The recent revelations of a International Energy Administration whistleblower that the IEA may have distorted key oil projections under intense U.S. pressure is, if true (and whistleblowers rarely come forward to advance their careers), a slow-burning thermonuclear explosion on future global oil production. The Bush administration’s actions in pressuring the IEA to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves have the potential to throw governments’ long-term planning into chaos.
Whatever the reality, rising long term global demands seem certain to outstrip production in the next decade, especially given the high and rising costs of developing new super-fields such as Kazakhstan’s offshore Kashagan and Brazil’s southern Atlantic Jupiter and Carioca fields, which will require billions in investments before their first barrels of oil are produced.
In such a scenario, additives and substitutes such as biofuels will play an ever-increasing role by stretching beleaguered production quotas. As market forces and rising prices drive this technology to the forefront, one of the richest potential production areas has been totally overlooked by investors up to now – Central Asia. Formerly the USSR’s cotton “plantation,” the region is poised to become a major player in the production of biofuels if sufficient foreign investment can be procured. Unlike Brazil, where biofuel is manufactured largely from sugarcane, or the United States, where it is primarily distilled from corn, Central Asia's ace resource is an indigenous plant, Camelina sativa.
Of the former Soviet Caucasian and Central Asian republics, those clustered around the shores of the Caspian, Azerbaijan and Kazakhstan have seen their economies boom because of record-high energy prices, while Turkmenistan is waiting in the wings as a rising producer of natural gas.
Farther to the east, in Uzbekistan, Kyrgyzstan and Tajikistan, geographical isolation and relatively scant hydrocarbon resources relative to their Western Caspian neighbors have largely inhibited their ability to cash in on rising global energy demands up to now. Mountainous Kyrgyzstan and Tajikistan remain largely dependent for their electrical needs on their Soviet-era hydroelectric infrastructure, but their heightened need to generate winter electricity has led to autumnal and winter water discharges, in turn severely impacting the agriculture of their western downstream neighbors Uzbekistan, Kazakhstan and Turkmenistan.
What these three downstream countries do have however is a Soviet-era legacy of agricultural production, which in Uzbekistan’s and Turkmenistan case was largely directed towards cotton production,…
