2006-04-24
                               SOARING oil prices have become a driving force behind the development of alternative energies, said leading energy experts at the Boao Forum for Asia's annual conference on Saturday in Hainan Province.

The closing price of crude oil on the New York Mercantile Exchange skyrocketed to a record of over US$75 per barrel on Friday.

Zhang Guobao, vice minister in charge of the National Development and Reform Commission, said that high oil prices bring about not only challenges, but also opportunities.

It will not only promote investment in world oil exploration and production, but also in alternative energies and energy saving, he said.

Utz-Hellmuth Felcht, chairman and CEO of Degussa AG, agreed with Zhang. He said major international chemical companies including his own are searching for alternatives to relieve the pressure on consumers.

The Energy Policy Act of the United States issued in 2005 aims to increase the annual consumption of fuel alcohol or bio-fuel to 7.5 billion gallons by 2012.

Energy per GDP

Jiro Nemoto, Honorary Chairman of NYK Line, said that as the world's top oil importer, Japan has developed the highest energy consumption efficiency in the world.

Citing the International Energy Agency, Nemoto said if the energy consumption of Japan for producing one unit of GDP is denoted as one, then that of the European Union is 1.6, the United States 2.7, South Korea 3.3 and China 9.

There is still a lot of inefficiency in China's industrial structure and the energy consumption for producing one unit of GDP is off the charts when compared with developed countries, said Zhang Guobao.

But looking at it another way, he said, it also leaves ample room for China to improve its energy structure and efficiency.

China has made great efforts in developing alternative energies, said Zhang. According to him, China's experiments of alcohol-mixed gasoline in northeast and central China have progressed. The NDRC now plans to expand it to other regions.
And the project to refine coal into oil by Shenhua Group Corporation Limited, one of China's largest coal producers, will be completed next year, he said.

Speaking at a meeting on energy development on Thursday, Premier Wen Jiabao called for effective measures to ensure the implementation of the government's energy saving and renewable development policies.

Renewable energy

The meeting also asked major state-owned energy companies to develop renewable energies, said Zhang.

The current oil price has far exceeded its real value, therefore governments and enterprises need to work together to tackle this issue, Zhang said.

"The current price is much higher than it should be, since there is no real crude oil shortage in the world," Zhang said.

The price of crude oil is "likely to climb a little higher" amid concerns about Iran's nuclear ambitions, Zhang said.

Elsewhere, finance leaders from the Group of Seven nations on Friday expressed concerns over soaring oil prices and called on more investment in the production of oil and oil products.

In a joint statement after a closed-door meeting of G7 finance ministers and central bankers, it said strong global economic expansion continues into its fourth year and the outlook remains favorable. But "risks remain from oil market developments, global imbalances and growing protectionism."

"We are strengthening the dialogue between oil producers and consumers to further improve market transparency through the release of more complete and timely data on production, consumption and inventories, and for clear reporting of oil reserves," the statement said.

G7 countries "urge investment in exploration, production, energy infrastructure and refinery capacity" and "remain committed to greater energy efficiency, conservation and diversification, which will improve the balance between supply and demand."

The finance officials also called for more flexible exchange rates to help redress global economic imbalances.

"We reaffirm that exchange rates should reflect economic fundamentals" and "excess volatility and disorderly movement in exchange rates are undesirable for economic growth," the statement said.

"Greater exchange rate flexibility is desirable in emerging economies with large current account surpluses, especially China, for necessary adjustments to occur," it said. Xinhua
source:Xinhua
tag:alternative energy,clean energy,bioenergy