Saudi Arabia’s decision to pump more oil than it has in nearly 30 years risks being completely negated by the sharp drop in output caused by attacks on production facilities in Nigeria.

Nigeria now pumps less than 1.5m barrels a day, its lowest level in 25 years, rather than the 2.5m b/d it has the ability to produce, according to officials attending Sunday’s high-level meeting in Jeddah, Saudi Arabia.

Sunday’s hastily convened conference of consumers and producers, as well as energy ministers and oil company chief executives from around the world, was likely to be seen as a disappointment because it yielded little more than had been expected from the world’s largest exporter in spite of global concerns that developing countries were cracking under the burden of record oil and food prices.

Oil prices moved $1 higher to $136.42 on Monday as rising tension between Iran and Israel and attacks by militants on oil facilities in the Niger Delta added to the uncertainty.

For long Africa’s largest producer, Nigeria recently fell to second place, behind Angola, crippled by attacks by militants. On Thursday a Chevron pipeline was hit, curbing its output by 120,000 b/d next month, and Royal Dutch Shell said it could not promise to deliver 225,000 b/d for June and July after a raid on its Bonga field.

Militants in Nigeria’s southern Niger Delta, whose campaign of sabotage has sharply cut the country’s oil output, announced a ceasefire on Sunday but stopped short of agreeing to participate in peace talks.

Saudi Arabia confirmed it would pump 9.7m barrels a day next month, an increase of 200,000 and the highest level in nearly 30 years, as it repeated its standard offer of extra barrels if customers demanded them.

The kingdom also reiterated its promise to expand production capacity, noting that it expected to achieve 12.5m b/d next year and could add an additional 2.5m barrels if needed after that with a massive investment programme.

Ali Naimi, Saudi Arabia’s energy minister, said in a speech: “This will enable us to maintain our spare capacity in the interest of global market stability – which is in everyone’s interest.”

Saudi Arabia’s spare capacity is now estimated at 1.5m b/d, the lowest in a generation, but as it pumps more oil into the market, that cushion shrinks. The fear that the kingdom’s extra oil might not be enough is one element that drove oil prices to a record $139.89 last week – double what they were a year ago.

The communiqué issued at the end of the conference broadly touched on all the main issues raised by both consumers and producers, from the need to improve the transparency and regulation of financial markets to the need to increase investment in upstream and downstream projects. But it provided no solid details. A follow-up meeting is expected to be held in London before the end of year.

Robert H Laughlin, of MF Global in London, said oil ministers had attempted to put a brave face on the outcome of the summit. “I fear this may turn out to be an understatement especially when you take into account the recent losses from Nigerian production which wipes out any fresh oil offered by the Saudis,” Mr Laughlin said.

Even as Gordon Brown proposed a “new deal” between oil producers and consumers, the outlook worsened in the dirty market for crude – a short-term world of crises, logjams, turbulence and market speculation.

In the Niger delta, an oil pipeline operated by Chevron was blown up yesterday, and an offshore oil platform was attacked by rebels last week. Nigeria, an Opec state, has probably lost a third of production.

This wipes out what gain might emerge from King Abdullah’s promise of more oil from Saudi Arabia, even assuming that the market wanted his barrels. The truth is that the world doesn’t need the extra Saudi crude. It’s the wrong sort of oil – too sulphurous and viscous for refiners trying to produce more petrol, diesel and jet fuel. The world wants “light crudes” such as the UK’s Brent or Nigeria’s Bonny Light, but these are in short supply.

Oil is a market; not, as the Prime Minister seems to assume, a game played by politicians. Behind the pomp of Opec’s ministerial meetings is a souk in which hard-edged salesmen manoeuvre for commercial advantage and angle for market share.

If Mr Brown came to Jedda hoping to make a deal, he appears to have forgotten that, in commercial negotiations, each party must have something to offer. He came with nothing. Instead he suggested that Opec states invest some of their wealth in nuclear power and renewable energy in Britain. In other words, Opec should invest billions in reducing demand for the cartels’ only product – a proposal tantamount to asking British American Tobacco to invest in nicotine patches.

OPEC member Kuwait will increase its oil output by 300,000 barrels per day starting mid-2009, the official state news agency KUNA reported, citing Oil Minister Mohammad Al-Olaim.

Olaim "affirmed... that Kuwait is capable of increasing its oil output (currently) but wondered if the market needed that increase", KUNA reported.

Kuwait will spend $55 billion on oil projects over the coming five years, Olaim said without specifying whether the money would be allocated for production capacity expansion or other projects.

WASHINGTON - Crude oil production from non-OPEC countries will not be able to keep up with growing global demand in the next few years, forcing oil consuming nations to rely more on the Organization of Petroleum Exporting Countries for supplies, the U.S. Energy Information Administration said Wednesday.

In its long-term energy forecast, the EIA lowered its estimate of non-OPEC oil production in 2010 to 51.8 million bpd, down 1.1 million barrels per day from last year's forecast. For the same period, OPEC oil output was cut by just 400,000 bpd to 37.4 million.

OPEC member countries are expected to invest in incremental production capacity, so their conventional oil output will account for about 43 percent of total global production through 2030, the EIA said.

Meanwhile, world oil demand in 2010 will be 1.5 million bpd less than previously thought at 89.2 million bpd, due to higher oil prices, the EIA said.

China will account for almost half the lower oil consumption, with the country's oil use cut 600,000 bpd to 8.8 million bpd. The EIA said its forecast for India's oil demand in 2010 was unchanged at 2.7 million bpd.

Overall, world energy consumption is forecast to grow 50 percent by 2030, with demand from developing countries rising 85 percent compared with a 19 percent increase in industrialized countries, the EIA said.

"We see strong growth in energy consumption," said Guy Caruso, who heads the EIA. "The vast share, majority of that growth will be in the emerging markets," particularly in Asian countries like China and India, he said.

Caruso said most of the growth in energy demand will be in transportation fuels since consumers in developing countries will likely purchase more vehicles.

The EIA said its new international outlook is based on the future oil prices it predicted last summer in the agency's U.S. long-term energy forecast. The agency said much higher prices in the long run would reduce forecast global oil demand by 13 million bpd in 2030.

"We do think that over the next 5 to 10 years the high (oil) prices will bring on new supplies that will put downward pressure on price. But we're not going back to the historic prices we saw in the 1980s and 1990s," Caruso said.

Saudi Arabia will remain the world's biggest oil producer in 2030, but just barely, with expected output of 13.7 million bpd. That's way down from the 16.4 million in Saudi production the EIA forecast in last year's report.

Russia's output is forecast to be 13.5 million bpd in 2030, up sharply from last year's EIA forecast of 11.5 million bpd.

"We're very optimistic about Russia's potential," Caruso said.

However, Saudi oil production in the short term will be higher than forecast last year, averaging 10.5 million bpd in 2010, up 1.6 million bpd. Russia's output is also expected to be up, by some 200,000 bpd, to 10.2 million bpd in 2010, the EIA said.

The EIA is the statistical arm of the Department of Energy.

China, the world's second-biggest oil-consuming nation, unexpectedly raised gasoline and diesel prices by at least 17 percent and increased power tariffs to rein in energy use, potentially driving up inflation.

The record price increase, the first since November, may ease refining losses at China Petroleum & Chemical Corp. and PetroChina Co., who have been forced to sell fuels below cost. The companies' shares rose in Hong Kong trading.

Crude oil futures fell the most in 11 weeks in New York yesterday on speculation the increase, earlier and larger than analysts had forecast, will cut demand. China will pay 19.8 billion yuan ($2.9 billion) in subsidies to help farmers, fisherman and public transport operators cope with higher costs.

"This pushes inflation up in China but contributes to easing inflationary pressure elsewhere in the world," Merrill Lynch & Co.'s head of global commodities research, Francisco Blanch, said by phone yesterday.

Gasoline will increase 17 percent today, diesel will rise 18 percent and jet fuel will climb 25 percent, the National Development and Reform Commission said yesterday. On July 1, China will raise power prices by an average 4.7 percent and cap thermal coal prices until the end of this year.

The price increases may boost China's inflation rate by as much as 1 percentage point this year, according to seven economists surveyed by Bloomberg News today. Their estimates of the likely boost to consumer prices ranged from 0.13 percentage point to 1 percentage point.

Jeddah Meeting

The decision follows similar increases in India, Malaysia and Indonesia and comes before oil suppliers and consumers meet in Jeddah, Saudi Arabia, on June 22 to discuss the 94 percent gain in crude oil prices in a year.

After the increase, official Chinese diesel and gasoline prices remain below $3 a gallon, a discount of more than $1 to unregulated prices in Singapore, Lehman Brothers Holdings Inc. said in a report.

The average U.S. price of regular unleaded gasoline was $4.07 a gallon on June 18, according to the American Automobile Association. Gasoline in India costs about $4.44 a gallon.

China's gasoline prices remain 31 percent below international import parity, diesel 38 percent below and jet fuel, 30 percent, Goldman Sachs Group Inc. said in a report.

Transportation Costs

Transportation costs, including bus and taxi fares, won't rise, the commission said. The government will pay subsidies to transport operators, fisherman and farmers, the finance ministry in Beijing said today.

The government wants to ease the impact of more expensive fuel in a nation where just 3.3 percent of its 1.3 billion people own cars.

Sinopec, as China Petroleum, Asia's largest refiner, is known, rose as much as 5.9 percent in Hong Kong. PetroChina gained as much as 5.8 percent.

The price increase came earlier and was bigger than expected, said Goldman, which had expected China to wait until Sept. 1, after the country hosts the Olympic Games. Lehman Brothers described it as "Beijing's surprise."

The increases are China's largest ever, said Gong Jinshang a senior researcher at China National Petroleum Corp., the nation's largest oil company.

Benchmark oil prices in New York dropped $4.75, or 3.5 percent, yesterday, the biggest decline since March 31. Oil, which traded at $132.05 a barrel at 11:17 a.m. in Beijing, touched a record $139.89 on June 16.

May Boost Demand

Some parts of China have experienced fuel shortages and rationing, and the price increases would improve domestic supplies, the commission said.

Higher oil-product prices may encourage rather than trim demand, Goldman said. "We would argue the price hike could lead to normalization of supply versus the recent rationing of sales at the pump."

Refineries have cut output to avoid widening losses caused by the state price caps. Crude oil processing fell 1.1 percent from a year earlier in May, the statistics bureau said this week.

Electricity prices for households, farmers and chemical fertilizer producers won't rise, nor will tariffs in areas worst affected by last month's earthquake, including the provinces of Sichuan, Shaanxi and Gansu, the commission said yesterday.

The May 12 earthquake that struck southwestern China was the nation's most powerful in 58 years. The temblor disrupted transportation links and power supplies and killed about 70,000.

Energy Curbs

China must cut energy use by at least 5 percent for every unit of gross domestic product annually for the next three years to meet its 2010 target, Yang Tiesheng, director of the commission's energy efficiency division, said at the Energy Efficiency Asia conference in Beijing yesterday.

China has scope to raise fuel prices further, the nation's largest investment bank said.

"After today's increase, there is still 60 percent room for China to further raise domestic fuel prices to move in line with the international levels," China International Capital Corp. economists including Ha Jiming said in a report. "China should raise fuel prices by a further 30 to 40 percent in order to ensure normal margins for its refineries."

America's seemingly never-ending demand for oil appears to be abating as a direct result of the surge in prices.

Data from the US Department of Energy revealed a large build-up in oil inventories in the last seven days, knocking more than $5 off the price of a barrel of oil at one stage.

The new figures showed that US crude oil stocks rose by 800,000 barrels last week, four times the amount expected by a consensus of analysts' forecasts, and reversing five straight weeks of declining supplies.

America is the world's largest energy consumer and there are indications that record prices are impacting demand and helping push prices lower.

The price of a barrel of crude oil was down $3.83 at $133.17 in lunchtime trading on the New York Mercantile Exchange. In London, Brent crude was down $3.29 at $133.17.

Citigroup energy analyst Tim Evans said that the build-up in crude oil stocks was a surprise.

He said: "The combination of weak product demand and the build in crude should be bearish overall."

BP should have seen strife coming, but more pressing is the exhaustion of fields on which we've come to depend, says David Strahan

It must be lonely being Tony Hayward. As the oil price continues to soar, there is a gathering consensus that global production of the black stuff is nearing fundamental geological limits. Yet BP's chief executive continues to argue valiantly that the causes of the current oil shock are "not so much below ground as above it, and not geological but political".

Since his company's Russian joint venture, TNK-BP, is under ferocious assault from both its Russian shareholders and the Russian state, Mr Hayward can be forgiven for thinking the industry's problems are man-made rather than natural. But this is a false distinction, and closer analysis suggests BP's predicament is itself evidence of looming geological constraints to global production, or "peak oil".

On the face of it, BP's problems in Russia are entirely above ground, even if the company claims its tormentors are far from above board. TNK-BP is owned 50:50 between BP and AlfaAccessRenova, a consortium of Russian billionaire tycoons led by Mikhail Fridman. The two sides are now locked in a vicious dispute. BP claims the Russians are trying to seize control; the oligarchs insist they are only defending their rights. Last week Mr Fridman said the British company's allegations were "in the best traditions of Goebbels' propaganda".

Wherever the truth lies, there is not much doubt how the dispute will end. The Russian shareholders have resorted to law both in their own country and Sweden, but the real pressure on BP comes from the state. In recent months TNK-BP has been subjected to raids by the FSB security service investigating claims of industrial espionage, along with the launch of an environmental probe into its largest oil field. Meanwhile, the company's BP-appointed chief executive has been questioned by the interior ministry over alleged corporate tax evasion, and summonsed by the Moscow prosecutor's office over suspected labour code violations.

It all seems wearily familiar. In 2006 Gazprom, Russia's state-owned gas giant, took control of Shell's Sakhalin 2 project after a campaign of official harassment by environmental agencies. And last year TNK-BP was forced to sell a majority stake in its plum Kovykta gas field in east Siberia, also to Gazprom, after government claims that it had broken the terms of its licence.

Many observers interpret the latest campaign against TNK-BP as a similar softening-up exercise, intended eventually to deliver control of the company to Gazprom or Rosneft, the state-owned oil group.

This would be a major blow for BP, but the company should have known the risks all along – not least because when Mr Hayward's predecessor, Lord Browne, formed TNK-BP in 2003, he had already done business with Mr Fridman and come off worst.

The earlier encounter began in 1997 when BP spent $500m (£250m) on a 10 per cent stake in the Siberian oil firm Sidanco – and then lost much of it when the company promptly went bust. Shareholder Mikhail Fridman manipulated the arcane insolvency process to his own advantage: BP was first forced to write off $200m and then to invest another $375m just to protect its position. Asked why BP hadn't simply cut a deal with Mr Fridman, one executive reportedly said: "You don't talk to someone who's stolen your wallet."

Yet just a few years later Lord Browne committed $7bn to Mr Fridman and his associates to form TNK-BP. (During the negotiations, he felt compelled to ask his new friends: "Are you going to take the money and run?" Yet still he signed the contract.) It was a fabulously risky deal but what propelled him was the fact that nowhere else on earth could BP have secured reserves and production potential on such a scale. This was fundamentally due to petroleum geology around the world.

The basic problem for BP was that international oil companies (IOCs) are largely excluded from the countries that control most of the world's known oil: the 13 members of Opec. In the rest of the world, by contrast, oil resources were already far more depleted. Most prospective regions had been thoroughly explored and exploited, and in most non-Opec countries output had already gone into decline. Opportunities for growth were severely limited, but Russia was an exception.

With the fall of the Soviet Union at the end of the 1980s, the Russian economy had slumped and oil production collapsed from 11.5 million barrels per day in 1987 to just over six million in 1998, as fields were mothballed or simply not maintained. But as confidence returned so did the necessary investment, and output began to recover – rising almost 60 per cent by 2007. It was this wave that Lord Browne wanted to ride.

The TNK-BP deal quickly boosted BP's oil production by half a million barrels per day, and growth in Russian output continued to offset declines in the British company's operations in the North Sea, Europe and America. A glance at BP's quarterly figures shows that had Lord Browne flinched and not done the deal, the company's output would by now have fallen by almost as much. Instead of averaging 2.4 million barrels per day in 2007, BP's output would have been less than 1.6 million. Given the absence of such opportunities elsewhere, it seems Lord Browne had little choice.

But still that gamble is poised to backfire, with BP now looking set to lose up to a third of its oil production capacity in the fight with TNK-BP's Russian shareholders backed by their government. However, this is not simply an example, as Mr Hayward might like to imagine, of the oil industry's man-made tribulations above ground; it is a direct consequence of the tightening constraints below.

Those constraints are starting to emerge in Russia itself – where the decade-long boom came to a halt last year and production has now begun to fall. Some pundits blame the high level of tax levied on oil profits by Russia, but the deeper cause is that the easy gains achieved by refurbishing existing fields have now been exhausted. Future increases in production capacity will require the development of new fields in frontier provinces such as east Siberia and the Arctic, where working conditions are especially hostile. Analysts agree that it gets very much harder from now on.

But Russia's faltering production should come as no surprise. As long ago as 2005, the then oil minister Victor Khristenko predicted that output would plateau at just over 10 million barrels per day – slightly higher than today's level – from about 2010. More recently Leonid Fedun, a vice-president with the independent oil firm Lukoil, declared that Russian production would not exceed current levels in his lifetime.

This matters hugely because it was only the rise in Russian output over the past decade that satisfied soaring demand from Asia. Now this rapid growth is over and it is widely expected that aggregate non-Opec output will peak by around the end of this decade. From then on, the only thing standing between us and global peak oil is the Opec cartel, and many analysts doubt whether even they have the oil resources to raise production by much.

This weekend all eyes will be on the oil summit in Saudi Arabia, perhaps more in hope than expectation.

David Strahan is the author of 'The Last Oil Shock: a Survival Guide to the Imminent Extinction of Petroleum Man', published by John Murray. www.lastoilshock.com

They often admit that they don't see eye-to-eye, but Russia and the European Union are neighbours who know that being next door to each other can bring massive mutual benefits.

Russia is the EU's third biggest trading partner and half of all Russian exports go to the EU.

The two-day summit opening on Thursday will launch negotiations on a new partnership and co-operation agreement.

"It's most important that we start now, and have a speedy process. But it's of course a complex negotiation," admitted the EU's Commissioner for External Relations, Benita Ferrero-Waldner, on a visit to Moscow earlier this month.

No one is willing to say for sure how long it will take to reach a final agreement.

New wealth
Energy supplies are a key issue. Russia supplies around a quarter of the EU's gas. Past gas rows with its former Soviet neighbours - especially Ukraine - made Europe nervous.

The choice of the summit venue, Khanty-Mansiysk in Siberia, is no accident. Russia's European guests will find themselves at the heart of the region which is making Russia rich and powerful.

Russia wants to build further on that - by expanding westwards. So far, that has proved difficult.

"I think the key word is motivation. Russia wants to get as much of a role as possible in distribution and assets in Europe. The role of just a provider of gas and oil is not sufficient," says Mikhail Kroutikhin of the energy information group rusenergy.com.

As well as highlighting Russia's resource wealth, the Siberian summit venue also points to one of the challenges.

"Reserves are very costly to develop because they are scattered in the middle of nowhere," Mr Kroutikhin explains. "This is why Russia is more interested in getting something of value abroad than in developing these costly reserves, until prices are even higher than now."

The Kremlin is putting its weight behind those efforts. As a former chairman of Russia's energy giant, Gazprom, President Dmitry Medvedev is well acquainted with the business.

His foreign affairs adviser, Sergei Prikhodko, says the question of what he terms "the unfair prevention of Russian investment" in Europe will feature at the Siberian summit.
Mr Medvedev's recent arrival in office marks a new phase in the Russia-EU relationship.

How democratic is Russia?
Vladimir Putin, Mr Medvedev's predecessor in the Kremlin, and now Russia's prime minister, is not expected to attend the summit.

Differences during Mr Putin's time as president focused on Western concerns that Russia was moving away from the democratic path it chose following the collapse of communism.

"The new agreement should, of course, have a strong mention of democratic values and human rights," Ms Ferrero-Waldner told the Russian parliament during her visit.

Russia would insist that should include the question of "revision of history and the situation of our compatriots," as Mr Prikhodko puts it - a reference to Russia's recent rows with the Baltic States.

Russia was especially angered by the relocation of a Red Army war memorial in Estonia - and by the alleged ill-treatment of Russians still resident in the former Soviet republics.

The westward political and military movement of former members of the Soviet bloc has frustrated many in Moscow. The expansion of Nato has infuriated some.

Those sorts of concerns are expected to be played down at this summit. There is a sense in diplomatic circles here that whatever disagreements Russia may have with the West, Russia has to have a good working relationship with the EU.

"These questions aren't decided in Brussels, but in Washington," says a Kremlin source of Nato membership.

"The European Union isn't the initiator of the expansion of Nato."

Battered by soaring fertiliser prices and rioting rice farmers, the global food industry may also have to deal with a potentially catastrophic future shortage of phosphorus, scientists say.

Researchers in Australia, Europe and the United States have given warning that the element, which is essential to all living things, is at the heart of modern farming and has no synthetic alternative, is being mined, used and wasted as never before.

Massive inefficiencies in the “farm-to-fork” processing of food and the soaring appetite for meat and dairy produce across Asia is stoking demand for phosphorus faster and further than anyone had predicted. “Peak phosphorus”, say scientists, could hit the world in just 30 years. Crop-based biofuels, whose production methods and usage suck phosphorus out of the agricultural system in unprecedented volumes, have, researchers in Brazil say, made the problem many times worse. Already, India is running low on matches as factories run short of phosphorus; the Brazilian Government has spoken of a need to nationalise privately held mines that supply the fertiliser industry and Swedish scientists are busily redesigning toilets to separate and collect urine in an attempt to conserve the precious element.

Dana Cordell, a senior researcher at the Institute for Sustainable Futures at the University of Technology in Sydney, said: “Quite simply, without phosphorus we cannot produce food. At current rates, reserves will be depleted in the next 50 to 100 years.

She added: “Phosphorus is as critical for all modern economies as water. If global water supply were as concentrated as global phosphorus supply, there would be much, much deeper concern. It is amazing that more attention is not being paid to ensuring phosphorus security.”

In the past 14 months, the price of the raw material - phosphate rock - has surged by more than 700 per cent to more than $367 (£185) per tonne. As well as putting pressure on food prices, some researchers believe that the risk of a future phosphorus shortage blows a hole in the concept of biofuels as a “renewable” source of energy. Ethanol is not truly renewable if the essential fundamental element is, in reality, growing more scarce, researchers say. Within a few decades, according to forecasts used by scientists at Linköping University, in Sweden, a “peak phosphorus” crunch could represent a serious threat to agriculture as global reserves of high-quality phosphate rock go into terminal decline.

Because supplies of phosphates suitable for mining are so limited, a new geopolitical map may be drawn around the remaining reserves - a dynamic that would give a sudden boost to the global importance of Morocco, which holds 32 per cent of the world's proven reserves. Beyond Morocco, the world's chief phosphorus reserves for export are concentrated in Western Sahara, South Africa, Jordan, Syria and Russia.

Natural distribution of phosphorus could create a small number of new “resource superpowers” with a pricing control over fertilisers that some suspect could end up rivalling Opec's control over crude oil. The economic battle to secure phosphorus supply may already have begun. China, according to US Geological Survey estimates, has 13 billion tonnes of phosphate rock reserves and has started to guard them more carefully. Beijing has just imposed a 135 per cent tariff on phosphate rock exports to try to secure enough for its own farmers, alarming the fertiliser industry, as well as Western Europe and India, which are both entirely reliant on phosphorus imports. With America's own phosphorus production down 20 per cent over the past three years, it has begun to ship phosphorus in from Morocco.

American projections suggest that global phosphorus demand could grow at 2.3 per cent annually just to feed the growing world population, an estimate that was made before the growth of biofuels.

Few observers hold out hope of a discovery of phosphorus large enough to meet the continued growth in demand. The ore itself takes millions of years to form, and the prospect of extracting phosphorus from the sea bed presents massive technological and financial challenges.

The answer, say crop scienctists, lies in better husbandry of phosphorus reserves: an effort that may require the creation of an international body to monitor the use and recycling of phosphorus.

· Testimony to US Congress will also criticise lobbyists
· 'Revolutionary' policies needed to tackle crisis

James Hansen, one of the world's leading climate scientists, will today call for the chief executives of large fossil fuel companies to be put on trial for high crimes against humanity and nature, accusing them of actively spreading doubt about global warming in the same way that tobacco companies blurred the links between smoking and cancer.

Hansen will use the symbolically charged 20th anniversary of his groundbreaking speech (pdf) to the US Congress - in which he was among the first to sound the alarm over the reality of global warming - to argue that radical steps need to be taken immediately if the "perfect storm" of irreversible climate change is not to become inevitable.

Speaking before Congress again, he will accuse the chief executive officers of companies such as ExxonMobil and Peabody Energy of being fully aware of the disinformation about climate change they are spreading.

In an interview with the Guardian he said: "When you are in that kind of position, as the CEO of one the primary players who have been putting out misinformation even via organisations that affect what gets into school textbooks, then I think that's a crime."

He is also considering personally targeting members of Congress who have a poor track record on climate change in the coming November elections. He will campaign to have several of them unseated. Hansen's speech to Congress on June 23 1988 is seen as a seminal moment in bringing the threat of global warming to the public's attention. At a time when most scientists were still hesitant to speak out, he said the evidence of the greenhouse gas effect was 99% certain, adding "it is time to stop waffling".

He will tell the House select committee on energy independence and global warming this afternoon that he is now 99% certain that the concentration of CO2 in the atmosphere has already risen beyond the safe level.

The current concentration is 385 parts per million and is rising by 2ppm a year. Hansen, who heads Nasa's Goddard Institute for Space Studies in New York, says 2009 will be a crucial year, with a new US president and talks on how to follow the Kyoto agreement.

He wants to see a moratorium on new coal-fired power plants, coupled with the creation of a huge grid of low-loss electric power lines buried under ground and spread across America, in order to give wind and solar power a chance of competing. "The new US president would have to take the initiative analogous to Kennedy's decision to go to the moon."

His sharpest words are reserved for the special interests he blames for public confusion about the nature of the global warming threat. "The problem is not political will, it's the alligator shoes - the lobbyists. It's the fact that money talks in Washington, and that democracy is not working the way it's intended to work."

A group seeking to increase pressure on international leaders is launching a campaign today called 350.org. It is taking out full-page adverts in papers such as the New York Times and the Swedish Falukuriren calling for the target level of CO2 to be lowered to 350ppm. The advert has been backed by 150 signatories, including Hansen.

A green standard for companies that act to reduce their carbon footprint is launched today by the Carbon Trust. Backed by business groups and environmental campaigners, the new standard is intended to end "greenwash" and highlight firms that are genuine about their commitment to the environment.

Tom Delay, chief executive of the Carbon Trust, said the move was designed to end public mistrust of corporate climate change claims. Only businesses that can demonstrate a real reduction in carbon pollution from their operations are eligible. No offsetting of emissions by funding carbon reduction projects elsewhere is allowed.

Delay said: "What businesses and consumers both share is a desire for one, credible way to prove an organisation has ... reduced their carbon emissions year-on-year without the use of offsetting. The Carbon Trust Standard is the only answer to this."

Companies pay up to £12,000 for the accreditation, which does not set a minimum reduction target – an annual decrease of 1 tonne of carbon dioxide will qualify. Firms given the standard must continue to shrink their emissions in future, or face losing their green status. Companies can also qualify by making relative improvements in carbon emissions, such as compared to turnover, of 2.5% a year.

The standard covers only direct emissions from a company's fuel and electricity use, as well as from business travel such as flights. It does not cover the emissions caused by a firm's products, or supply chain. And companies with polluting manufacturing sites abroad would not have to count them if they sought accreditation, say, for a head office in London.

Delay said: "It will also help brands stand out from the crowd as research shows consumers and business decision makers will choose an organisation with an award like [this] over another of similar price and quality."

Twelve companies, including B&Q, King's College London, Morrisons and Thames Water, have so far been awarded the standard, for shaving an average 8% off their carbon emissions over three years. Harry Morrison of the Carbon Trust said other companies had tried and failed to achieve it. Others pulled out of the process when they realised the standard could be taken away if their emissions rise in future.

When Stéphane Dion announced last November that a Liberal government would cut poverty by 30 per cent – and child poverty by 50 per cent – within five years, his political opponents scoffed.

Where would he find the billions of dollars he needed to deliver on his commitment?

Now we know the answer – or at least a large part of the answer.

Dion's proposed carbon tax, unveiled last week, would allow him to launch the most aggressive anti-poverty program in 40 years.

His "green shift" would transfer wealth from rich to poor; from the oil patch to the rest of the country; and from the coffers of big business to the pockets of low-income Canadians.

Roughly $9 billion of the $15.3 billion Dion expects to collect annually in carbon tax revenues would be returned to Canadians earning less than $40,000 a year. He would use both income tax cuts and benefits targeted at children, low wage earners, rural residents and individuals with disabilities.

It would be unthinkable, under the current tax system, to redistribute a sum of this magnitude. The Liberals are gambling that, under a pollution-based tax system, it would be politically feasible to take from the "haves" and give to the "have-nots."

It is too early to say whether this strategy will work.

Voters need time to figure out whether they'd lose or gain in a low-carbon economy and decide whether the threat of climate change warrants a wholesale reconfiguration of the tax system.

In the meantime, it is possible to evaluate the poverty-reduction aspects of the Liberal blueprint.

They won't carry Dion all the way to his goal of cutting the number of Canadians living below the poverty line by 30 per cent. Last week's tax changes will have to be supplemented with investments in affordable housing, child care, public transit, job training and aboriginal development.

But it does look as if his fiscal framework will accommodate the three objectives he set last fall:

He said he would expand and improve the Canada Child Tax Benefit. Last week, he backed that up with a pledge to introduce a $350 universal child tax benefit, paid for with $2.9 billion of carbon tax revenues.

He said he would increase support for low-income seniors. Last week, he fleshed that out with a proposal to raise the Guaranteed Income Supplement, which is targeted at pensioners with no savings, by $600 a year over the course of a Liberal mandate. Cost: $800 million in carbon tax proceeds.

And he said he would make work pay more than welfare. Last week, he outlined his party's plan to enrich the Conservative government's Working Income Tax Benefit and replace its regressive employment tax credit with a $1,850 refund targeted at those earning less than $50,000. Cost: $765 million covered by the carbon tax.

When Dion made his original commitment, it was obvious he would need more than these initiatives to reach his target.

Now he has added a fourth policy thrust. He will cut the lowest personal tax rate (paid on the first $37,885 of taxable income) to 13.5 per cent from 15 per cent at a cost of $4.2 billion.

To broaden his plan's appeal, he will also reduce the two middle-income tax rates by 1 percentage point apiece. This will cost $2.5 billion. (The highest tax rate will remain at 29 per cent.)

There is no guarantee that every low-income household would come out ahead. Under Dion's plan, a family renting a poorly insulated apartment, heated with oil, in a province that depends on fossil fuels for electricity, could end up paying a hefty carbon tax.

But on balance, his "green shift" would help the poor at the expense of affluent consumers and heavy polluters, particularly companies extracting oil from the tar sands of Alberta and Saskatchewan.

The Liberal leader promised seven months ago to "embark on a war on poverty never seen before in Canada's history."

People thought he was exaggerating. It turns out that he meant it.

With Americans growing angrier by the day about high gasoline prices, nobody can accuse Congress of turning a deaf ear.

Daniel Yergin, an energy analyst, said tight supplies and a weak dollar were among the factors that have led to high oil prices.
On Wednesday lawmakers will hold their 40th hearing so far this year on the cause of high oil prices. Filing bills on Capitol Hill to combat the problem is becoming a cottage industry, with clever names like the Prevent Unfair Manipulation of Prices Act, or PUMP Act, and the No Excuses Energy Act.

Until recently, lawmakers had focused on the traditional suspects: oil companies and the Organization of the Petroleum Exporting Countries. But increasingly, they are casting a suspicious eye on the role of investors, including speculators, in driving up prices.

As the ninth hearing of the month gets under way on Wednesday, one of the nation’s best-known energy experts, Daniel Yergin, is expected to tell Congress that the focus on speculation is largely misguided.

Mr. Yergin will join numerous other energy experts who have declared that the rise in oil prices can be explained by basic economic factors, such as the limited growth in supplies in recent years, a weakening dollar, a global surge in energy demand and a string of production disruptions in countries like Nigeria.

“When an issue is this hot, it would be so much easier if there was a single reason to blame,” Mr. Yergin said in an interview on Tuesday, previewing his testimony before Congress.

“The oil shock is real and is about the hottest political issue right now,” he said. “So Congress feels the pressure to do something but there is not much it can do to promote peace in Nigeria or to get the value of the dollar to go up.”

Mr. Yergin is the chairman of Cambridge Energy Research Associates, a consulting firm, and the Pulitzer Prize-winning author of “The Prize,” an authoritative history of the oil business. He will speak on Wednesday before the Joint Economic Committee, headed by Senator Charles E. Schumer, Democrat of New York.

Mr. Yergin said the market is relentlessly bidding up oil prices in response to deep-seated fears that the growth in demand will keep outpacing the growth in oil supplies in coming years.

“There is a shortage psychology in the financial markets and that is reflected in the price of oil,” Mr. Yergin said in the interview. “You are seeing a lot of people who have never invested in commodities who are now piling into the market. But calling it speculation is way too simplistic.”

What role financial institutions — pension funds, mutual funds, and hedge funds, among others — are playing in driving up the price of oil to nearly $140 a barrel remains a key question. Regulators in Washington have acknowledged that they do not have enough information on speculative trading in commodity markets. Even though the evidence is incomplete, speculators have nonetheless become prime targets for legislative action.

Gasoline prices now average $4.07 a gallon, up more than $1 a gallon in the past year, according to AAA, the automobile group. The price of oil — the main reason behind the run-up in gasoline prices — has doubled in the past year, settling Tuesday at $137 a barrel on the New York Mercantile Exchange, up 26 cents.

There is little doubt that investments in commodity markets have grown in recent years as investors sought assets offering better returns than stocks, bonds or currencies. Investors, faced with a weakening dollar, a slowing economy and rising inflation, found a hedge in crude oil.

Some analysts who testified before a House panel on Monday estimated that oil prices could fall to around $60 a barrel if speculators were driven out of the commodity market.

But others warned that assessing how much, if at all, investors have pushed up prices is an impossible task. Relatively little is known about oil investments in some lightly regulated markets, like the IntercontinentalExchange, an electronic exchange based in Atlanta that has gained prominence as an energy marketplace.

Facing mounting pressure to step up its oversight, the Commodity Futures Trading Commission, in Washington, said that it had recognized the need for better information. Its acting chairman, Walter L. Lukken, said his agency was seeking more trading data from exchanges in both the United States and abroad.

Senator Schumer’s committee provided an advance copy of Mr. Yergin’s prepared testimony. In it, Mr. Yergin did not discount the rising role of investors in energy markets. But he said their presence was more a consequence than a cause of the tight markets.

“Financial markets are today playing an increasingly important role in price formation — responding to, accentuating, and exaggerating supply and demand, geopolitics, and other trends,” Mr. Yergin says in the prepared remarks.

But he pointed to a variety of other factors that have made the run-up possible. Nigeria, for example, is producing one million barrels a day less than its production capacity because of disruptions caused by attacks in the oil-rich Niger Delta. Production has stagnated in countries like Russia and Venezuela and is even plunging in places like Mexico.

All these factors have left the global oil industry with little capacity to boost supplies. There is now less than two million barrels a day of unused capacity, a safety cushion that has declined from about five million barrels a day in 2002.

“In a tight market, prices go up,” Mr. Yergin said. “And a tight market is also a market that is more crisis-prone, more vulnerable to the impact of disruptions.”

Senator Schumer, in an interview, said he could see no easy answers to high oil prices.

“Everyone would like to believe that there is a silver bullet — like a bubble or speculation — that can solve our oil problem,” he said. Instead, he said, it would be better for the nation to focus on conserving energy and reducing its oil consumption.

Thousands of new wind turbines could be built across the UK as part of a £100bn investment in renewable energy that could create hundreds of thousands of new "green collar" jobs, Gordon Brown announced today.

The prime minister unveiled what he described as a "green revolution" and "the most dramatic change in energy policy since the advent of nuclear power".

He wants to build up Britain's clean power supply in order to reach the EU-imposed target of producing 15% of the country's energy from renewable sources by 2020. It will require £100bn of investment from the private sector, which the government will encourage with financial incentives due to be announced later by the business secretary, John Hutton.

In his speech, Brown said that the North Sea, which has passed its peak in terms of oil and gas supplies, will be turned into "the equivalent for wind power of what the Gulf of Arabia is for oil". Wind turbines will also be built inland, but with sensitivity towards local communities.

Householders will be encouraged to reduce their bills through energy saving incentives due to be announced later this summer, said Brown. Within a decade he said he wanted every householder able to do so to fit loft or cavity wall insulation, install low energy light bulbs, and uses low energy consumer goods.

The government will also shortly begin a new advertising campaign showing people what they can do to reduce their energy and fuel bills, like turning off standby and fitting new showerheads.

In the autumn, said Brown, the government will consult on a new plan aimed at changing the way in which energy companies operate – encouraging them not to supply ever more units of electricity and gas, but to make profits from reducing not increasing demand.

"This is a green revolution in the making. It will be a tenfold increase on our current deployment of renewables, and a 300% increase on our existing plans: the most dramatic change in our energy policy since the advent of nuclear power," said Brown.

He said it would mean that by 2020 renewables would account for over 30% of electricity supply, 14% cent of heat supply and up to 10% cent of transport fuels.

Brown estimated that the renewables programme would generate around 160,000 jobs, and plans for new nuclear power stations around 100,000, with many more created from energy-saving measures.

The prime minister also said he was prepared to take on public opinion over green taxes, insisting that a low carbon society will not emerge from a "business as usual" approach.

"It will require real leadership from government - being prepared to make hard decisions on planning or on tax for example," he said.

"It will mean new kinds of consumer behaviour and lifestyles. And it will demand creativity, innovation and entrepreneurialism throughout our economy and our society."

Greenpeace described the new strategy as "visionary", but the environment group warned that ministers had promised much before and had so far failed to deliver.

Executive director John Sauven said: "If the government actually means it this time then Britain will become a better, safer and more prosperous country. We could create jobs, reduce our dependence on foreign oil and use less gas, and in the long run our power bills will come down. But it won't happen without real government action."

The Renewable Energy Association executive director, Philip Wolfe, said: "Government have produced an energy strategy, not just an electricity strategy. This shows a new maturity in approach; getting away from the soundbite policy-making of the past and looking carefully at the role of renewables in buildings, heat, and transport.

"The key missing factor is a greater sense of urgency. We have only 12 years left and government still wants to use two of those talking about it."

Martin Temple, chairman of the Engineering Employers Federation, said: "Moving to a low-carbon economy will create significant business opportunities for the UK, but we will need to move quickly and decisively. Businesses around the world are alive to the massive opportunities and a number of governments are making their exploitation a national priority."

Political and business divisions over the building of a third runway at Heathrow deepened on Wednesday as Ruth Kelly, transport secretary, firmly backed the growth of the airport, subject to it meeting certain environmental conditions.

“I am convinced that without additional capacity Heathrow will be at a huge disadvantage ... I believe there is no substitute to increasing capacity,” Ms Kelly told a London conference.

The airport was “bursting at the seams” and was nearly 99 per cent full, she said.

“Fundamentally, no one should try to pretend it is possible to have a better Heathrow without facing up to the over-riding challenge of lack of runway capacity ... Ultimately there is no substitute for increasing runway capacity, and no short-term quick fixes.”

The government is due to decide whether to give its formal backing for a third runway in the autumn.

The debate over Heathrow is looming as a big general election issue in a number of key London constituencies, as the Conservative party adopts an increasingly sceptical stance towards airport expansion. David Cameron, the Conservative leader, last week rejected the economic case for a third runway.

Theresa Villiers, the Tory shadow transport secretary, said figures provided by the government and BAA, the airport operator, on the economic and environmental issues around Heathrow “simply do not stack up”.

“The supporters of expansion have not produced reliable data to prove the economic case for expansion and they have failed to answer the environmental questions,” she said.

Ms Villiers accused Colin Matthews, chief executive of BAA, of wanting “to gag those who want a proper debate on Heathrow”.

The Conservatives’ stance drew an angry response from Willie Walsh, British Airways chief executive.

Mr Walsh said he found it “quite amazing” that Mr Cameron had lent his support to those questioning the role played by transfer passengers at Heathrow.

“Some high-profile critics of Heathrow’s expansion do not appear to understand how a hub airport works – or the huge value transfer passengers bring to the UK,” Mr Walsh said.

He also dismissed talk of an airport in the Thames estuary, as suggested by Boris Johnson during the London mayoral election campaign, as “fantasyland economics”.

The increasing cost of living has forced one in three Britons to turn to "The Good Life" and become more self-sufficient by growing their own fruit and vegetables, according to a study.
According to new research, one third of the population is following the example of the 1970s sitcom starring Felicity Kendal and Richard Briers by cultivating tomatoes, peas, cauliflower and potatoes.

Of those who are not growing their own food, 63 per cent plan to do so within two years instead of buying fruit and vegetables from supermarkets.

The 12 per cent rise in the cost of staple groceries over the last year, which has added £750 to the average annual grocery bill, is to blame for the increase in those growing their own.

The survey suggested that 46 per cent of the 1,027 people polled said cost was the reason for them growing their own food. Fifteen per cent said they didn't trust supermarkets to provide 100 per cent organic goods.

A spokesman for Miracle-Gro Organic Choice, which carried out the research said: "Food is becoming more expensive by the day and this research shows that we are turning to our own gardens to produce the staple fruit and vegetables to beat the price hike.

"Celebrity chefs have now made gardening cool again, and growing your own veg is no longer something reserved for the older generation or those who own allotments.

"But not only is it cheap, but it can be extremely relaxing and rewarding to cultivate your own food."

Jamie Oliver is one chef who has praised the health benefits and financial savings that result from growing your own food.

Television programmes such as River Cottage Spring, with the celebrity chef Hugh Fearnley-Whittingstall, in which he tasks villages with turning wasteland into allotments, have also made a contribution.

Another 29 per cent of people said the main reason for growing their own fruit and veg is having children and taking an interest in their diet.

The study also revealed that 86 per cent of people are concerned about the rising cost of food. Sixty-four per cent of parents said they now gave their children organic fruit and veg.

Another 61 per cent said they did so because of the health benefits and 24 per cent think it tastes better.

It also emerged that 60 per cent of people have taken more of an interest in organic food since having children.

The Miracle Gro Organic Choice spokesman added: "Growing your own veg means you can be 100 per cent it is organic.

"It is perfect for time-poor parents wanting to feed their children cost effective, chemical free produce that's had the very best start in life."

Arriva on Thursday reported “strong growth” in its train and bus operations, with group revenue expected to increase by more than 50 per cent in the first half of the year.

In a trading update, the group highlighted the trend for UK public transport operators to benefit from substantial increases in passenger numbers, as rising fuel prices persuade more people to abandon their cars for trains and buses.

Rivals Go-Ahead and Stagecoach have each recently reported strong growth this year, with no impact from the weakening economy on their business.

Arriva said passenger revenue in the first 24 weeks of its new CrossCountry rail franchise was up 10 per cent on the equivalent period last year. Revenue at Arriva Trains Wales, its other UK rail operation, grew by 10.7 percent for the year to date.

The UK bus division is also expanding strongly, “as a result of more passengers and network development in the regions, increased contract mileage in London, and the acquisition of airport-based operations Tellings Golden Miller and Excel.”

Hedging has protected the company from the worst effects of rising fuel prices for its buses and trains, which are mainly diesel powered. Its CrossCountry trains alone consume 100m litres a year.

“Our general policy is to maintain fuel price fixes at least 12 to 15 months ahead, on a rolling basis,” Arriva said. “For the current year, the average cost price per litre of fuel, before fuel taxation and delivery costs, will be around 28p, similar to 2007... Fuel price fixes for 2009 so far are at an average price of 39p per litre.”

Arriva expects to continues expansion from its British base into continental Europe. In January it acquired a further 10 per cent interest in Barraqueiro, Portugal’s leading passenger transport operator, taking its stake to 31.5 per cent. A deal to acquire 80 per cent of Eurobus, taking Arriva into Hungary and Slovakia for the first time, is expected to complete shortly.

The company said it was confident of reporting “considerable revenue and earnings growth at both the half-year, and for the full year.” Interim results for the half year to 30 June 2008 will be announced on 22 August.

The shares added 2p to 633p in early London trading.

Farmers' leaders called for action last night over fuel theft after a woman died following a raid by diesel thieves.

Rosemary Dove, 68, collapsed shortly after dialling 999 when she and her husband came across an intruder at their farmhouse in Bishop Middleham, Co Durham.

Supplies of low-tax red diesel, used for tractors and other agricultural machinery, are increasingly being targeted by criminals because of rising costs at the fuel pumps.

Gangs are thought to be growing bolder and more sophisticated. Whereas in the past they would siphon off a tankful, now they sometimes take thousands of litres at a time. Mrs Dove and her husband Frank were returning home on Sunday night when they spotted a man trying to steal diesel from a pump at the side of their farm. While Mr Dove went to confront the intruder, his wife went inside the house to telephone the police and alert relatives on a nearby farm.

A Durham police spokesman said: "Mrs Dove complained of feeling unwell immediately after making the 999 call and collapsed on the floor of her farm. She was later pronounced dead at the scene by paramedics."

The couple's son Michael joined his father in chasing the thief's pick-up truck and cornering it, but was knocked into a ditch by the driver and injured when he tried to approach.

Detective Chief Inspector Paul Harker, leading the investigation, said: "At this stage it's not clear exactly how many people were in the pick-up. We urgently need any help that will lead us to those involved in this tragic series of events, which have left the Dove family absolutely devastated."

Richard Dodd, a Northumberland farmer and the north-east director of the Countryside Alliance, said the theft of red diesel had been rising at an "alarming level" over the last six months. "Diesel fuel has a value far more than it ever used to. It was 11p a litre three years ago, now it's 70p. The trend probably started up six months ago. The criminals have come out and found rich pickings in the countryside.

"These gangs realise this is a commodity and they can also sell it readily. Because the price of diesel elsewhere is so expensive, they'll probably always be able to find a market with someone trying to cut costs."

Tim Price, spokesman for rural business insurer NFU Mutual, said the company had seen a 20% increase in the number of claims for red diesel this year. "A few years ago, thieves would just fill up their own diesel tank but now they are much more organised, stealing thousands of litres in one go," he said. A Durham police spokesman confirmed there had been an increase in fuel thefts across the county.

High-speed ferries between Ireland and Britain are slowing down by a quarter of an hour per trip to save fuel and face being replaced by conventional ferries operating at half the speed unless the oil price falls.

Stena Line has also introduced a fuel surcharge of £10 per vehicle and £2 for foot passengers.

The crossing time between Dun Laoghaire, Co Dublin, and Holyhead, North Wales, will rise from 99 minutes to 115. The trip from Belfast to Stranraer will take 119 minutes, an increase of up to 14 minutes depending on the time of day. The reduction in speed will reduce fuel consumption by 8 per cent.

Michael McGrath, Stena’s Irish Sea director, hinted that the high oil price could result in the withdrawal of the HSS ferries, aluminium catamarans the size of a football pitch that travel at more than 40mph.

They would be replaced by conventional ferries operating with a top speed of 25mph, meaning journey times would return to the three hours that was normal before the HSSs were introduced in the mid-1990s.

Mr McGrath said: “As fuel rises, all ferry operators are threatened with major change. Whether the \ have a life or not depends on the customer’s willingness to pay.”

Stena blamed high oil prices last year when it withdrew one HSS from the North Sea route between Harwich and the Hook of Holland. The price then was $70 (£38) a barrel but has since almost doubled. The North Sea HSS is being stored in Belfast awaiting a buyer but, like dozens of fast ferries laid up in docks around the world, may never return to service.

The HSSs were designed in the 1980s when oil was a fraction of its current price and were built to operate until at least 2022. They use more than twice as much fuel as a conventional ferry. They consume gas oil, similar to kerosene used in jet aircraft and double the price of standard marine fuel.

Container ships are also slowing down to save fuel, adding two or three days to the voyage from manufacturing centres in the Far East to European ports.

A study has found that the world’s shipping industry wastes almost three million barrels of oil a day by using ageing vessels that have not been upgraded with fuel-saving technology.

The DK Group found that fitting new propellers and engines and installing devices that allow ships to glide on a cushion of air would reduce global marine fuel consumption by up to 40 per cent.