Davos: The co-operation of China and India is absolutely vital in the global fight to reduce carbon dioxide emissions, according to the International Energy Agency's chief economist, Fatih Birol. Speaking at a fringe meeting at the World Economic Forum in Davos last week, Dr Birol said that Chinese emissions were likely to be at least twice those of all OECD member countries over the next 25 years and he predicted that fossil fuels will remain the primary source of energy until at least 2030, with nuclear and renewable energy sources only accounting for a relating small share of the overall energy mix.
This forecast will relieve some tanker owners who are shelling out record sums for new VLCCs to be delivered in 2009 and later, with operating lives of at least 20 years. According to Clarkson, there are 169 VLCCs on the orderbook, representing more than 36% of the fleet today. Typically, such ships come with a price tag of about $130m, nearly twice the price just four years ago.
High oil prices and increasing volatility were to be expected, Dr Birol said, commenting that he would not be surprised if oil prices rose again from today's lower levels. Much would depend on Saudi Arabia, he suggested, one of the few OPEC members with scope to raise oil output by a significant margin. He said that spare capacity in the Saudi kingdom was probably between 4-5m barrels a day and that could provide some comfort to today's tense energy market. Oil prices were a key driver with respect to biofuels development, Dr Birol said, which have the potential to cut oil demand from the transportation industry. [05/02/07]
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