STWR - Share The World's Resources

No subject appears to divide as many people in the climate change arena as biofuels. Their potential to positively impact greenhouse gas emissions is undoubtedly enormous. But the pursuit of such non-fossil fuel energy replacements has raised concerns over the impact on the global food supply -- and the environment itself.

Now they might start sitting up. They wouldn't listen to the environmentalists or even the geologists. Can governments ignore the capitalists? A report published last week by Citibank, and so far unremarked on by the media, proposes "genuine difficulties" in increasing the production of crude oil, "particularly after 2012". Though 175 big drilling projects will start in the next four years, "the fear remains that most of this supply will be offset by high levels of decline".

The economic bubble that lifted the stock market to dizzying heights was sustained as much by cheap oil as by cheap (often fraudulent) mortgages. Likewise, the collapse of the bubble was caused as much by costly (often imported) oil as by record defaults on those improvident mortgages. Oil, in fact, has played a critical, if little commented upon, role in America's current economic enfeeblement -- and it will continue to drain the economy of wealth and vigor for years to come.

Rising prices for cooking oil are forcing residents of Asia’s largest slum, in Mumbai, India to ration every drop. Bakeries in the United States are fretting over higher shortening costs. And here in Malaysia, brand-new factories built to convert vegetable oil into diesel sit idle, their owners unable to afford the raw material. This is the other oil shock. From India to Indiana, shortages and soaring prices for palm oil, soybean oil and many other types of vegetable oils are the latest, most striking example of a developing global problem: costly food.

The government's decision to give the go-ahead for a new generation of nuclear power stations sums up New Labour's fundamental ignorance, short-sightedness and lack of imagination.  When the prime minister says expanded nuclear power is essential to meet an expected energy deficit, and cut carbon emissions and global warming, he is badly misinformed and seriously mistaken.

Delivery of drinking water from the tap is mostly controlled by public utilities in the EU, but fears are being voiced that new policies promoting competition are skewed in favour of giving a greater role to the private sector in this area.

For the briefest of moments this week, the price of oil crossed the historic $100 per barrel threshold for the first time, pushed up by a single eager trader in New York. Fleeting though it may have been – the price dropped almost immediately back down into the high 90s – the crossing of that barrier was the clearest sign yet that the era of cheap oil was over and raised a raft of unsettling questions about the implications for the global economy.