As a group, OPEC's 13 members are the only producers capable of raising their output in a meaningful manner.

After a year of dizzying gains for energy markets, a rapid fall in oil prices lately is posing a dilemma for OPEC.
Oil prices approached $100 a barrel just two weeks ago, but fears of slowing economic growth have since pushed them down by more than 10 percent. Oil futures closed at $88.71 a barrel, down $2.30, on Friday, after their steepest weekly decline in more than two years, International Herald Tribune reported.
Oil markets have become increasingly volatile and unpredictable this year, with large swings that analysts have attributed to financial speculation than on market fundamentals. But the price surge in recent months seemed increasingly at odds with the outlook for the economy.
The biggest fear for oil producers now is that a slowing economy might crimp oil demand and send prices spiraling down.
The Organization of Petroleum Exporting Countries will meet in Abu Dhabi this week to set output levels for the winter amid much uncertainty.
Today’s sky-high prices make many OPEC members uncomfortable because they could reduce consumption. But producers are also unsure whether they need to boost their output, since doing so at a time when the economy slows might hasten a sharp price drop, which is what producers fear most.
“The economic situation has finally dawned on the energy markets,“ said John Kilduff, an energy industry analyst at MF Global, a brokerage of exchange-traded futures and options. “OPEC is right to be concerned about falling into a production trap if they respond too aggressively.“
One option that will be discussed at the meeting is a possible increase of 500,000 barrels a day in the group’s overall output, which now stands at about 30.6 million barrels a day. Some OPEC members, including Nigeria, have voiced support for such a move.
But Saudi Arabia, the organization’s de facto leader, signaled in the past week that markets were well supplied with oil. This assessment suggested that the kingdom would not back a raise in production.
“It’s a very fine line they are trying to tread,“ said David Kirsch, an analyst at PFC Energy, a consulting firm in Washington.
“They really have to be concerned about the downside risks to the market. The big fall in prices really took a big production increase off the table. It confirmed that the fundamentals do not support high prices.“
As a group, OPEC’s 13 members are the only producers capable of raising their output in a meaningful manner. Together, they now have about 2.5 million barrels a day of spare capacity, according to analyst estimates, mostly in Saudi Arabia.
This gives Saudi Arabia, the world’s top oil exporter, the most clout to set the tone within OPEC. OPEC’s members account for 40 percent of the world’s daily oil exports.
Some OPEC insiders are particularly concerned about the risks associated with slowing demand next year, especially with the credit and housing market crisis in the United States.
Oil demand is expected to grow 1.5 million to 2 million barrels a day next year. At the same time, new supplies are slowly making their way on the market. New oil and natural gas liquid production from OPEC nations could reach 2 million barrels a day next year, and an additional 1.1 million barrels a day are expected to come from non-OPEC sources, like Russia or Norway, according to estimates by Deutsche Bank.
Some OPEC specialists say these factors could substantially alter the balance between supply and demand after years of market tightness.
In that environment, Saudi Arabia is wary of increasing supplies this winter, especially because its oil minister, Ali al-Naimi, has said that oil prices and market fundamentals were out of step.
“There is absolutely ample supply,“ Naimi said at a recent conference in Singapore. “The price movement has nothing to do with the fundamentals of the market.“
At a recent meeting in Riyadh, OPEC leaders cited a variety of reasons oil prices had spiked beyond control. Those included a weak dollar, refining shortfalls in the United States, runaway demand in Asia and speculative investments in commodities.

One of the most significant factors challenging Africa’s economic growth and productivity is inadequate access to energy.
This is according to World Bank vice-president Obiageli Ezekwesili, who states that this challenge is illustrated by the fact that only 25% of the African population, which currently numbers 900-million, has access to electricity.
Apart from the social and economic implications this challenge presents, Ezekwesili believes that the lack of energy capacity is inhibiting further foreign investment on the continent, engineeringnews.co.za reported.
Consequently, the expansion of Africa’s energy capacity is fundamental to ensuring continued investment and economic growth across the continent, believes the World Bank.
The generation of hydroelectricity is the main nonfossil-fuel source of energy currently being developed in Africa, primarily owing to the fact that it is cheaper and cleaner than fossil-fuel-based energy.
Africa has huge and untapped rivers, including the Nile, Niger, Congo, Senegal, Orange, Limpopo and Zambezi rivers, which are suitable for hydroelectric plants.
The continent has a maximum potential of 400,000 MW of hydrogenerated energy; how- ever, it only uses 7% of this potential at present.
Addressing delegates at this year’s Corporate Council on Africa’s US-Africa Business Summit, Ugandan President Yoweri Museveni emphasised the importance of hydropower as an alternative and more sustainable source of energy.
Museveni stated that, with the rising price of crude oil and other fossil fuels, it was essential that Africa find a more inexpensive and durable source of energy, such as hydro-power.
Uganda is currently pioneering the development of hydroenergy capacity in Africa, which is illustrated by the development of the country’s flagship 250-MW Bujagali hydroelectric power plant at Bujagali Falls, 8 km north of Lake Victoria.
Another project is the Karuma hydropower project, which will entail the construction of a 200-MW hydropower plant, about 3 km upstream from the Karuma bridge in northern Uganda.
In addition, with the help of the World Bank, the Ugandan government has established the Fourth Power Project, which aims to improve power supply through the installation of two 40-MW generating units at the existing Kiira hydropower station.
It has also been reported that the Japanese government is to construct small hydropower projects in Uganda, especially in rural areas.
Owing to the fact that hydroelectric projects require heavy financing and considerable planning, Museveni is actively encouraging foreign investment in the African energy sector.
In addition, Museveni has encouraged international investors to visit East Africa, where the continent’s pioneering hydropower projects, as well as its development potential, are showcased.
Another African country that is particularly encouraging foreign investment into the hydro-energy sector is Madagascar.
Madagascan Economic Minister Ivohasina Razafimahefa explained that the country’s energy sector was considerably underdeveloped, with only 15% of the population having access to electricity.
Further, the existing energy infrastructure is heavily dependent on fossil fuels, particularly oil, which is driving up the cost of electricity.
Razafimahefa added that Madagascar had hydropower potential of 7,800 MW but that only 150 MW was being developed.
In addition to hydropower, the country aims to exploit other renewable energy sources, such as biofuel and wind power, stated Razafimahefa.
However, owing to the high cost of such projects, Razafimahefa said he had invited foreign investors, particularly from the US, to invest in sustainable energy projects on the Indian Ocean island.
Thus, Ezekwesili concluded that development of Africa’s energy capacity is dependent on foreign investment and that opportunities do exist if the private sector collaborates with African governments in the development of sustainable energy projects.

A man views solar panels on a roof at Google headquarters in Mountain View, California, June 18, 2007.

Google announced last week that it is entering the renewable energy arena. RE Coal is the world’s least expensive source of energy, the most widely used and of course the single most troublesome emitter of greenhouse gases.
According to Green Energy News, initially RE Google’s philanthropic arm,Google.org, will also work with RE Google also expects to make money at this, eventually, too.
The question is why. Why does Google want to step beyond the cyber information and media world to the rough and tumble world of energy?
On the surface the answer is simple, because it can, and it wants to.
But it’s more than that. It’s because it’s in a unique position to do so.
Google is willing to cause a little disruption within the industry, including its own. Getting involved in a disruptive industry - renewable energy--seems a perfect match. If Google can sell energy cheaper than coal then they would certainly be disruptive.
Google has deep pockets. Google can close its doors to special interests. Whereas Washington--and by extension, various branches of the federal government--and to some extent a few state governments--are trying to shape our energy future. But special interest is working hard to shape government in pursuit of profits.
But Google doesn’t have to return phone calls when the coal industry wants to talk. Google has its version of what’s right for the nation, the planet.
Like many companies now, Google is concerned for the future of the planet. Other programs within Google and Google.org make that obvious. It’s Specialized / Google Innovate or Die contest for pedal-powered machines is one example.
Another is Google.org’s RechargeIT Initiative to accelerate the adoption of plug-in hybrid electric vehicles and vehicle-to-grid technology.
Finally, and most importantly, Google believes that the solutions, the innovations to solve our problems, are most likely already out there, either developed but not recognized as such, or still in the deep recesses of someone’s mind. And who else would be able to find this information? Google, in the endless pages of the World Wide Web which in some ways it governs.
Those ideas might be within a government laboratory or a white paper it has produced and published on the web; or stashed in the archives of the some nation’s patent office for a deep search to find. But just as likely some small company or inventor, working out of his or her garage workshop has some answers. Google could find them.
When somebody wants information they usually begin with Google. For Google to find information they need only to search themselves. Somewhere in cyberspace there are some answers to save the planet. With RE

Had Vladimir Putin written Karl Marx’s “Das Kapital,“ he would have named it “Die Energie.“ If we are to characterize the modes of production of past eras as “labor-dense“ and “capital-dense,“ the future mode of production is certainly going to be an “energy-dense“ one.
With emerging economies like China and India having a higher ratio of increase in energy consumption to increase in gross national product than developed nations, the world is certainly leaning towards a “third-generation Cold War,“ where new maps of zones of influence will be drawn according to what lies beneath the soil and cross-border energy transfer lines will increase the mutual dependence of world economies, Today’s Zaman reported.
Energy is as fluent as information and ideas (in fact information and ideas become fluent and influential through energy) and end-consumers never realize their dependence on a remote natural gas source or a distant power plant. With that level of fluency, energy issues penetrate into domestic, international and global policymaking processes. That Iran is as indispensable as it is for Turkey (and China by the way) is to a great extent thanks to its energy sources. If Russia is enjoying a second life after its almost complete demise, if China is so willing to cooperate with Sudan and Angola, if the Americans are turning so Nigerian and if Turkey’s border with Iraq means neighboring Americans, what miraculous word other than “energy“ can explain it all?
Ankara “is“ (a wishful stress) aware of this paradigm shift. In this world of energy-centric hegemonies and polarities, you have two-and-a-half options: Either you are energy rich and adored and hated by everybody at the same time or you are energy poor and your share is to adore and hate. The “half“ option is to become an energy corridor and bridge the subjects and objects of this hateful adoration.
Turkey has always been fond of being a bridge. But in certain cases the other end of the bridge may fail to land anywhere meaningful. It is a cheerful fact that Turkey is regaining its strategic importance, lost after the fall of the Eastern Bloc, by becoming an energy corridor between the energy-rich Middle Eastern and Caucasian counties and energy-hungry Europe.
But what if Turkey itself needs to absorb the bulk of the oil and gas that passes through its lands? What if, as an “almost developed“ industrialized country, Turkey cannot feed its own factories and households?
The solution to this already at-the-door challenge requires no invention. Turkey is comparatively rich in terms of hydroelectric potential; its coal mines are still waiting to be utilized; it is one of the rare countries with strong winds and a sunny climate complementing each other to form a stable energy supply; and there are unexploited oil and gas resources in the eastern Mediterranean, the eastern Black Sea and the central Aegean Sea regions. All these necessitate political determination, economic feasibility and social harmony to be realized.
It is true that Turkey can further utilize its rivers, but it is also true that certain legal issues are acting as stumbling blocs against private and foreign capital interested in building hydroelectric dams. Naturally rivers pass through forest areas and the existing legal framework, which, by the way, was never used in cases of public-owned dam construction, prevents privately owned dams on forested areas.
Solar energy plants are much more feasible for south and southwestern Turkey, where energy transfer lines are built for domestic use only and are not suitable for high-voltage transfer. Wind-powered energy plants have to cope with similar problems in the Northeast and have an added security consideration in the East. These may sound like technical issues, but Ankara bureaucrats have been lobbied for years now on how to eliminate those technical barriers and no meaningful solution has yet been formulated. Ankara needs to shift to an energy-centric policy paradigm in order to be a real bridge and not a bridgehead.