Opec has warned western countries that their efforts to develop biofuels as an alternative energy source to combat climate change risks driving the price of oil “through the roof”.
Abdalla El-Badri, secretary-general of OPEC, said it was considering cutting its investment in new oil production in response to moves by the developed world to use more biofuels. His comments mark the first clear threat that the cartel might act to safeguard its interests in the face of a shift towards biofuels.
Mr El-Badri warned that biofuel production could prove unsustainable in the medium term as it competed with food supplies. Biofuels are one reason retail food prices are now heading for their biggest annual increase in about 30 years.
Mr El-Badri said this meant the biofuel strategy championed by Mr Bush and European leaders would backfire because “you don’t get the incremental oil and you don’t get the ethanol”. He said Opec members had so far maintained their investment plans but he warned: “If we are unable to see a security of demand…we may revisit investment in the long-term.”