US green energy policies 'to hit Gulf oil exporters'
Abu Dhabi, March 3, 2010
The new 'Green energy' policies under study in the US and China calling for more usage of electric cars and renewable energy is likely to deal a big blow to the UAE and other Gulf exporters, said a new report, citing an US think tank.
The proposed policies in the world’s biggest oil-consuming countries leave the Gulf exporters in a difficult position as they weigh investments of billions of dollars in new oilfields and export terminals, the National reported.
'The Green energy policies that target carbon emissions by shifting energy sources away from oil and other fossil fuels are some of the most important variables in the oil markets, the report said, citing Amy Myers, energy expert at Rice University’s James A Baker III Institute for Public Policy in Texas, which is set to publish a study on the topic this year.
'In the US, the effects of policies to raise fuel efficiency and encourage electric cars and renewable energy could range from having barely any impact, to reducing consumption by as much as 7 or 8 million barrels per day (bpd) after 2020, Myers pointed out.
'That is equal to as much as 40 per cent of daily US consumption today,' she said.
'If the US, the world’s largest oil consumer, could eliminate 6 to 7 million bpd through policy, that would wipe out whatever gain you could imagine from China,' she quipped.
Myers pointed out that China was likely to improve the efficiency of its oil use faster than experts had predicted.
If China implemented the types of energy efficiency improvements that western countries introduced during the 1970s oil crises, she said, the country’s use of oil in the next two decades could be millions of barrels per day lower than forecast.
Meanwhile, the UAE Energy Minister Mohammed Al Hamli said the global policies, if fully implemented, were likely to have “far-reaching consequences for global energy markets.”
World oil markets are now balanced between the needs of energy consuming and producing countries, with prices at between $70 and $80 a barrel, but prices are being sustained at that level by the perception that producers will need to tap hard to reach fields that cost a lot to drill, Al Hamli was quoted as saying in The National.
“The apparent mismatch between oil price and short-term market fundamentals is an illusion,” he added.
He pointed out that the Middle East oil producers were themselves playing a significant role in the growth of global oil consumption, forcing the region’s governments to divert part of their output from exports to meet domestic energy needs.
A significant portion of the growth in consumption in producing countries is due to subsidies, he added.