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OPEC to Put $750 Million Toward Climate Research
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OPEC oil ministers could still decide to modestly boost production at their Dec. 5 meeting in Abu Dhabi, United Arab Emirates, if prices remain very high, but Badri said that there was no point in doing so if new supplies were simply going to go into inventories.
"We will add more oil if we know that the oil will go to the refineries," he said, noting that U.S. refineries were operating at 87 percent of capacity. "But we will not add more oil if it is going to go to stocks."
In addition, several officials including Saudi Arabia's King Abdullah argued that $100 a barrel for oil was a reasonable price when adjusted for inflation. Privately, however, several officials said they wished prices would plunge long enough to discourage investments in alternatives that have become economically viable as oil prices have risen.
OPEC officials also spent a great deal of time discussing climate change.
"Oil-producing countries feel that they are an endangered species in the climate change debate," said Yvo de Boer, executive secretary of the U.N. Framework Convention on Climate Change. De Boer was here to talk to OPEC officials four days ago.
The 1997 Kyoto Protocol, which mandates global reductions in carbon emissions, made special provisions exempting oil-producing countries from emissions targets. Now OPEC is worried that a new international accord could cramp fast-growing Middle East economies, where oil use is rising more than 4 percent a year. And the oil cartel is concerned that a broader cap-and-trade system for greenhouse gas emissions could place heavy costs of petroleum products and reduce consumption.
While declaring its opposition to such plans, OPEC said it took climate change seriously. Saudi Arabia pledged $300 million for research, citing the potential for carbon capture-and-storage technology. Kuwait, the United Arab Emirates and Qatar each promised to give $150 million.
Separately, an explosion took place at a Saudi natural gas pipeline, killing 28 people and injuring many others. Saudi Oil Minister Ali al-Naimi said another dozen people are missing.
The state oil company, Saudi Aramco, said that the explosion took place where maintenance work was being done on new tie-ins for the gas pipeline, about 19 miles from the Hawiyah gas plant. The location is remote, far from the nation's sensitive export facilities. The explosion will not effect oil supplies, Naimi said.
