Howrah News Service -  Latest news and headlines on Howrah,West Bengal and World: G8 meets as oil hits $139

G8 meets as oil hits $139
================================================================================
newsbyte on 08 June, 2008 03:36:19
 
By Osamu Tsukimori and Chikafumi Hodo
Aomori (Japan)
June 8: Group of Eight energy ministers looked inward for solutions to record
oil prices on Sunday, touting the need for domestic efficiency rather than
piling pressure on a resistant Opec to pump more crude.
Oil prices posted their biggest ever one-day surge on Friday, leaping more than
$10 to a record high above $139 a barrel.
Soaring oil costs dampen global economic growth, worsen inflationary pressures
and raise the risk of more protests by fishermen, truck drivers and others whose
livelihoods are under threat.
Caught between mounting popular discontent at home and the need to invest
billions in greener energy to cut world carbon emissions, the G8 ministers
offered few new ideas for heads of state to consider at their summit next month.
"(On) energy efficiency and energy diversification, we all recognise that
tremendous progress is being made but more has to be done," said Mr Gary Lunn,
Canada’s natural resources minister.
In a group ranging from top oil consumer the United States to the number two
exporter Russia, few had expected the meeting to result in measures that could
stem oil’s six-year rally, which has gathered pace this year as investors fear
the world will struggle to produce enough crude to meet demand in the decades
ahead.
However, their message appeared to reflect a growing acceptance that consumer
nations must find ways to temper their own demand by focusing on technology,
conservation and diversification rather than hounding Opec to pump more oil, as
Australia’s Prime Minister urged earlier in the day.
The group of G8 ministers plus non-G8 guests China, India and South Korea,
which together consume two-thirds of the world’s energy, said they shared
"serious concerns" over the cost of oil.
Analysts said they were on the right track.
"This is the right development and this will improve the supply and demand
balance in the medium and long-term, but it won’t have an immediate impact on
prices," said Mr Toshinori Ito, senior analyst at UBS Securities Japan.
"Oil prices are surging not because of a supply shortage, but because of
massive liquidity," Mr Ito said, referring to the influx of financial funds into
markets, helped by low interest rates.
The G8 comprises the United States, Britain, Canada, France, Germany, Italy,
Russia and Japan.
Oil has doubled in a year and risen 44 per cent since January, forcing
developing countries such as Indonesia and India into unpopular fuel prices
rises while richer nations ponder how to soften the blow of soaring energy costs
for the vulnerable.
South Korea on Sunday became one of the first countries to cave in to public
pressure, announcing a $10 billion one-year handout to help 14 million
low-income earners.
The issue is certain to hang over G8 leaders when they meet in Japan early next
month, a summit where host Japan hopes to win backing for a target to cut down
carbon emissions to half by 2050.
The energy ministers agreed on the need for more large-scale carbon capture and
storage (CCS) projects that bury emissions from power plants, a cornerstone of
the International Energy Agency’s call for a $45 trillion energy "revolution".
"The time for talking is over. We have to implement this," British business
minister, Mr John Hutton, said in an interview, referring to the IEA goals.
The IEA report released on Friday, commissioned by G8 leaders three years ago,
said the world would need to effectively "decarbonise" the power sector by
building dozens of billion-dollar CCS plants over the next 40 years, although
world governments remain at odds over who should foot the bill. — Reuters