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 19 July 2008 15:47 BST

Opec warning on biofuels

Wednesday, 06 Jun 2007 10:07
Opec says it may cut long-term investment
The Organisation of the Petroleum Exporting Countries (Opec) has warned that moves by industrialised nations to develop biofuels could send oil prices "through the roof".

Today's caution from Opec secretary general Abdalla El-Badri comes as G8 leaders prepare to meet in Germany for a three-day summit with climate change and energy security at the top of the agenda.

US president George Bush has already pledged to cut America's use of petrol by 20 per cent over the next ten years.

But Mr El-Badri told the Financial Times that the powerful cartel of Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, Libya, United Arab Emirates, Algeria, Nigeria and Angola would consider cutting its investment in oil production as a result.

"If we are unable to see a security of demand, we may revisit investment in the long-term," he said.

Opec currently controls more than two-fifths of oil production worldwide.

As the west moves towards biofuels, which can be produced by burning vegetable matter, Mr El-Badri warns that "you don't get the incremental oil and you don't get the ethanol".

The Vienna-headquartered organisation has previously indicated that biofuel demand was pushing up global food prices.End of story


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