Even with demand in the US stagnating, global demand for oil is booming.

When the price of a barrel of oil briefly hit $100 in trading on January 2, it was basically a nonevent. After adjusting for inflation, $100 per barrel in 2008 still isn’t a record. And really, what’s the difference between $99 and $100? (If you answered $1, come to the front of the class.)
It functioned more as a Rorschach test. For presidential candidate John Edwards, it was “just another example of how corporate greed is squeezing the middle class.“
According to Newsweek.com, American Petroleum Institute spokesperson Karen Matusic noted that oil’s hitting the century mark should spur efforts to “explore for more oil and natural gas. After all, 80 percent of our potential domestic resources are cut off from drilling.“
For Renewable Fuels Association president Bob Dinneen, the event highlighted (wait for it!) the importance of recently passed legislation that subsidizes ethanol production. And for Treasury Secretary Henry Paulson, it was an occasion to marvel at just how well the US economy has held up in the face of such challenges. “When you look at the structural changes in our economy, we’re using oil more efficiently and it has a smaller overall impact on our growth,“ he told Newsweek.
A hundred factors--production disruptions in Nigeria, speculators in Singapore, the pathetic dollar--helped push the price of a barrel of oil to $100 (or roughly what lunch at McDonald’s in London costs, thanks to said pathetic dollar). But it’s safe to say that oil’s breaching three figures was explicitly not due to the venality of ExxonMobil’s bosses, or to our inexplicable hesitancy to drill for methane in the Grand Canyon, or to the lack of subsidies for schemes to process bacon fat into diesel. In fact, it’s becoming evident that it’s not about anything Americans do, or don’t do.
Prices in the market are determined by supply and demand. Even with demand in the United States stagnating, global demand for oil is booming.
“A big part of the oil story has to do with demand globally,“ says Henry Paulson. “There is strong growth in many countries around the world.“ Indeed, according to the World Bank, 104 countries grew at more than 5 percent in 2006--a modern record--and most of them powered through 2007 at a similar pace. Americans may have reacted to higher oil prices by buying smaller cars, but businesses and consumers in Asia, South America and Africa haven’t been deterred in gobbling up oil.
In 2007, according to OPEC, world demand for crude oil rose by 1.4 percent, or 1.2 million barrels per day. But the United States and its fellow industrialized firms in Asia and Europe--the 30 nations that make up the Organization for Economic Cooperation and Development (OECD)--actually reduced consumption. According to OPEC, non-OECD countries accounted for all of 2007’s oil-demand growth.
Obviously, China has a lot do with it. Its consumption of crude oil rose from 5.6 million barrels per day in 2003 to 7.6 million in 2007. Thanks in part to China’s growth, Asia in 2004 surpassed the United States as the largest consumer of oil in the world, according to Daniel Yergin, chairman of energy analyst Cambridge Energy Research Associates.
But demand is booming elsewhere, especially in the Middle East. The nations that have grown rich on petrodollars aren’t just spending money on champagne and lavish hotels on the French Riviera. They’re plowing cash into diversifying economies, building things that use lots of energy--condominium towers in Dubai, an indoor ski resort in Bahrain and petrochemical plants in Kuwait and Saudi Arabia.
In the past, OPEC could calm oil markets by increasing supply. But OPEC members are now eating a lot more of what they grow. Between 1997 and 2007, notes Yergin, six Mideast OPEC members--Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates--boosted production by 2.5 million barrels per day. But they increased consumption by 1.9 million barrels per day. In effect, three quarters of the production increase stayed in the region.
The trends that boosted demand in 2007 are still intact. OPEC projects that in 2008, world demand for crude will rise by 1.3 million barrels per day, but that non-OECD countries will account for 1.1 million barrels per day, or 80 percent of the total. China alone is expected to boost consumption by 400,000 barrels per day. Lehman Brothers analysts project that this year OPEC countries will increase their use of oil by 350,000 barrels per day, or 4 percent.
It’s beyond our control. Using less gas, running factories at fewer shifts and redoubling efforts to conserve and find alternatives may save us some money. But it won’t result in lower prices at the pump. Daniel Gross

Indian grass and other native plants can offer both habitat for wildlife and a source of biofuels.

Once a year, the Minnesota Department of Natural Resources (DNR) brings together the people most involved in the issues surrounding hunting and fishing. Usually this gathering concentrates on predictable topics but this year the meeting in St. Cloud, is taking on the issue of bioenergy.
It wouldn’t seem that bioenergy has much to do with hunting and fishing in Minnesota, but that’s not the way the state
Department of Natural Resources sees it, Minnesota.publicradio.org reported.
DNR officials sense that bioenergy will be a big part of Minnesota’s future. More land will be used to raise crops to create renewable energy and the DNR wants to make sure that doesn’t hurt the state’s environment and wildlife habitat.
Conservationists should have a say in how the future of bioenergy plays out in the state, according to Steve Hirsch, with the DNR’s ecological resources division.
“Are we going to be at the table and help direct this, so we can have mutual benefits for fish and wildlife while we try to solve some of our energy needs, or is it going to be done without us at the table with no concern for conservation?“ Hirsch asks. “That’s why we’re trying to get very involved with this issue.“
A major push from the conservation-minded is to invest more in researching the use of grasses, like switch grass and prairie grass, instead of corn to make ethanol.
Jim Kleinschmit, with the Institute for Agriculture and Trade Policy in Minneapolis says a field of prairie grass creates a home for wildlife, a filter for run off and doesn’t require the fertilization needed to grow corn.
“We know how to grow grass, we know how to turn it into energy, and we know it also sequesters carbon underground and it creates habitat, and cleans up water quality. Now we’re talking about taking that plant material and growing it commercially on farms. It’s a great win win if we take into account those multiple benefits,“ says Kleinschmit.
Prairie grassKleinschmit says if society puts a dollar figure on the conservation of wildlife habitat and clean water, then using prairie grass for energy production will win out over corn.
He acknowledges it will take years for farmers to make the transition from a crop like corn to raising prairie grass as a source of energy.
Farm Bureau representative Paul Stark farmers says while farmers are concerned about the environment and the impact that crops have on the soil and water, the one thing that drives what they grow is profit.
“Farmers will produce whatever they can to make a profit. Farming will no continue as it has in the past 40, 50 years,“ Stark says. “We’ve had cheap energy, we’ve had cheap inputs, we’ve had cheap labor, we’ve had cheap whatever, and now we’re really getting down to the nitty gritty where we make run out of energy as we know it and we will produce something needs providing it’s profitable.“
Stark says while some older farmers are interested in raising new crops for energy, it’s the next generation of farmers who may fully embrace their role providing the country with cleaner energy in the future.

The Philippines should step up the development of renewable energy sources not only to lessen the country’s dependence on imported oil but also to show that it is taking steps to counteract global warming.
Environmentalists and legislators made similar statements as they pressed for the immediate passage of the Renewable Energy Act that will set in place measures for harnessing wind, solar, biomass and even ocean waves as alternative power sources, Manilastandardtoday.com reported.
Their statements were made amid warning by climate scientists that developing countries such as Philippines are “the most at risk“ from the ill effects of climate change.
In a recent report, the Philippines topped the list as the country most affected by climate change in 2006 due to extreme weather disasters. The rise in sea level due to climate change is also projected to flood more than 1,000 coastal municipalities and cities in the country, including Manila.
Greenpeace Southeast Asia said the approval of the Renewable Energy Act will be the country’s first important contribution to the global efforts to combat the grave impact of climate change which threatens to put the future of millions of Filipinos at risk.
In a statement, the environmental group asserted that the proposed law should contain strong mechanisms and ambitious targets so that it can catalyze the shift away from the country’s still heavy dependence on fossil fuels and pave the path for the massive uptake of renewable energy solutions.
“While the Philippines’ wind energy potential is estimated to meet seven times the country’s total energy demand and the country’s solar energy potential also possesses one of the highest efficiency ratings in the world, renewable energy technologies such as wind, solar and modern biomass today represent less than 0.2 percent of the overall Philippine power mix,“ Greenpeace said.
Senator Juan Miguel Zubiri, author of the Renewable Energy bill, said the development and commercial production of indigenous, renewable energy sources is “the only way we can get off this wild ride of rising oil prices that directly affects prices of electricity, transport and staple food items.“
“Renewable indigenous energy is independent of supply and price movements of imported oil. It will be our long-term salvation from galloping oil prices,“ Zubiri said.
But Senator Miriam Defensor Santiago, chairman of the Senate committee on energy, is confident that the Senate will be able to pass the bill within the first two of three weeks after the resumption of the regular session of Congress late this January.
Santiago said she expects smooth sailing for the bill in the plenary session. She pointed out that a similar measure had already been passed by the Senate last year, but its effort was put to waste because no final action was taken by Congress on this long-overdue legislation.
The Renewable Energy Act will complement the Bio-Fuels Act which had been enacted into law by Congress last year. The Bio-Fuels Act provides incentives for the development, production and use of plant-based or green fuel such as ethanol (from surgarcane, cassava, potato and other plants), coco-diesel and jatropha.
Zubiri, principal author of the Bio-Fuels Act, pointed out that although the Philippines is the world’s second largest producer of geothermal power and a leading producer of hydro-electric power, the country remains a prey to volatile oil prices because it still depends on imported oil for about half of its total energy requirements.
Citing data from the Department of Energy, he said the installed capacity for renewable energy in the country is derived from the following sources: geothermal, 1,131 megawatts; hydro, 5.468 MW; wind, 417 MW; bio-mass, solar and ocean waves, 131 MW or a total of 9,147 MW.
In 2006, the country imported a total of 100.8 million barrels of oil at a cost of $6.8 billion or 2.66 million barrels less the 103.46 million barrels imported in 2005 worth $5.7 billion.