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Oil’s golden years stifled innovation
David Ibison, Financial Times Deutschland
The Norwegian economy will be forced to find new businesses when their oil and natural gas runs out.
For the average Norwegian, these are golden years. In the 1970s its citizens were close to the bottom of inter-national rankings of per capita wealth at about $4,000, but today they are at the top with $35,000 – all thanks to a stroke of geological good fortune that deposited huge wealth under the seabed millions of years ago.
But the trouble with oil and natural gas is that it runs out. Norway’s energy resources in the North and Norwegian seas are already maturing. Oil production is expected to increase until 2011 and then fall gradually, while gas production is expected to increase rapidly until 2013 and then plateau, according to the Norwegian Petroleum Directorate, the government body.
While new deposits in the Arctic will fill the gap, at some point the Norwegian economy must wean itself off energy and find new businesses.
There are preliminary signs this shift could be more difficult than thought – with one credible explanation being that the security of oil wealth has undermined Norwegians’ desire to innovate.
The Organisation for Economic Co-operation and Development points to a “puzzle” about Norwegian innovation, which it says is “low by international standards”.
(11 September 2007)
IEA sounds ‘wake-up call’ on energy savings
With sustained economic growth, the rising demand for travel, homes and leisure in the developed world has led to a 14% increase in energy-use and related CO2 emissions since 1990, the International Energy Agency (IEA) has warned in a new report.
The report, Energy Use in the New Millennium, was published on 10 September as the IEA’s contribution to the 3rd ministerial meeting of the G8 Gleneagles dialogue on climate change and energy currently taking place in Berlin.
It draws a gloomy picture of efforts made by the 26 IEA member countries to control their energy consumption since 1990, the reference year of the Kyoto Protocol on climate change.
“Final energy-use increased by 14% between 1990 and 2004,” the Paris-based agency states in the report. “This increased energy-use fed directly into the level of CO2 emissions, which also rose by 14%.”
Moreover, it says the rate of energy-savings improvements has actually slowed down since the 1970s and the first oil shock, falling at “less than 1% per year” since 1990, a level which it said is about half what it was in previous decades. “
(11 September 2007)
Preparing for the post oil era
Hans J Marter, Shetland News
SHETLAND and neighbouring Faroe Islands are both to spend oil revenues to create an economy eventually independent of oil.
Opening the Energy from the Edge symposium in Lerwick yesterday morning, the Faroese prime minister Joannes Eidesgaard announced that his country would spend at least 10 per cent of its oil revenues to stimulate research to become less reliant of fossil fuels.
The difference is that Shetland has already earned hundreds of millions of pounds from its close relationship with the oil industry while Faroe has not made any significant oil discovery in its territorial waters.
In fact, Faroe Petroleum has only this month received its first ever production income; Â£49,000 from its share in the Minke gas field, in the southern North Sea.
Around 100 delegates from across the North Atlantic fringe will discuss, over the next four days, how sparsely populated areas can respond to the challenges of climate change, rising fuel prices and the need to develop the renewable energy resource to become less reliant on fossil fuels.
(12 September 2007)
Change in political climate must inform green investments
James Murray, Business Green Blog
We might have been forced to listen to nearly two years of the manure of political rhetoric to reach this point, but if the last few weeks are anything to go by the UK could soon see the green shoots of serious political action on climate change.
The first hint that the tenor of the political debate was changing came last month with the Lib Dem’s publication of their strategy for a zero carbon Britain. It might have got somewhat lost in the midst of the media silly season, but for those that read it the report left quite an impression.
It is not hyperbole to describe it as the clearest and most serious-minded strategy for mitigating the risk of climate change yet published by one of the UK’s major political parties.
…However, it looks as if the Lib Dems time in the sun could prove short-lived with the publication this Thursday of the Conservative’s long anticipated Quality of Life report.
Heavily leaked in advance it looks as if the doorstep-sized, 800 page report will also offer a wide-reaching and comprehensive set of recommendations for creating a low carbon Britain.
Despite the risk of a schism with the right wing of the party and its tax-cutting anti-regulation agenda the report’s authors Zac Goldsmith and John Gummer have apparently reached similar conclusions to the Lib Dems, backing carbon taxes and stricter environmental legislation as the best means of stimulating low carbon behaviours.
(11 September 2007)
People scavenge while fatcats get fatter
“Chief Repoter”, The Zimbabwean
HARARE – Amid mounting desperation among the majority of Zimbabweans – unable to secure basic foodstuffs, water or electricity – luxury cars and obscenely expensive facials for the fashion conscious elite are reporting record sales and the few rich are savouring the moment.
“The people who could fix the situation are the ones who are making a fortune out of it,” said Harare economist John Robertson.
President Robert Mugabe’s ruling party elite and their business associates control much of the hugely profitable black market in goods and hard currency. Meanwhile, nearly half of the population will need food aid this year to fend off starvation, according to the UN World Food Program.
Desperate citizens here have become dark-of-night scavengers of coffins, copper electrical cable and even aluminium street signs, now in such shortage that finding an address is a trial.
Zimbabwe’s nights are dark indeed: here in Harare, downtown street lights are turned off for hours on end for lack of foreign currency to pay South African and Zambian power suppliers. If the nights are black, the days often exude an eerie surface calm.
In regular stores the shelves are bare. On the thriving black market, the handful of “dealers” remain bustling and full of goods, though prices rise so fast that any three bottles of Mazoe Orange Crush are likely to bear three different price stickers.
The black market fuel sells for four times the government’s fixed price. It keeps the traffic moving in Zimbabwe at $1,5 million for a 5 litre gallon of diesel.
Nature, terror and oil top US fear list
Rebecca Knight, Financial Times via MSNBC
Natural disasters, international terrorist attacks and a steep rise in oil prices top the list of the biggest near-term risks that concern US business executives, according to a study by Marsh, the insurance broker, that will be released on Thursday
But the one hundred-plus CEOs and senior directors of Fortune 1000 companies surveyed played down the risk of a housing market collapse or a pandemic disease within a decade.
Harvey Pitt, former chairman of the Securities and Exchange Commission, and a council member of Marsh’s newly created Center for Risk Insights, which conducted the survey, called the findings “distressing”.
(5 September 2007)