OPEC could lose out in Copenhagen

OPEC Copenhagen Summit

The International Energy Agency (IEA) claim that if the UN strike a deal at the UN summit in Copenhagen next month, which puts a curb on climate change, the OPEC oil cartel could stand to lose $4 trillion.

"Producing countries are very worried about what will happen to their revenues," said IEA chief economist Fatih Birol, who presented the agency's World Energy Outlook report.

"With the current policies in place, OPEC revenue will be about $28 trillion (18.7 trillion euros) between 2008 and 2030 if there is no climate change deal."

"If there is a deal, OPEC revenues will be only $24 trillion."

Limit global temperature rise to 2.0 degrees

The scenario put forward by the IEA is based on an assumption that the concentration of GHGs in the atmosphere would be limited to 450 parts per million, which scientists believe would limit global temperature rise to 2.0 degrees.

The IEA also claim that, if there are no changes made to current energy policies, worldwide demand for oil would come to 105.2 million bpd between now and 2030. But with the limitations suggested by the agency demand would only rise to 89 million bpd.

"The $4 trillion estimate can be seen merely as a postponement of revenue, as more reserves are left under the ground to generate revenue for future generations," said the report.

In an effort to protect their interests, OPEC nations must work together to strike a common position ahead of December's summit.

Reaching any form of deal is unlikely

Angola's oil minister and current OPEC president Jose Maria Botelho de Vasconcelos, vowed last month that the world's major oil producers would "resist any move that would punish their industries."

At the OPEC summit in Vienna he said, "Oil producers must ensure that their interests are properly represented in the post-Kyoto agreement."

Despite President Obama insisting that reaching any form of deal is unlikely, the Copenhagen summit will attempt to seal a new accord to fight climate change after the Kyoto Protocol requirements expire in 2012.

Image source: Middle-East-Online.com

Related Articles:

Kuwait eyes solar to replace oil | Saudi power use keeps growing | Iraq signs mega oil deal

Like this article? Get the RSS feed: