In 2006, concerns about geopolitical instability in producer regions pumped prices higher and led to the all-time highs above $78 per barrel in July and August. (WN.com Photo)

Crude oil prices could head lower in 2007 from current levels of about $60 per barrel, as global production catches up with demand and geopolitical risks lessen, experts say.
Despite hitting record highs in July, oil futures in New York ended the year about 1,5% lower than at the beginning of 2006, with futures in London up just 2%.
“This year, the main story has been the political risks story,“ Global Insight oil analyst Simon Wardell said.
In 2006, amid an already tight supply situation, concerns about geopolitical instability in producer regions pumped prices higher and led to the all-time highs above $78 per barrel in July and August, Mg.co.za said.
The threat of United Nations sanctions against Iran over its nuclear stand-off with the West led the Islamic Republic to hint at threatening disruption to its oil exports, which in turn sent prices surging.
In Nigeria meanwhile, militant attacks on oil facilities in the Niger delta have slashed the African country’s output by up to a third, according to AFP.
Prices were also supported this year by the July conflict between Lebanon and Israel, worsening violence in Iraq, and a hardening of relations between the United States and South American oil giant Venezuela.
And despite North Korea not being an oil producer, news that it had test-fired missiles supported prices as traders felt the move could strengthen Iran’s position in its diplomatic battle with the West.
Aside from geopolitical concerns, oil futures won a lift from fears that the 2006 hurricane season would match the previous year’s ferocity and due to the temporary closure of facilities in Prudhoe Bay in Alaska, the biggest US oil field.
These threats and disruptions led oil prices to strike record high points. In July, light sweet crude hit a peak of $78,40 per barrel in New York. In August, Brent North Sea crude reached an all-time high of $78,64 per barrel in London.
These levels put oil prices 20 dollars higher compared with the start of 2006 and four times higher compared with 2002.
However they have since dived owing to high levels of US energy inventories and mild temperatures in the United States, while traders are beginning to overlook unrest in oil producing countries such as Nigeria.
Meanwhile with producers--OPEC and non-OPEC members--pumping at full capacity, even minor output trouble would have pushed prices disproportionately upwards earlier in the year.
But as Lehman Brothers analyst Ed Morse pointed out: “Nothing that could have gone wrong in 2006 went wrong.“ For example, Iran was not hit by economic sanctions and the hurricane season was calm.
Global Insight’s Wardell added: “At its peak when we were at 78 [dollars], I suppose you could say it [the geopolitical fear] was adding $25 to $30 a barrel.
“It’s come down to around $15 now.“
Wardell said that prices were now trading towards a range that was more reflective of the true state of demand and supply, which he put at between $55 and $60 per barrel.
In 2007, he forecast that “prices will probably rise further from where they are over the winter and then begin to dip through the year as supply meets demand“.
In 2005, crude prices had raced ahead owing to strong demand in China and the United States, as well as lower production caused by hurricane damage to oil installations in the Gulf of Mexico.

The year 2006 saw many historic technological, financial and political developments for renewable energy around the world. From the passage of SB1 in California to a record year for wind in the US, Canada and UK, renewable energy industries made tremendous strides over the past 12 months.
So, to welcome in the New Year, we’re recapping some of the highlights of 2006. Enjoy!

Million Solar Roofs Bill
Signed Into Law
After a long roller-coaster ride in the California legislature, the Million Solar Roofs Bill, SB1, became law when Governor Schwarzenegger, who campaigned on a pledge to create a major solar program, signed the bill in August, according to Solaraccess.com.

Solar Cell Breaks
40% Efficiency Barrier
A photovoltaic (PV) cell achieved a milestone in December with a conversion efficiency of 40.7 percent. Produced by Spectrolab, Inc.--a wholly owned subsidiary of Boeing--and funded in part by the US Department of Energy (DOE), the breakthrough could lead to PV systems with an installed cost of $3 per watt and produce electricity at a cost of $0.08 to $0.10 cents per kilowatt-hour.

Key Tax Bill for Renewables Passed by Congress
The US Senate approved the “Tax Relief and Health Care Act of 2006“ by a vote 79-9, thereby extending many of the tax credits that benefit the renewable energy industries. President Bush signed the bill into law in December.

SunPower to Acquire PowerLight
SunPower Corporation, a manufacturer of solar cells and panels, announced in November that it had signed a definitive agreement to acquire PowerLight Corporation, a global provider of large-scale solar power systems. The deal is valued at $332.5 million.

Australia to Build
154MW Solar Energy Plant
In the face of overwhelming scientific evidence, the Australian Government made a significant change in its energy policy this past October by announcing it will contribute AUS$ 75 million [US$ 57 million] towards the building of the world’s largest solar energy plant as part of its recently unveiled renewable energy package.

Virgin Group to Invest
$3b in Renewable Energy
Out of an estimated $7.3 billion pledged to address issues such as poverty, disease, conflict and climate change at the Clinton Global Initiative (CGI) in September, nearly half of it will go toward renewable energy projects thanks to a $3 billion pledge by British business mogul Sir Richard Branson.

UK Offshore Wind Projects Given Green Light
The British government gave the go-ahead for two major offshore wind farms--the London Array and the Thanet--to be built off the southeast coast of England in the Thames Estuary in December. Together, the projects will boast more than 400 turbines and are expected to produce up to 1.3 gigawatts of electricity when fully operational.

Biodiesel Edges Out Ethanol
Five University of Minnesota researchers took a stand in the long-running debate over whether ethanol from corn requires more fossil fuel energy to produce than it delivers. Their answer? It delivers 25 percent more energy than is used (mostly fossil fuel) in producing it, though much of that 25 percent energy dividend comes from the production of an ethanol byproduct, animal feed.

Rebirth of Concentrating Photovoltaics
The Concentrating Photovoltaics (CPV) industry will soon take up a larger share of the solar market as technology improves, investment pours in and cost comes down, according to leading CPV manufacturers at the Solar Power 2006 conference and expo.

Selling Solar to
Mainstream America
When the clock strikes midnight on January 1, 2007, SB 1, California’s new state law that provides $3.2 billion in funding to build a million solar roofs over the next ten years, will officially take effect. But in order for SB 1 to succeed--and the solar industry as a whole to continue to expand--it’s time to start marketing solar power as an accessible, aesthetically pleasing, and cost-effective product to the average consumer, according to California Senator Kevin Murray.

Solar Energy Milestone
In Arizona Desert
In the Arizona desert, 30 miles north of Tucson, the first Concentrating Solar Power (CSP) trough-style energy facility to be constructed in nearly two decades officially went online in April and began delivering power to the US grid. The rows of gleaming mirrored troughs that power a one-megawatt (MW) generator represent a new phase for solar energy in Arizona and the broader US.

Windmills have been energizing many parts of Europe for several years now. They remain to be a major contributor to the power sources of Europe (20 percent in Germany and practically all for Denmark) even as the continent has tapped nuclear and other energy sources. But in tropical countries like the Philippines--where the wind comes mainly from open seas and mountain tops--this source of energy is virtually unknown.
Under the Green Renewable Independent Power Producer (GRIPP) program of the International Institute for Energy Conservation, Greenpeace Southeast Asia and various international stakeholders like Germanwatch, the Philippine Rural Reconstruction Movement and Solar Electric Co. Inc. and the LGU of Negros, windmills will be introduced and will soon become a vital part of the landscape of Negros province, Philstar.com said.
Over at Sitio Wayang, Barangay Patic--the very site that rejected the 50-MW coal fired power plant--there stands a 40-foot anemometer, the precursor of an on-grid wind farm called Pulupandan wind energy development project. This project is being packaged by Solarco president Robert Lopez Puckett for presentation to potential investors.
Once operational, the wind farm will be the first of several major clean energy projects envisioned for the province by GRIPP.
GRIPP and its partner, Solarco and the local community have put up 25 wind turbines in Pulupandan town, with a capacity of 50 megawatts.
GRIPP is currently involved in resource assessments and pre-feasibility studies in three potential wind farm sites in Negros .
Solarco president Robert Lopez Puckett is bringing and setting up the windmill technology in Negros and hopes to launch it by January 2007, alongside other alternative fuel initiatives that the company is setting up in the province.
Solarco--currently commercializing solar, wind and micro hydro technologies through education, information dissemination and promotion efforts--provides services like consultations, system design, configuration/integration and installation of solar photovoltaic (PV) panels, wind turbine generators (WTG) and micro hydro power for lighting, water pumping, telecommunications, battery charging stations, refrigeration and such other diverse purposes that can be served by any or a combination of regenerative sources of electricity like sun, wind and water.
“Wind energy will be the next generation’s cheapest source of electricity,“ Puckett said.
GRIPP and Solarco have tapped the services of Halcrow, a British company that has had extensive experience in wind energy in Europe, for the feasibility study of the Negros wind project, Puckett said.
For the feasibility study portion, Solarco and Halcrow conducted wind monitoring and movement assessment and have found the wind incidence in Negros is sufficient to propel the turbines and justify the installation of such windmills, Puckett said.
These data are all computer generated and with the feasibility study completed, we can justify its installation and operation in Pulupandan, Negros island, Puckett said.
“One wind plant can produce 2 MW (megawatt) and with only 25 turbines producing 2 MW each you can energize the entire area,“ the said.
As envisioned, a hectare of land will be set aside to put up the tall (30 stories high) windmill. The wind will be attached to a base of 400 square meters Puckett explained.
Twenty five hectares can house twenty five windmills with distance of 400 meters from each other all running at the same time.

The UK's Mersey river, which is being studied as a possible renewable energy source, begins near Stockport and flows westwards some 70 miles towards the Irish Sea. (Solaraccess.com Photo)

The Mersey river’s strong tides and currents could be used to produce significant amounts of renewable energy in the future, according to a team of experts who have spent the last year evaluating a variety of possible technologies. One option being considered is a modern twist on an energy generating source that has been in use for thousands of years--a waterwheel.
“Waterwheels produce less energy than marine current turbines, but they are robust and require low maintenance,“ said Peter Guthrie, a Professor of Engineering for Sustainable Development at Cambridge University, Solaraccess.com said.
Guthrie is part of the study led by consultants Buro Happold and co-sponsored by Peel Holdings--owner of the Mersey Docks & Harbour Company and Liverpool John Lennon airport--and the Northwest Regional Development Agency (NWDA).
Many of the technologies being evaluated by the team are so new that they are still under development. For this reason, the team is likely to recommend a pilot project that would allow testing before full implementation.
“The whole principle of the study is that the technologies under consideration must be proven, but they would be used in a new environment. We are trying to be innovative and novel but also reduce the risk to a minimum. A staged approach is appealing in terms of speed, practicality and affordability,“ said Guthrie.
While a waterwheel is a novel idea, a more likely option for the Mersey is underwater turbines. According to the study, the Mersey is one of the best locations in the UK for the production of marine renewable energy because of its large tidal range of 8-10 meters and powerful tidal currents.
“We are looking at the type of technologies available for generating electrical power. It has already been established that it is tidal flow and not wave power that would be the most suitable method for the Mersey. There are different schemes that could be utilized, some visible and some hidden. It may be that a scheme will be [tried] initially as part of a wide consultation process,“ said Tim Bownes, chief engineer at Mersey Docks.
The team is due to release its final recommendations next April. It will lay out a shortlist of the two or three most promising technologies as well as the two or three most likely locations on the estuary. The next step would then be for Peel Holdings to take the shortlist of options forward for more detailed consideration.
“The environment, shipping and regeneration have been integral to this study from the outset. Any scheme would have to bring benefits to local people and the local economy, but we must also respect the Mersey Estuary’s importance for wildlife such as wading birds,“ said Guthrie.

Impoverished Myanmar, working with Thailand’s state oil firm, has discovered more potentially rich offshore gas deposits in the southwestern Gulf of Martaban, official media reported on Sunday.
The New Light of Myanmar newspaper said that Myanmar Oil and Gas Enterprise and Thailand’s PTT Exploration and Production (PTTEP) had discovered an estimated 2.5 trillion cubic feet (75 billion square metres) of natural gas in block M-9.
Myanmar, one of the world’s poorest countries and under US and European economic sanctions over human rights abuses and suppression of democracy, is increasingly reliant on revenue from its oil and gas deposits, AFP said.
Energy minister Lun Thi called for the speedy launch of commercial production of the gas, the New Light of Myanmar reported, adding that plans were underway to drill six more wells in block M-9 in 2007.
With the new discovery, block M-9 is estimated to contain 8.0 trillion cubic feet of gas, the newspaper said.
Myanmar Oil and Gas Enterprise and PTTEP, Thailand’s largest exploration firm, began drilling in early December in block M-9 in the Gulf of Martaban, which opens out into the Andaman Sea.
Despite international condemnation and growing frustration at Myanmar’s military regime, its neighbors have been jostling to take advantage of the country’s abundant natural resources.
Natural gas from Myanmar currently accounts for some 20 percent of Thailand’s supply.
That gas comes mainly from the Yetagun field--operated by Malaysia’s Petronas, Japan’s Nippon Oil and PTTEP--and the Yadana field run by France’s Total, US firm Unocal and PTTEP. Both fields are in the Gulf of Martaban.
Myanmar’s oil and gas production has become the largest source of foreign currency earning, according to official figures.