Production investment is needed not only to boost existing capacities to meet the growing needs of emerging countries.

he spike in oil prices in recent months is stoking heated arguments between market players, who blame each other for the lack of production capacities that has been exposed by strong global demand. At a seminar last week organized by the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, the oil world's principal actors-- producer and consuming countries, oil companies and analysts--discussed the contentious issue at length.
"Investment matters," Claude Mandil, executive director of the International Energy Agency (IEA), warned. Production investment is needed not only to boost existing capacities to meet the growing needs of emerging countries, but also to maintain current capacities by improving crude recovery techniques, he said. Refining capacities were also considered inadequate.
The IEA, which represents the western consuming nations, repeatedly sounded the alarm over what it saw as booming demand that will span the next three decades. For transportation and a number of other sectors, nothing can replace oil, the agency argues.
Norway's oil minister, Thorhild Widvey, took the same tack.
The 'key challenge,' she said, was to respond to growth in oil demand that 'is the strongest in decades'. She said: "Companies were quick to cut investment budgets in the 1980s' but were slow to react to higher price levels. I think we will continue to see relatively high prices in the future."
Meanwhile, oil company representatives defended their investment record. "Of course, we are doing it, it's our lifeblood," the chairman and chief executive of US giant Chevron, David O'Reilly, said in an interview, AFP reported.
But the balancing act is often tricky, because besides the clear issues of financial profitability at play, the majors face the fact that two-thirds of the world's oil reserves are found in a fistful of countries in West Asia. And some of them welcome foreign companies, while others stake their black gold as the exclusive preserve of their state companies.
"It is important to have the opportunity to invest more in the Opec member countries, perhaps by means of joint ventures with local oil companies. If one wants to increase production capacity, it's fundamental," the chairman and CEO of French group Total, Thierry Desmarest, said earlier in the past week.
Mandil argued for wide-open market access. "It would be good if all companies would be allowed in OPEC countries, and it is not the case," he said, adding "Much of the world reserves is restricted, in some cases it's totally forbidden."
But the dynamic market trend could change that. Opec has acknowledged for months that the organization is straining at near-capacity production, rendering ineffective its traditional role of market regulator.
For Frederic Lasserre, an analyst at French bank Societe Generale, OPEC will have to open up access. "That is going to take time but I think that in the long run it is practically the only possible way to allow OPEC to meet demand," he said.
"If it wants to increase its market share to the level which is indicated by the (demand) forecasts of today, it seems unlikely that it can do it without the participation of international oil companies, not only because of their technical know-how but also their ability to mobilize investments which will be 100% dedicated to increasing capacities," he added.

For the first time, Massachusetts Institute of Technology (MIT) researchers have incorporated a plant's ability to convert sunlight to energy into a solid-state electronic "spinach sandwich" device that may one day power laptops and cell phones.
At the heart of the device is a protein complex dubbed Photosystem I (PSI). Derived from spinach chloroplasts, PSI is 10 to 20 nanometres wide. "They are the smallest electronic circuits I know of," said researcher Marc A. Baldo, assistant professor of electronic engineering and computer science at MIT.
Baldo and other researchers from MIT, the University of Tennessee and the US Naval Research Laboratory, including electrical and biomedical engineers, nanotechnology experts and biologists, collaborated on the world's first solid-state photosynthetic solar cell. The work was reported in NanoLetters, a publication of the American Chemical Society, e4engineering.com reported.
"We have crossed the first hurdle of successfully integrating a photosynthetic protein molecular complex with a solid-state electronic device," Baldo said. Plants' ability to generate energy has been optimised by evolution, so a spinach plant is extremely efficient, churning out a lot of energy relative to its size and weight. But combining biological and non-biological materials in one device has stymied researchers in the past. Biological materials need water and salt to survive and both are deadly for electronics.
A new twist in the current work is a membrane of peptide surfactants, similar to the main ingredient in soap, that helped the photosynthetic complexes self-assemble and stabilise while the circuit was fabricated.
So far, scientists and engineers' efforts to harness the photosynthetic properties of green plants have been most successful with naturally soft organic materials in liquid solutions. But if organic solar cells are to be practical for commercial devices, they need to be integrated with solid-state electronics.The researchers ground up ordinary spinach and purified it with a centrifuge to isolate a protein deep within the cell.
The resulting dark green pellets were purified still further and coaxed into a water-soluble state. One of the challenges was to keep the proteins in the same configuration as they appear naturally in the organism.
The 80,000-plus kinds of proteins in our body, when in fragments called peptides, transform themselves like tiny pieces of Lego into millions of substances. Shuguang Zhang, associate director of MIT's Center for Biomedical Engineering, discovered that these same peptides can be tweaked into forming completely new natural materials that perform useful functions. One of his designer nanomaterials, which acts like the main ingredient in soaps and detergents, turns out to be ideal for keeping protein complexes functional on a cold, hard surface.
The spinach-sandwich device has no water. Proteins usually need water to survive, but using Zhang's detergent peptide, the researchers were able to stabilise the protein complexes in a dry environment for at least three weeks.
"Detergent peptide turned out to be a wonderful material to keep proteins intact on the surface with electronics," Zhang said. He speculates that the detergent material has some water trapped within it, similar to the way plant seeds hoard oils that maintain the seeds' integrity in dry conditions.
The bottom layer of the molecular electronic device is transparent glass coated with a conductive material. A thin layer of gold helps the chemical reaction that assembles the spinach chlorophyll Photosystem I complexes. The researchers then evaporate a soft organic semiconductor that prevents electrical shorts and protects the protein complexes from the layer of metal that completes the sandwich.
The researchers shone laser light on the device to create optical excitation, then measured the resulting current. "An important caveat is that we got very little current out, mostly because we had just a thin layer of the complexes in our devices," Baldo said. "Most of the optical excitation passed straight through without being absorbed. Of the light that was absorbed, we estimate that we converted around 12 percent to charge."

Wood is by far the most widely used biomass energy source.

Biomass energy is power generated by burning any organic plant matter, including wood. As such it was perhaps humankind's earliest source of fuel. Wood is by far the most widely used biomass energy source, but other plants are also used, as are residues from agriculture or forestry and the organic components of municipal and industrial wastes.
Environmentalists are enthusiastic about expanding the use of biomass energy because it is fundamentally a renewable energy source and has the potential, if widely used, for greatly reducing the greenhouse gas emissions that contribute to global warming. While the burning of biomass fuels generates carbon dioxide (CO2), the leading greenhouse gas, new plants grown for biomass remove CO2 from the atmosphere. So as long as biomass energy sources continue to be replenished, their net CO2 emissions will be zero, poconorecord.com reported.
Biomass, because it is available on a recurring basis, is the world's most plentiful fuel source, and it is second only to hydropower in efficiency. Thus it is a very viable alternative to burning fossil fuels. Farmers around the world are now cultivating fast-growing trees and grasses specifically for biomass energy use.
Developing countries, especially those in Asia, Latin America and Africa, are currently the primary users of biomass as fuel, mainly because in many locales they lack access to other forms of energy. In the developing world, biomass makes up almost a third of total energy use. By contrast, the US uses biomass for only 4 percent of its total energy supply.
Many countries are making concerted efforts to increase their use of biomass. Australia is generally recognized as the leader in developing biomass projects, due to the close cooperation there between government agencies, research facilities and industry. Britain is also working on some significant biomass projects, including the establishment of power stations fueled by fast-growing crops.
The International Energy Association reports that biomass has the potential to supply 40 percent of the world's energy needs. Studies by the Shell International Petroleum Co. and the Intergovernmental Panel on Climate Change are equally if not more optimistic and project that biomass could satisfy between one-quarter and one-half of the world's demand for energy by the middle of this century. This projection implies a world full of "bio-refineries," where plants provide many of the materials we now obtain from coal, oil and natural gas.
Looking ahead, some analysts have begun to talk about a "carbohydrate economy" in which plants would be a major source of not only electricity and fuels, but also construction materials, clothes, inks, paints - even industrial chemicals.

There are two reasons why society has to get out of oil, and at first sight, they seem contradictory. Firstly, oil is running out. Secondly, we cannot afford to burn it all. Oil is running out because it is a finite resource. Optimists, like the US Department of Energy and the oil companies, estimate that around 2,600 billion barrels are left in known deposits and predictable future discoveries. Pessimists, like the Association for the Study of Peak Oil and Gas, reckon on more like 1,000 billion barrels.
In a society that has allowed its economies to become geared almost inextricably to growing supplies of cheap oil, the difference is seismic. If there are 2,600 billion barrels left, the topping out point--or the so-called peak of depletion --lies far away in the 2030s.
The "growing" and "cheap" parts of the oil-supply equation are feasible until then, at least in principle, and we have enough time to get ready for the hydrogen age that must follow the hydrocarbon age. If there are 1,000 billion barrels left, the peak of depletion may be as soon as 2007. The "growing" and "cheap" parts of the equation become impossible, and there is not enough time to make the transition from oil to hydrogen. Economies cannot run without energy and global depression lurks around the corner.
This way of looking at oil, of course, assumes that we can afford to go on burning it for as long as we can find and pump it. Most economists and financial analysts live in a culture that assumes this. But they are wrong. We can not. The reason is global warming, solaraccess.com reported.
If we do nothing about our use of fuels, in particular the burning of oil, gas and coal, global warming is also quite capable of sparking the next depression, as well as adversely affecting ecosystems.
As the British government's chief scientist, Professor Sir David King said, global warming is the greatest threat we face. We may not be able to plug the gap within four years.
So, if the oil depletion pessimists are correct and the peak of depletion is indeed as soon as 2007, we are in big trouble, whether there is global warming or not. Realization that growing supplies of cheap oil are no longer available will dawn at some point this decade, the alternatives will not be ready in sufficient volume, and the economic dominoes will begin to fall.
So are the pessimists correct? Before the Shell reserves scandal I considered it unlikely. Certainly there were things to be worried about, especially the deeply suspicious increase of quoted reserves by leading Opec nations in the 1980s soon after an OPEC agreement to tie national production quotas to national reserves.
But, in an increasingly transparent corporate environment, I could not believe that the oil companies would stoop to inflating their reserves. I was wrong. Earlier this year, Shell, the Anglo-Dutch giant, admitted to a 20 percent overstatement of reserves. Then the company downgraded its supplies four more times, admitting overstating reserves by 4.5bn barrels.
At current rates, that is equivalent to two months worth of global oil use. If sober Shell can cause such ignominy, then which other companies are doing the same? While we are asking this question, let us ask another equally pertinent one. How serious have the oil companies been about their own renewable energy and hydrogen programs to date?
Have they applied anything like the entrepreneurial zeal they have shown for 100 years on the frontiers of the hydrocarbon age? If they have been falsely encouraging the view that peak depletion is distant, while holding back the development of the alternatives, then that would be a crime indeed against society.
Whatever the answer, with oil prices hovering under the $50 a barrel mark and with profits measured well above $1m per company per hour, windfall taxes on Big Oil would be a great place for finance ministers to start bankrolling a war on oil dependence.