conquering the Portuguese market in only six years. Since 1996 the Group has extended its activity to new construction solutions, stainless steel and aluminium structures. Currently Martifer is engaged in three business segments: power equipment for the wind industry, engineering and development of new technologies for electricity production through renewable sources; solar photovoltaic, with one of the most automated production lines with capacity for 50 MW; promotion and development of renewable energy projects, which has 104 MW of operating wind and solar parks, and more than 3 GW under development. With 18 plants in operation worldwide, Martifer has a 20-year history of success.

Metallic construction
Martifer Metallic Constructions is the Iberian market leader in the sector and one of the largest players in Europe. It has industrial facilities in Portugal, Poland, Romania, Australia, and recently in Angola, with a total installed capacity of 80,000 tonnes per year. With a vision of leadership in all the markets where it operates, Martifer Metallic Constructions focuses its development strategy on the high-growth countries of Central Europe and Angola. In mature markets, such as Iberia and Ireland, it seeks recognition from the quality of its engineering and the ability to lead projects of great complexity. Martifer’s portfolio demonstrates its ability to meet goals and overcome challenges, ensuring excellence in all the projects it completes. Essentially dedicated to the execution of projects with a high level of complexity, using in-house design and engineering, complemented by a vast on-site construction team. It executes projects with a high level of steel structure, aluminium façades and glass and stainless steel solutions. With operating revenue of 315.5m euros and an average of 2,146 employees in 2009, Martifer Metallic Constructions is present in 12 countries and is considering the entry into high growth markets like the United Kingdom and Brazil.

Steel structures
Parent company of the Martifer Group, Martifer Metallomechanic Constructions has 20 years of experience in the construction of metallic structures, having participated in the most emblematic works in Portuguese history in recent decades, such as the Expo98 and Euro2004 stadia. With a strategy based on operational excellence and efficiency, Martifer Constructions is recognised as a trustworthy and superior quality partner, capable of carrying out highly complex projects on tight deadlines. The recognition of its quality and competence is reflected in clients’ satisfaction and in the numerous awards accumulated over the years, especially those in the last three editions of the European Steel Design Awards, which awarded three of Martifer’s works: “Dragão” Stadium, “Francisco Sá-Carneiro” airport, and in 2009, the Bridge of Leixões, confirming the competence capability and engineering expertise for large projects. With recognised experience in different types of metallic structures (such as stadia, airports, bridges and tall buildings), in various geographies (especially in Europe and Africa), Martifer is currently one of the largest European players in its segment.

Aluminium
Part of the Group since 1999, Martifer Aluminium specialises in designing, engineering and implementing solutions for façades and building covers. Iberian leader in its segment, it works on the principal of trust, responding efficiently and innovatively to complex requests. The company’s rigorous work methodology combined with the technical capabilities of its employees and the use of the latest technologies and most advanced materials results in the full materialisation of architectural intentions. Martifer Aluminium is present in eight countries and has an outstanding portfolio that demonstrates its ability to execute imaginative solutions and bold and innovative projects as diverse as the “Francisco Sá-Carneiro” airport, the new Terminal 2 at Dublin Airport or the Congress Palace of the Expo 2008 in Zaragoza.

Stainless steel
Integrated in Martifer Constructions since 1996, Martifer Inox’s activity has increased in order to take on large projects, such as football stadiums, shopping centres, airports and public works, clearly benefiting from the Group’s synergies. Human resources competence associated with the underlying technology of its  production unit allowed it to reach for technical rigor which is recognised by clients and the capacity for conception, management and realisation of projects.

Aware of business opportunities and conscious of the importance of water for the future, Martifer Inox has been developing solutions in wastewater treatment since 2007, both in its structural component (stainless steel structure) and in its chemical component, with the objective of asserting itself as a company that combines high environmental consciousness with the most advanced technological resources.

Renewable energy
Today, environmental concerns must be more than an attitude, they must be a way of life and business. Martifer embraces this issue and proposes renewable energy solutions, with a key role in reducing CO2 emissions, making an important contribution to environmental preservation. Thus, it acts in the field of renewable energy in three ways: through Martifer Energy Systems providing equipment for wind energy; in Martifer Solar creating solutions that take advantage of solar photovoltaics; and with Martifer Renewables developing renewable energy projects.

Energy systems
Created in 2004, with the start up of the tower factory, which produces steel towers for wind power turbines, and the wind farm turnkey activity (BoP/EPC), Martifer Energy Systems began as a natural step into the renewable energy sector, collecting synergies, know∞how and leveraging on Martifer’s competencies in steel works, project management and vertical construction. The concern for environmental issues and search for sustainable solutions for the future have led the company to extend its activities in the wind sector, engineering and in the R&D of new technological solutions in the production of energy from renewable sources. Martifer Energy Systems has three industrial facilities in Portugal – production of wind towers (400 towers/year), components and assembly of generators in Joint Venture with Repower Systems (50/50). In the US, in partnership with Hirschfeld Industries, it has a wind tower factory with a 200 tower per year capacity, operational since the first semester of 2010. The company also controls 100 percent of Navalria, a shipyard located in Aveiro, Portugal, which specialises in ship building and maintenance, and the development of solutions for offshore energy. Present in six countries, this activity recorded revenues of 154.5m euros in 2009 and employed 587 people on average.

Solar energy
Martifer Solar is Martifer’s company dedicated to the development and construction of photovoltaic projects, installation of photovoltaic parks under turnkey or EPC contracts, development of architectural integration projects and microgeneration. It currently has one of the most automated production lines with capacity for 50 MW. The company has been working to be on the forefront of solar photovoltaic energy, combining the technical flexibility of its solutions with the quality of its products. To ensure an integrated solution to its customers, besides the photovoltaic modules Martifer Solar also provides solar tracking systems (Smartracker), solar parking lots (Smartpark) and a proprietary solution for rooftops without the need of drilling holes. It is present in Portugal, Spain, Italy, France, Belgium, Greece, United States, Czech Republic and expects to enter into new markets such as Turkey, Bulgaria and Canada. In Portugal Martifer Solar also operates in the energy efficiency area through Home Energy, which develops projects for the installation of solar energy solutions in households for microgeneration and the energy certification of buildings. The investment and constant development of its Research and Development department allows Martifer Solar to be at the vanguard of solar energy, with innovative solutions in the various business areas. Martifer Solar recorded an operating income of 130.5m euros in 2009, with an yearly average of 290 employees.

In times of change society needs visionaries. People with the courage to conceive new solutions beyond our current insight. People who lay their pioneering spirit at the service of our society and a better future. With this goal in mind and with the support of strong partners, Bertrand Piccard and André Borschberg, initiators and future pilots of Solar Impulse, are attempting to redefine the limits of human achievement. Their aim is to fly around the world in 30 days, powered solely by the sun.

The “Solar Impulse” airplane will take off and fly for several days and nights without using any fuel or emitting any pollutants. It will have a wing span of 80 metres (comparable with an Airbus A380) but will only weigh 2,000kg, not much more than a medium-sized car. 12,000 solar cells will generate energy during the day. This will be stored in extremely powerful, light-weight batteries and released at night. The dream of endless flight could become a reality – if it were not for the limitations of humans. Hence, there will be a stopover on each continent to allow for a change of pilots after five days and nights of non-stop flying during the round-the-world flight in 2011.

Now a decisive milestone is just around the corner: after years of intensive construction work and countless endurance, vibration and wind tunnel tests on individual parts, the Solar Impulse prototype is to be presented to the world public. A global premiere, which can be followed live at www.db.com/solarimpulse. The first test flights of the prototype are scheduled for the autumn, and in early 2010 the first 36-hour flight will prove that it is possible to fly through the night relying solely on the power of the sun. One thing is certain: the record round-the-world flight will set an example. “If an airplane can fly day and night without fuel, don’t tell me that our society cannot also do without fossil fuels,” emphasises Piccard. Solar Impulse will show that sustainability can and must be profitable. This is a conviction shared by Deutsche Bank, a Main Partner of the project. “Solar Impulse embodies our whole environmental commitment in a tangible and imaginative way,” underlines Dr. Josef Ackermann, Chairman of the Management Board and the Group Executive Committee of Deutsche Bank.

Out of the awareness that economic productivity, social responsibility and the protection of our environment are inextricably intertwined, Deutsche Bank has committed itself far beyond its core business to sustainability – with the clear goal of becoming a leading “Sustainable Bank”, as Hanns Michael Hölz, the bank’s Group Sustainability Officer, explains.
“Already in 1999 we established a global sustainability management system. Today, against the background of our comprehensive climate strategy, the bank’s entire energy needs in Germany, Italy and Switzerland, among others, are covered with renewable energies.”

The headquarters in Frankfurt will be one of the most eco-friendly high-rise buildings in the world once reconstruction of the “Greentowers” is completed in 2010, and by 2013 all business activities worldwide will be climate neutral. To enable its customers to take advantage of the enormous market potential of ecological and socially sustainable investment possibilities, the bank offers a wide range of respective services and products. Especially in times of change, these produce an excellent opportunity to invest in our own future and that of the globe.

“If we want to be successful in life we must develop the ability to think the opposite of what we have thought and done so far!” is how Piccard sums it up. Solar Impulse shows us how.

Eduardo Gonzalez, Spain’s representative to the Global Wind Energy Council (GWEC), said the world’s poorest continent fares worst among other regions when it came to wind power generation.

Wind installed capacity in Africa and the Middle East is seen rising to about 5.1 gigawatts in 2014 from 1.5 GW in 2010, lower even than in the Pacific region, where capacity was seen rising to 6.4 GW in four years time from 2.9 GW this year.

“In the absence of the right wind measurements, political stimulus, regulatory framework and economic support, heavy investments in the renewable sector are going somewhere else,” Gonzalez told reporters on the sidelines of an African wind energy conference.

Gonzalez said the GWEC estimated that total global new investments in clean energy projects would top $200bn in 2010, rising from last year’s $162bn.

Global wind energy supply is expected to rise by 160 percent over the next five years with China and North America leading the low-carbon push, the GWEC said in April.

Gonzalez said Africa had “extremely good” wind potential, especially in the Gulf of Suez in Egypt, in Morocco towards the western Sahara and in the Western Cape of South Africa.

South Africa’s wind industry is the least developed with less than 10 MW of capacity in comparison to 400 MW in Egypt.

In April. promise was also shown in Tanzania and Kenya, where power utility KenGen invited companies to carry out feasibility studies on nine new wind sites as it seeks to diversify its energy mix.

“However, very little wind measurements have been taken in Africa and in order to develop projects we need measurements,” said Gonzalez.

He said African countries, fearful of expensive feed-in tariffs, should rather consider tax credits to encourage private investment as it moved to build its renewable energy sectors.

African wind investments
Gonzalez, also the communications manager for Spain’s largest power utility Iberdrola, said they expected a final answer from Egypt next year on a 400 million euro ($508.1 million) 300 MW wind project bid in the north African nation.

“By the third quarter of 2011 we expect an answer,” he said, adding that, if successful, the company would install the wind turbines and operate the Gulf of Suez wind farm for 20 years.

However, he said Iberdrola would not invest in South Africa, the continent’s biggest economy, until there was stability in the regulation of the wind energy sector.

South African power utility Eskom intends procuring a 100 MW wind farm, which could be scaled up to 200 MW, as it tries to lure investors in the renewable sector after introducing attractive feed-in tariffs.

“When there is a stable regulation for the wind sector in place with the right support mechanisms, we and the rest of the investors will flow down to South Africa… Until we see a stable regulation of the wind energy sector we won’t come to South Africa, as simple as that,” Gonzalez said.

The centre-right government has launched legislation to allow the construction of new nuclear reactors, in a bid to replace the 10 ageing reactors which still produce about 40 percent of Sweden’s electricity.

Sweden was at the forefront of Western Europe’s anti-nuclear movement after the Three Mile Island accident in 1979 in the US.

In 1980, Swedes voted in a referendum to phase out existing reactors by 2010 and their fears were exarcebated with the 1986 Chernobyl disaster, which was first spotted internationally by Swedish authorities.

But finding alternative sources of energy proved too tough, so in 1997 Sweden decided to retain most of its reactors.

Over the years repairs and maintenance have proven more difficult than expected, with protracted outages this winter lifting Nordic electricity prices to record highs.

Now the cabinet hopes to lift the ban and ensure the atom remains a major component of Sweden’s energy mix without stirring up long-held divisions over nuclear power.

The bill will not expand nuclear power, the government says, but maintain it at present levels, upgrade technology and increase the liability of owners as a way of limiting the risks of accidents.

“We want to clarify that the nuclear industry has to take full responsibility for all costs regarding the worst cases, if there was a real accident,” Environment Minister Andreas Carlgren told reporters. His ministry launched the bill.

Carlgren said that if passed, the nuclear industry could build new reactors only to replace existing ones.

“So we won’t have more reactors than the 10 we have now. In 10 years’ time, one or two (new reactors) could be invested in.”

European states such as Finland, the Czech Republic and Britain are keen on nuclear power as a way to provide a reliable source of energy, cut the need for fossil fuel imports and reduce manmade carbon emissions.

Parties split on the atom
The nuclear issue may loom large in the election campaign, where the centre-right government faces an uphill battle to remain in power against a resurgent Social Democratic Party and some staunchly anti-nuclear opposition parties.

The leader of the Social Democrats, Mona Sahlin, is against building new reactors, and is hoping she will form a coalition government with the similarly anti-nuclear Greens and the ex-communist Left Party. However, many in her party are in favour of nuclear power, particularly the trade unions.

“Nuclear power is probably going to be one of four or five issues in this election,” Folke Johansson, a professor of political science at Gothenburg University, told reporters.

“But it is not going to be the dominating one,” he said, suggesting that jobs and the economy will be more important.

“Nuclear power was very controversial in the late 70s and the 1980s – one government fell because of that issue,” he said, adding that the debate has softened since then.

Surveys show nuclear power is now favoured by most Swedes. Atomic energy was ranked by Swedes the best energy source to protect the environment and create jobs in a March poll, with 26 percent of people surveyed ranking it top, ahead of wind power (21 percent) or hydro power (18 percent).

But passing the legislation will not be an easy task also because a group of rebel coalition MPs are set to join the opposition in voting against the bill. It would only take four government MPs to block it, and two have already said “No”.

“This is a question of responsibility – a security issue – for me,” said one of the rebel MPs Eva Selin Lindgren, pointing to the risks of nuclear proliferation and storage.

Step forward?
The nuclear industry welcomed the bill as a step in the right direction at a time when maintaining the old reactors, some of which have been online since 1972, takes increasing effort.

“It’s a possibility for us to develop our nuclear business, so we think the bill is a positive step,” said Mats Ladeborn, head of Vattenfall’s nuclear power activities.

“We are implementing the biggest modernisation in the nuclear history of Sweden. We had planned for the power stations to be running before winter time (but) it took longer than expected and was more complex than we could foresee,” he said.

Sweden produces nuclear energy at three plants – Forsmark, Ringhals and Oskarhamn – supplying around 9300 MW.

The reactors have suffered shutdowns this winter as operators E.ON, Vattenfall and Fortum implement upgrades to boost capacity and safety standards.

Start-up times have been delayed, helping push Nordic spot power prices to a peak of 134.80 euros per megawatt hour in February – four times the average 2009 level.

The bill is not only good news for the industry, however, as it places a bigger burden on owners should things go awry.

If a nuclear accident now occurs, plant owners must cover costs of up to 3 billion crowns ($421.4m), while the state covers up to an additional 3 billion crowns. The new bill quadruples the owners liability to 12 billion crowns.

The renewable energy industry is no longer a quirky kitchen industry, and for BP, with more than 30 years’ experience in the Solar market, it is certainly not one that has simply been strapped to the side of a large oil company. In fact, it is the future for most far-seeing corporations.

Sustainable technology and sound investment opportunities weren’t always obvious natural bed-fellows. Nevertheless big energy companies have been diverting large sums of investment cash towards developing renewable energy solutions for several years, especially important today as the need for more green and secure energy takes centre stage. As highly populated emerging economies develop, so does the global demand for energy. Climate change remains an important global challenge; however alternative energy sources are no longer just about being kind to the planet. Renewable energy has the potential to be highly profitable too, providing solutions – and there are many, including biofuels, solar and wind
– if executed effectively. “We don’t look at renewable energy from a different basis from big oil projects,” says Vivienne Cox firmly, CEO of BP Alternative Energy. “It’s a good business opportunity and these products need to be competitive in their own right.”

It’s also an industry that has the potential to create a large number of new jobs says Katrina Landis, COO at BP Alternative Energy. “In the short term, the debt markets have dried up, however when you look at any number of countries which are developing renewable energy, you realise what a strong future the industry has.” Landis points to wind turbine technology as an example of technical improvements that are possible not in five years time but now. “We’re taking advantage of new technology on one of our sites, where 100 older turbines have been replaced with just eight.” It’s a significant accomplishment – and an indicator of the rapid technology improvements which are feasible in this segment.

Obama means business
Much of the new seriousness about renewable energy is being led by President Obama. And this is where commitment is now met with hope. Katrina Landis attended the Obama inauguration events and says interest in alternative energy, particularly in the US, is massive as well as increasingly mainstream – a huge turnaround from just a few years ago. “There’s dramatic interest. Everyone from consumers to big industry. Obama has a spine of steel in terms of addressing environmental concerns as well as looking at energy security.” Meanwhile there are plenty of carbon targets to meet, and even exceed. Yet Cox says BP’s approach is much more than just meeting targets. “We are taking bold steps in BP to build the cost of carbon into everything we do; every project we consider, whether that be in Exploration, Refining or Retail. We now explicitly assume that carbon will be priced, so that alters the very way our products are engineered in the first place.”

But the fragile state of the global economy means some alternative energy companies will struggle, a point not lost on Cox. “The renewable energies market is still about growth, and yes, there are lots of companies going through challenging times. There will be shakeouts and consolidation. But the growth in this industry is being driven by a genuine concern about climate change, as well as concern about the security of control of energy supplies.”

A sounder planet
Despite the current economic difficulties, the future still needs to be planned for. That’s why BP’s Landis says taking the long view – where we’ll be in 2030, for example – is as important as the current short-term economic anxiety, however difficult. “Sure, in 2009-2010, the demand for energy could decline further. But you’ve got to think ahead and consider where developing nations like India and China, for example, will be by 2030. Their trajectory for growth is going to be significant. So we need to look at a proper diversified set of solutions for the future.”

So where does that leave us now in 2009? Landis says we don’t have to look too far to see really exciting energy possibilities being unearthed. “In 2005, when BP launched its Alternative Energy business, it committed to spending $8bn over a 10-year horizon. We’re well on track to meet this commitment. We’ve focused on four business areas which we believe will be winners for us. These are biofuels, carbon capture and storage, solar and wind. We’ve very excited about advanced biofuel technologies and are investing in lignocellulosic ethanol and biobutanol, both of which can be made from plant materials.”  BP has joint ventures working to commercialise these technologies. In February, they announced a joint venture with Verenium to produce lignocellulosic ethanol from non-food energy grasses, which expects to be producing ethanol in 2012 at a facility yet to be constructed in Florida.

Another partnership with DuPont is working to further develop biobutanol, a fuel molecule which can be blended into conventional fuels at a higher rate than ethanol, without requiring changes to fuel infrastructure or engines. Renewable biofuel technology will become incredibly important for just about all transport and urban mobility areas. It’s also the one that is likely to capture the public’s imagination says Cox. “It’s really about the notion of taking any kind of waste product or a biomass and breaking it down into fuel. And of course when we are choosing where to invest we are looking at options which achieve material reductions in greenhouse gas emissions when compared with conventional fuels and minimise any impacts on food production.” Cox is not making an argument for carpeting much of Europe’s countryside with corn fields or other fuel-plants. Rather, it’s about using land more effectively.

“We believe there is sufficient land available to meet society’s growing food, feed and fuel needs when managed appropriately” asserts Landis. Other solutions also suggest themselves: how about capturing the carbon emissions from a power plant and then pumping it back under ground into a declining oil field, which not only prevents the release of CO2 gasses into the atmosphere but also enhances oil recovery and extends the lifetime of the field? The sheer variety of sustainable, renewable energy options is huge.

Far greener than you think
One popular myth that needs debunking is that countries like China and India pay little attention to green technology and the environment because they’re too busy building up their industrial base. The reality, however, says BP’s Vivienne Cox, is rather different. “There is a perception that China won’t move away from fossil fuels. In fact, there’s a lot of progress being made in China working on renewable energy to combat change.” In fact, China is likely to leapfrog the West in terms of renewable energy development – and they will certainly be ahead of the West during the next decade says Vivienne Cox. The Chinese are also buying up green technology licences. So they are planning ahead. “It’s a mixture of demand, both private companies and government-supported schemes.”

So don’t underestimate the work that is being done, not just here in the West, but also in the new economies of the East. Just about everyone is committed to renewable energy. But the picture is not always obvious.

There is little doubt that any market is not immune to the difficulties and challenge as the global economy tightens. But there is a sustainably fuelled light bulb shining on the other side according to Cox and Landis. “It is less about faith when you look ahead at the alternative energy sector and more about a much deserved renewed commitment to an industry that not only makes good business sense to be in, but will also play a leading role in the world’s energy mix far into the future.”

Research into alternative fuels has become one of the most crucial tasks for the progress and survival of humanity. The ever∞dwindling supply of natural resources in the wake of today’s environmental concerns coupled with the instability of the world’s oil supply and waning resources have ensured biofuels are here to stay.

The advantages of biofuels are palpable. Biofuel technology has the ability to reduce the amount of greenhouse gases emitted and lower the global usage of fossil fuel. It also promises  higher energy security to the nations producing it as they no longer depend on imports at a time of extreme market volatility. In addition, biofuels can help rural development and create a new job infrastructure which aids local economies significantly.

The first generation
Biofuels are produced from organic matter and can take the form of any solid, gas or liquid. There is a vast range of organic matter that is used to produce platforms for the conversion and production of biofuel. It can be split into two groups: First and second∞generation biofuels. It is commonly accepted that technologies using the starch or sugar segments of plants such as cassava, sugar beets, wheat, corn, and sugar cane to produce ethanol are considered first∞generation biofuels. So are those that exploit sunflower oil, vegetable oil, palm oil, rapeseed or soybeans to turn it into biodiesel. First∞generation biofuels have now been produced commercially for numerous years. The key first∞generation biofuels are:

Biodiesel
Biodiesel is Europe’s most commonly used biofuel. It is generated by mixing triglycerides, fats and oils with methanol or ethanol through a chemical process referred to as transesterification. Creating it in this particular manner gives almost as much energy as conventional diesel but provides better lubrication. It has similarities to mineral diesel and is normally used in diesel engines once it has been mixed with the said mineral. A known issue with it however is that even slight exposure to various metals, water, light and even heat can bring about total dilapidation.

Syngas
Syngas is the end product of a gasification process and an extremely diverse product and can be utilised as a standalone fuel. It is mainly suited for producing chemical products and transportation fuels.

Bioalcohols
Ethanol, butanol and propanol are all bio alcohols and can serve as direct substitutions for gasoline. Butanol in particular is perceived to be a highly energy efficient fuel which can be used in a range of gas engines.

Biogas
Rise to biogas is given through anaerobic digestion of organic materials and can be produced from waste materials that are biodegradable. It consists of methane and can be attained from biological and mechanical treatment methods.

Second–generation biofuel
Second∞generation biofuels on the other hand constitute technology and equipment that converts biomass such as forest and agricultural deposits, the plant jatropha, and micro algae. It is typically composed of cellulose, lignin and hemicelluloses, and is universally known as lignocellulosic biomass. The advantage of second∞generation biofuel production is that it has a much lower impact on food production overall and is certainly more sustainable.

It is no surprise that research into second and third∞generation biofuels and outflow are a thriving global industry which proffers vast potential for investment. Energy and metals industries business data provider, Visiongain, estimates that international expenditure on biofuels for 2011 is likely to total $46.63bn.

The market gained interest particularly over the past 12 months as the price of oil rose rapidly and extensively due to global economic market volatility. This forced the EU bloc and the US to reconsider their energy policies and greatly reduce oil imports. Numerous inducements and tax credits brought in by policy makers have further encouraged biofuel manufacturing and consumption. Biofuel production remains largely focused in the regions of South America, the US and Europe, but regions including the Middle East, Asia, and Africa have of late upped their manufacturing in this industry.

Many sectors have benefitted from the growing biofuel industry. One of the most noticeable areas is aviation. New Zealand-based bio-technology group LanzaTech recently created a fuel which airline Virgin Atlantic said is a breakthrough aviation fuel because it has half the lifecycle carbon footprint of standard fossil fuel kerosene. This technology comes thanks to companies like Swedish Biofuels, which has pioneered methods of capturing waste gases from industrial steel production. According to LanzaTech this procedure could be applied to the metal processing and chemical industries in addition to an estimated two-thirds of the globe’s steel mills.

Over the next year tests will take place to establish the advancement of this cutting∞edge fuel. If the checks prove successful, Virgin noted that within three years flights from China, India and Europe could be fuelled with the new, cleaner technology. Commercial deployment is due in 2014 but the technology will first be trialled in New Zealand, and if successful, a Shanghai-based demonstration plant is due to be erected before the end of 2011.

Hedging bets
Interest in biofuels swaps has also increased tremendously over the past 18 months. However, experts believe that more clear-cut regulatory transparency is required if the market is to mature further in this area. Both US and European biofuel swap markets grew noticeably after newly introduced legislation encouraged the use of biofuels. This has led to a rise in production and in turn a climb in demand for hedging products.

According to the latest data on the Chicago Mercantile Exchange (CME) the amount of ethanol future contracts has risen over 600 percent. Figures show that the industry has gained a vast interest, with the most recent statistics showing that open interest has increased by over 150 percent from 4,000 to 10,00 contracts from the beginning of 2009 to mid-2011. Over the same period it showed that from an estimated 3,000 monthly traded contracts, they had now gone up to about 22,000. An impressive 300 percent increase was recorded for European T2 ethanol, which climbed up from 200 contracts in December 2009 to approximately 800 monthly contracts by July 2011.

Breaking through 
There is currently a vast amount of development in the industry, so it proves near impossible to follow every novel trend and idea. However, worries over the sustainability of first∞generation biofuels have strengthened. Big corporations do not want to be left behind and are catching on fast to the fact that fuelling a lower carbon future with biofuels is the way forward. This has given pioneering start-ups an opportunity to go into strategic partnerships with large multinationals in this field.

Additionally, an increasing amount of university-led associations are spearheading ideas to help expand cost-reduced production of sophisticated biofuels derived from renewable biomass. According to experts, low∞carbon biofuels represent the most viable and commercially pragmatic approach to eliminating carbon dioxide from transport fuel over the coming decades. June this year saw one of the largest biofuel deals to date between Brazilian bio-ethanol conglomerate Cosan, and Royal Dutch Shell, the multinational oil company. The joint venture, named Raízen, is scheduled to begin operations in Brazil and will become the biggest maker of low∞carbon biofuel. It is said to benefit from combining Shell’s global resources in sophisticated biofuels with Cosan’s technical expertise of generating ethanol on a large magnitude. Shell, which has to date taken a lead role as one of the key distributors of sustainable biofuels, will now for the first time turn its hand to manufacturing. The aim is to generate and put on the market close to two billion litres of the lowest∞carbon biofuel commercially obtainable each year.

The rise and rise
The rapid ascent in biofuel production over the past few years has triggered calls for more coherent policies in the area from lawmakers. The DC-based independent environmental research institute Worldwatch Institute published a report recently indicating a 17 percent rise in international biofuel production in 2010.

Figures showed that biofuels now supplied 2.7 percent of all fuel for transport globally compared to two percent a year earlier. Global ethanol production increased by 15 percent in 2010 to reach 22.9 billion gallons. It was up 3.4 billion gallons from the 19.5 billion produced at the end of 2009, said the Renewable Fuels Association.

Europe, which is a region where biodiesel is heavily used, holds a market share of around 75 percent, the European Biodiesel Board (EBB) said. In 2010 the bloc opened the doors for imports from nations including Indonesia and Argentina when domestic demand reached 12.3 million tons and by far outstripped domestic production. The EBB noted this was particularly due to countries such as France, Spain and Germany, which represent the bloc’s largest biofuel consumers. In comparison US ethanol manufacturing has risen slighty slower, it saw a rise of 30 percent to 13.1 billion, 3.1 billion higher than the 2009 figure.

The key regulation behind this industry expansion is the modified 2009 Renewable Energy Directive which imposes stretching renewable targets for 2020 across Europe. The European Commissions’ original proposal came in January 2008 but the European Council and parliament had proposed amendments which were then implemented.

A Europe-wide average of 20 percent was set as a renewable energy target for 2020, and was divided into legally binding targets for all 27 member states. Indicative trajectories to follow included a 20 percent rise towards the target by 2011-12, 30 percent by 2013-14, 45 percent by 2015-16 and 65 percent by 2017-18.

Many entrepreneurs also have been calling for international policy makers to rethink the law to help drive a green economic recovery. Chairman of the Virgin Group, Sir Richard Branson continues to campaign vigorously and has set up the ‘Carbon War Room’ NGO to encourage low carbon policies and the development of cutting∞edge technologies. Branson cautioned that unless a measure to compel bigger outlays in renewable energy is implemented, the global economy will experience: “The mother of all recessions”. He believes that lawmakers need to embark on a vital reform of the existing tax structure to motivate investment in green and clean technologies. “The way to kick-start the revolution is to have no tax at all on the entire clean energy while gradually increasing tax on dirty energy,” the entrepreneur said. 

Relying on biofuels
The answer to how much humans will come to rely on biofuel in the future is slowly taking shape as companies develop a greater understanding of the technology and give a clearer indication of any potential progress.

Biofuels hold noteworthy prospects to transferring a portion of the requirement for fossil fuels. A recent forecast by market intelligence firm, Pike Research, shows that production and utilisation of biofuels will grow more than twofold, with the global market for biofuels increasing from $82.7bn in 2011 to $185.3bn by 2021.

According to the research, the extensive increase of biofuels could modify the industrial and geopolitical landscapes by meeting growing consumer demand in aviation, ground and maritime fuel markets. However, conventional biofuels are often limited and hampered by financing, environmental issues and price parity.

Although previous triumphs in the US, Brazil and the EU, have exhibited the commercial feasibility of conventional biofuels, the industry is now entering a novel period of flexibility, product objectivity, and the recent emergence of superior feedstock.

The market analysis by Pike Research shows that key players in the field are convinced that manufacturing and utilisation will, over the next ten years, further increase in both developed and developing economies. Furthermore, it found that uneven feedstock access and consumption will likely lead to a boosted global biofuel trade. Countries such as Brazil and parts of Europe are already emerging as primary suppliers internationally.

Brazil now leads the world in biofuel for transport use. Motorists at petrol stations are offered the option of pure ethanol or a mixture of gasoline and ethanol. An estimated 90 percent of the nations’ newly produced vehicles can now run on both fuel types. Advances in technology and efficiency gains such as increased biomass yields per acre and more gallons of biofuel per ton of biomass could potentially reduce the economic price tag and environmental force of the production of biofuels. Brazil’s sugar cane association Unica says that the country momentarily yields an estimated 7,000 litres of ethanol per hectare of cane in contrast to 2,500 litres for a hectare of wheat in Europe or 3,800 litres for the same measurement of corn in the US.

As conventional corn∞based ethanol increases, more sceptics express their concern with respect to the “food for fuel” debate that has been troubling the industry. Biofuel companies working on second∞generation biofuels hope to overcome that issue through the use of innovative feedstock. The race is now on to find the cutting∞edge technology required to bring the market a product that will benefit the environment without affecting basic human needs.

One leaked document from the EU’s executive, the European Commission, suggests biofuel from palm oil might get a boost from new environmental criteria under development.

But another contains a warning from a top official that taking full account of the carbon footprint of biofuels might “kill” an EU industry with annual revenues of around $5bn.

The EU aims to get a tenth of its road fuels from renewable sources by the end of this decade, but has met with criticism that biofuels can force up food prices and do more harm than good in the fight against climate change.

Most of the 10 percent goal will be met through biofuels, creating a market coveted by EU farming nations, which produce about 10 billion litres a year, as well as exporters such as Brazil, Malaysia and Indonesia.

Environmentalists say biofuels made from grains and oilseeds are forcing farmers to expand agricultural land by hacking into rainforests and draining wetlands – known as “indirect land-use change” (ILUC).

Clearing and burning forests puts vast quantities of carbon emissions into the atmosphere, so the EU risks promoting damage to the climate by creating such a valuable market.

To counter that risk, strict environmental criteria have been put in place.

The European Commission has also been looking at introducing new rules to curb the impact of ILUC, but its progress had been complicated by conflicting opinions among specialists on trade, agriculture, energy and environment.

The stakes are high for European biofuel producers.

Negative light
“An unguided use of ILUC would kill biofuels in the EU,” a senior agriculture official in the Commission wrote to a top energy official in a letter seen by reporters.

As part of its research, the Commission has received new scientific reports casting a new negative light on biofuels due to their indirect impact on land use, but has not made them public, says environmental group T&E.

The group has made a legal request to the Commission for the documents, but it has so far taken more than three-times the statutory 30 days to provide them.

“These reports need to be released so the public can see the full facts,” said T&E campaigner Nusa Urbancic. “What is especially worrying is that we are seeing a pattern of manipulation of the science.”

Commission officials said their research included hundreds of documents, making it difficult to meet T&E’s request.

“The Commission is taking indirect land use change emissions from biofuels very seriously, and is conducting a large amount of work, including modelling work, in order to understand this issue with the best science available,” said Marlene Holzner, spokeswoman for Energy Commissioner Guenther Oettinger.

“If the final results of this work show that indirect land use change emissions from biofuels are significant, then the Commission will need to consider what would be the appropriate policy response,” she added.

A recent Commission document on biofuels appeared to wave through the palm oil industry, which stands accused of cutting down tropical forests in Malaysia and Indonesia to make way for plantations.

“A change from forest to oil palm plantation would not per se constitute a breach of the criterion,” said the document seen by reporters.

Holzner cautioned against drawing any conclusions from an unfinished draft.

“EU policy promotes only those biofuels which positively contribute towards our ambitions to decarbonise our energy systems,” she added.

The deal comes as the Chinese government aims to boost renewable energy
generating capacity in the country, with plans to generate at least
10,000 MW of solar energy and 20,000 MW of wind power by 2020.

In
a statement, eSolar said equipment maker China Shandong Penglai
Electric Power Equipment Manufacturing Co was developing solar thermal
plants using eSolar’s technology.

It did not disclose
financial details of the deal, but analysts said the 2,000 MW project
was the largest of its kind in China and could easily be worth more
than $5bn.

Solar thermal power uses the sun to heat water,
producing steam to power a turbine and create electricity. The
technology is seen by some as a viable replacement for fossil-fuel
generators because such plants can rival the capacities of many
conventional power plants.

eSolar said China Shandong Penglai
was building the project along with a biomass electricity generation
facility within an industrial park in Yulin, Shaanxi province.

China Shandong Penglai would operate the first 92 MW this year, the statement said.

The
Pasadena, California-based company has deals with US utilities,
including NRG Energy Inc to create more than 400 megawatts at solar
thermal power plants in the US Southwest. It recently opened its first
commercial power plant in Lancaster, California.

eSolar’s investors include technology incubator Idealab and Oak Investment Partners.

The US, seeking to halt Tehran’s nuclear enrichment activities, passed unilateral sanctions earlier in July that for the first time allow it to punish the US operations of international firms who supply fuel to Iran.

Although the world’s fifth-largest oil exporter, Iran lacks the refining capacity to meet domestic fuel demand and relies on imports to meet up to 40 percent of its gasoline needs.

The EU’s new measures are its first attack on technical assistance and investment in an oil industry already sapped by years of international isolation.

“Companies with operations in the US are having to be very careful indeed,” said Mehdi Varzi, of independent oil and gas consultancy Varzi Energy.

“The sanctions can be interpreted in any way Congress likes, so anything, even a trade of just a few million dollars, could be seen as abetting the other party.”

While the US has yet to clarify how to interpret its rules, some firms have chosen to implement them strictly, denying Iranian aircraft the right to refuel in international airspace and forcing Iran to rely more on traditional allies for shipments of gasoline.

Washington has said only that the measures apply to firms supplying Iran with cargoes worth more than $1m or with fuel that has an aggregate fair market value of $5m over a 12-month period.

That is much less than the approximate market value of around $25m for just one 35,000 tonne cargo of gasoline. Tehran is importing nine cargoes of that size in July.

Rising costs, dwindling expertise
Many international oil firms and trading companies had already stopped supplying gasoline to Iran in anticipation of the sanctions. France’s Total did so soon after the US Congress passed them.

The smaller pool of sellers has driven up the cost of imports to Iran by as much as $10 a tonne, according to oil traders. With imports of around 315,000 tonnes in July, that would add around $3m to Iran’s monthly import bill.

Further strain on Iran’s finances would add to the progressive impact of sustained sanctions that have made international oil firms leave once projects have been completed.

“Nobody argues about the size of Iran’s reserves. But you have to put a dollar in to get a dollar out. The upstream direly needs investment and isn’t getting it. Iran’s upstream and downstream oil sector is a mess,” said Varzi.

State-run Asian energy firms have taken on more projects as western firms have left, but analysts say they often lack the experience and technology needed by Iran’s oil industry.

This has left Iran struggling to arrest a production decline rate of around eight or ten percent at its mature fields, analysts said, let alone increase output.

In its medium-term outlook published in June, the International Energy Agency forecast Iran’s crude capacity would decline by 675,000 bpd by the end of 2015 to roughly 3.3 million bpd.

In a monthly report, the IEA, which predicted the new sanctions would have a material impact, pegged Iran’s capacity at 3.96 million bpd, below the 4.1 million bpd Iran says it has.

It is difficult, however, to say precisely what Iran’s capacity is as output is limited by targets agreed with OPEC.

Sanctions not the only factor
Sanctions are not the sole factor in the decline of Iran’s energy sector. Analysts also blame political interference as President Mahmoud Ahmadinejad has increased his control over the strategic industry, on which government revenues depend.

Companies with connections to Iran’s Revolutionary Guards have taken more energy contracts under Ahmadinejad. This has contributed to delays with projects as some of the firms lack the expertise necessary for the work, analysts said.

“It’s not so much because of sanctions but because of weak management of the sector,” said Bill Farren-Price of consultancy Petroleum Policy Intelligence.

“Unqualified companies are being awarded contracts they are not capable of properly implementing. There is an increasing politicisation of the oil ministry, the National Iranian Oil Company and the contractors.”

Even with the upstream and downstream impact of the latest sanctions, there are those who say Iran would find a way to maintain the sector and who are unconvinced by the latest measures.

“I think the sanctions have in fact been token sanctions. I think the global consumers realise that Iran is a very important player in the energy industry and they are not going to do anything that damages the industry without having repercussions on their own economies,” said Sadad al-Husseini, a former senior official at Saudi state oil firm Saudi Aramco.

“For the longer term, there will be enough countries that are concerned about Iran’s output,” he said, naming China and India as examples. “It’s never easy to make an embargo hold across the world.”

“We have a lot of crude oil on land and offshore,” OPEC Secretary General Abdullah al-Badri told reporters on the sidelines of an industry event in Doha. “OPEC is overproducing, there is no doubt about it.”

Badri urged greater compliance from OPEC producers with deep curbs in production agreed in 2008. The group agreed to cut output by 4.2 million barrels per day then, but higher prices have encouraged some members to informally boost output and the group is now delivering around half of the agreed cut.

Core Gulf Arab members Saudi, the UAE and Kuwait have been the most disciplined in holding to output restraints.

The oil minister of OPEC’s top producer and most influential member Saudi Arabia said oil market fundamentals were balanced.

“There is balance between supply and demand,” Ali al-Naimi told reporters.

The drop in oil prices was linked to speculative play as the market was weighed down by uncertainty sparked by Greece’s debt problems, Badri said.

OPEC had no price floor to trigger action, he added.

“We don’t have a target price. I think it [price drop] is because of the Greek problem,” Badri said.

A senior Gulf OPEC delegate told reporters the impact of the Greek debt crisis on oil demand would be limited and that prices were unlikely to slide to $65.

“I don’t expect the price to go to $65,” the delegate said. “The economic crisis in Europe will be limited and contained.”

Wait and see
OPEC would take a wait to see if markets calmed before considering any action, Badri said.

“I’m not going to move because the price goes up and down, volatility is the name of the game,” he said.

The group had no plans to meet in response to the recent tumble in prices, Qatar’s Oil Minister Abdullah al-Attiyah said.

OPEC was next scheduled to meet formally in October to discuss oil supply policy, which it has kept unchanged since late 2008.

Demand for oil was expected to grow by around 900,000 barrels per day in 2010, led by rising appetite from Asia, in particular China and India, Badri said in a presentation to an Arab energy conference.

“The economic recovery is proceeding at a satisfactory pace. Oil demand is growing again and is expected to grow by 900,000 barrels per day in 2010,” Badri said.

Turmoil in Europe and the possibility that China would tighten its fiscal policy to slow inflation were among the main downside risks to oil demand growth, the International Energy Agency’s Executive Director Nobuo Tanaka told reporters.