Part of the 200-kilometre-long (120 miles) waterway forms a section of the border with Iran.

An unresolved boundary dispute was a major reason for the 1980-1988 war between Iraq and Iran that resulted in the waterway's closure.

"The Shatt al-Arab is reborn again after being closed for 31 years," Mehdi Badah Hussein, head of a joint committee to develop Majnoon oil field, told AFP at a ceremony to open the port.

"There are other harbours on the Shatt al-Arab, but commercially, this is the first time Iraq succeeded in turning the Shatt al-Arab into a maritime passage which will help in transporting heavy equipment," Hussein said.

Dia Khalil, an Iraqi engineer and joint committee member, told AFP the journey up the Shatt al-Arab to the new port is about 80 kilometres (50 miles), and that ships will pay customs fees in Umm Qasr to the south before heading to the new harbour.

A consortium of Anglo-Dutch oil giant Shell and Malaysia's Petronas signed a contract with Iraq in January 2010 to operate the enormous Majnoon field.

"We believe this is the first jetty harbour to bring in ships that can come from all over the world back off the river with heavy equipment in 31 years," Shell Majnoon general manager Ole Myklestad told AFP.

"This is very important," Myklestad said at the ceremony. "I hope that ships leaving this harbour in the future will also be carrying goods."

Myklestad said the first ship arrived at the harbour on January 5 and clarified that the port would not be used to export oil which is to be carried by pipeline.

"This is a happy day," said Khalaf Wadi, deputy manager of Iraq's Southern Oil Co, a partner with Shell and Petronas. "We are officially opening the first commercial jetty in the Shatt al-Arab since the start of the war with Iran."

The port's main function will be to facilitate the transportation of equipment to the massive Majnoon oil field.

But ordinance in the field, which was a major battleground during the eight-year war with Iran, poses a danger.

Simon Mawdslag, Shell's Explosive Remnants of War Coordinator, said "over 4,000 individual items of ordinance" have been located and removed from a roughly eight square kilometre (three square mile) area -- the only part cleared so far.

"These items are handed over to the Iraqi armed forces and their explosive ordinance disposal team. They actually do the destruction of the items," he said.

The Majnoon field was discovered in 1975 by Brazilian firm Petrobras but its work was interrupted in 1980 by the beginning of the Iran-Iraq war, after it had drilled 20 wells.

In 1990, French firm total negotiated a contract for the field but was unable to sign due to international sanctions after Saddam Hussein's Iraq invaded Kuwait in August of that year.

Oil sales account for the vast majority of Iraqi government income and around two-thirds of gross domestic product.

]]> Wed, 08 FEB 2012 08:48:15 AEST London (AFP) Feb 7, 2012 - BP returned to profit with a bang last year, posting net earnings of $23.9 billion on Tuesday, as the British energy giant prepared for a criminal trial over the US Gulf of Mexico oil spill disaster.

BP announced adjusted profit after tax equivalent to 18.2 billion euros for 2011, as higher oil prices offset a drop in production, according to a group statement.

The London-listed energy major also signalled its recovery by hiking its shareholder dividend for the first time since the devastating April 2010 spillage that ravaged the company's fortunes.

BP had suffered a net loss of $4.9 billion in 2010 after an explosion on the BP-leased Deepwater Horizon rig killed 11 workers, sent millions of barrels of oil spewing into the sea and left it with huge compensation costs.

Including changes in the value of BP's energy inventories, net profit hit $25.7 billion in 2011, the group added Tuesday.

"BP is on the right path," the company's chief executive Bob Dudley said in the earnings release.

"2012 will be a year of increasing investment and milestones as we build on the foundations laid last year."

BP said that it had committed $1.0 billion "for the early restoration of natural resources following the Deepwater Horizon accident in 2010."

It added that by the end of 2011 it had paid more than $7.8 billion to meet claims and government payments, while $15.1 billion had been paid into the trust fund used to compensate victims of the oil spill disaster.

The British company and its partners are set to face a trial beginning February 27 in New Orleans that consolidates a host of lawsuits seeking damages for economic losses, injury claims and environmental violations.

The trial also aims to resolve competing claims of liability among BP and its subcontractors, rig operator Transocean and Halliburton, which was responsible for faulty cement work on the Macondo well, whose leak triggered the oil spill.

Commenting on the upcoming case, Dudley said on Tuesday: "As I have said before, we are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial."

BP has already booked a $40 billion charge to cover cleanup efforts, compensation to fishermen and thousands of others affected by the spill and massive government fines and penalties that are still being assessed.

To meet its costs, BP has committed to selling $38 billion worth of assets before the end of 2013 and has so far clawed back roughly half the amount.

On Tuesday, BP said it planned to sell its liquefied petroleum gas filling operations in a number of countries for an undisclosed amount.

"The oil giant has become a leaner and meaner operation as Bob Dudley sold off assets to meet compensation costs," ETX Capital trader Manoj Ladwa said on Tuesday.

"But with Brent Crude firmly trading over $100 per barrel for over a year, BP's reversal in fortunes could be largely due to the price of oil as opposed to any efforts to turn around the business."

Despite the bumper profits, BP's share price dropped 0.62 percent to close at 486.5 pence on London's benchmark FTSE 100 index, which finished down 0.03 percent at 5,890.26 points.

The group also announced that it was raising its dividend by 14 percent to 8.0 cents a share for the fourth quarter of 2011 -- the first rise since the company resumed paying dividends a year ago.

"Helped along by the strength of the oil price, the company has been able to report a significant upswing in earnings, albeit largely in line with estimates," said Richard J Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

"Meanwhile, this extra cash generation has allowed a generous increase in the dividend payment which marks a sign of future management confidence."

]]> Wed, 08 FEB 2012 08:48:15 AEST Khartoum (AFP) Feb 7, 2012 - A group of 29 Chinese workers taken by rebels in southern Sudan 11 days ago has been freed in good health and flown to Kenya, officials said on Tuesday, after Beijing protested their capture.

Insurgents from the Sudan People's Liberation Movement-North (SPLM-N) confirmed the release of the Chinese, who initially spent two or three days walking away from the "front line" in a war zone through sometimes difficult terrain in the Nuba Mountains after their capture, a rebel spokesman told AFP.

The International Committee of the Red Cross said it arranged the transport of the 29 Chinese to Kenya on an ICRC aircraft.

"The Sudanese authorities allowed a Red Cross plane to take them from Kauda to Nairobi... this Tuesday morning where they were given to the Chinese embassy there," Sudan's foreign ministry said.

Rebels say they control Kauda town in South Kordofan state, where they have since June been fighting with government troops.

China last week lodged a formal protest with Khartoum over the workers' capture and dispatched a six-member team to help gain their freedom.

Vice Foreign Minister Xie Hangsheng summoned a top-level Sudanese embassy diplomat and urged the African nation to "do everything it can to ensure the safety of the Chinese personnel," the ministry's website said.

Late Tuesday the ministry confirmed the workers had arrived in the Kenyan capital, the official Xinhua news agency reported.

"The 29 persons are currently in sound physical conditions and stable mood," the ministry said in a statement quoted by Xinhua.

It added the workers were handed over to the Chinese embassy after they landed in Nairobi, where they appeared flanked by ambassador to Kenya Liu Guangyuan and Qiu Xuejun, head of the team sent to help secure their release.

They were due to head home after a short stay in Nairobi, Xinhua said.

"We were told that one of the workers had a problem with his leg" because of the initial walking after their capture, rebel spokesman Arnu Ngutulu Lodi told AFP. They were later moved by car, he said.

The captives, who were involved in a road-building project in South Kordofan, had been held since January 28 when the SPLM-N destroyed a Sudanese military convoy between Rashad town and Al-Abbasiya and took over the area, the rebels said.

ICRC said it was not involved in negotiations to free the Chinese.

According to Xinhua the workers were taken after a rebel attack on their camp.

Sudan's foreign ministry spokesman Al-Obeid Meruh said that in addition to the 29 freed Chinese, 17 others had earlier been "released" by the Sudan Armed Forces but one other Chinese died.

"His body was found yesterday," Meruh said.

Lodi said he did not know about that.

Chinese embassy officials in Khartoum could not be reached on Tuesday.

Lodi said discussions about the Chinese workers began last week when SPLM-N chairman Malik Agar met a Chinese diplomat and asked Beijing to use its influence with Khartoum to help badly needed aid to reach the war zone.

Agar's talks, in Addis Ababa with the Chinese ambassador to Ethiopia, were followed by more negotiations in Kenya, Lodi said.

He added the rebels did not set any pre-conditions for the workers' "evacuation".

"From the beginning we were saying they were not hostages" -- a term used by Sudan's military.

China is Sudan's major trading partner, the largest buyer of Sudanese oil and a key military supplier to the Khartoum regime.

Along with the 29 Chinese, the rebels say they captured seven suspected Sudanese national security agents, one of whom later fled.

"We are now also ready to release the remaining six," Lodi said.

Sudan has severely restricted the work of foreign relief agencies in South Kordofan and nearby Blue Nile state, where a similar war began in September.

About 30,000 people fled when the rebels took control of villages in the Al-Abbasiya area on January 28, the United Nations said.

The UN has backed statements by the United States that there could be a famine unless urgent aid is allowed to enter South Kordofan and Blue Nile.

burs-it/hkb

]]> Wed, 08 FEB 2012 08:48:15 AEST Rome (AFP) Feb 7, 2012 - Italy was set to hold emergency talks on Tuesday aimed at maximising gas supplies to vulnerable households as the cold snap tightened its grip on the country and the death toll rose to 26.

Life in the centre of Rome returned to normal after days of chaos in the wake of the heaviest snowfall in 27 years, but schools remained closed and thousands in the surrounding region were still without electricity or heating.

Snow continued to fall in the north of Italy, with temperatures dropping to minus 25 degrees Celsius (minus 13 degrees Fahrenheit) in Marcesina on the shores of Lake Garda, and black ice in Calabria and Sardegna in the south.

A 68-year-old lorry driver from Bologna, who froze to death in his vehicle after sleeping in it, was found on Monday. The bodies of a pensioner and a homeless Moldovan woman were also discovered several days after they died.

In the town of L'Aquila, devastated by an earthquake in 2009, snowed-in residents warned of food shortages and wolves scavenged in the white, deserted streets of the nearby town of Trasacco, the Corriere della Sera daily said.

The economic development ministry activated a plan Monday to reduce gas supplies to industrial clients and switch from gas to oil-fired power stations amid fears of another cold wave in Russia which could limit supplies to Italy.

"The situation is certainly critical because the flows from Russia and France have diminished but the situation is being monitored," Economic Development Minister Corrado Passera told reporters.

Energy policy expert and former minister Alberto Clo' told Il Mattino newspaper: "There is no need to panic, Italy will not run out of gas."

"There won't be any scenes like The Day After Tomorrow," he said, in reference to the 2004 apocalyptic film about a modern-day ice age.

"After a mild winter and with industry running at low capacity, we haven't drawn very much yet from our reserves," he said.

]]> Wed, 08 FEB 2012 08:48:15 AEST Khartoum (AFP) Feb 7, 2012 - A group of Chinese workers "kidnapped" by rebels in southern Sudan 11 days ago have been freed and flown to Kenya, the foreign ministry said on Tuesday.

"The Sudanese authorities allowed a Red Cross plane to take them from Kauda to Nairobi ... this Tuesday morning where they were given to the Chinese embassy there," the statement said.

The statement did not give the number of Chinese freed.

The Kauda area in the Nuba Mountains of South Kordofan state has been the scene of fighting since June between government troops and rebels formerly aligned with the rulers of now independent South Sudan.

Sudan People's Liberation Movement-North (SPLM-N) spokesman Arnu Ngutulu Lodi told AFP he would comment later Tuesday, but the release comes a day after he said he expected the 29 Chinese workers to be released "very soon."

Lodi said on Monday the rebels were in communication with the Chinese government, although not through a six-member mission sent by Beijing to Khartoum to help secure a release.

The captives, who were involved in a road-building project in South Kordofan, had been held since January 28 when the SPLM-N destroyed a Sudanese military convoy between Rashad town and Al-Abbasiya and took over the area, the rebels said.

A spokeswoman for the Geneva-based International Committee of the Red Cross (ICRC) declined to comment except to say: "We are not involved in negotiations" over the Chinese.

The SPLM-N maintained that all 29 Chinese were safe during their captivity.

According to China's official Xinhua news agency, the workers were taken after a rebel attack on their camp.

It reported on Monday that Beijing had been informed by Sudanese authorities that the body of one Chinese, who went missing in the attack, had been found. That person was apparently not among the 29 captured.

Sudanese official media carried similar reports citing the South Kordofan state government.

Chinese embassy officials in Khartoum could not be reached on Tuesday.

Last week, SPLM-N chairman Malik Agar met a Chinese diplomat and asked Beijing to use its influence with Khartoum to help badly needed aid to reach the war zone, Lodi said.

Agar held the talks in Addis Ababa with the Chinese ambassador to Ethiopia.

China is Sudan's major trading partner, the largest buyer of Sudanese oil and a key military supplier to the Khartoum regime.

Sudan has severely restricted the work of foreign relief agencies in South Kordofan and nearby Blue Nile state, where a similar war began in September.

About 30,000 people fled when the rebels took control of villages in the Al-Abbasiya area on January 28, the United Nations said.

The UN has backed statements by the United States that there could be a famine unless urgent aid is allowed to enter South Kordofan and Blue Nile.

]]> Wed, 08 FEB 2012 08:48:15 AEST Al-Nashwa, Iraq (AFP) Feb 7, 2012 - Commercial traffic has resumed on the strategic Shatt al-Arab waterway after 31 years, with the official opening of a port for oil giant Shell, an Iraqi official said on Tuesday.

Part of the 200 kilometre (120 mile) long waterway forms a section of the border with Iran. An unresolved boundary dispute was a major reason cited by now-executed dictator Saddam Hussein for the 1980-88 war with Iran, which resulted in the waterway's closing.

"The Shatt al-Arab is reborn again after being closed for 31 years," Mehdi Badah Hussein, the head of the joint committee to develop Majnoon oil field, told AFP at a ceremony to open the port.

"There are other harbours on the Shatt al-Arab, but commercially, this is the first time Iraq succeeded in turning the Shatt al-Arab into a maritime passage which will help in transporting heavy equipment," Hussein said.

A consortium of Anglo-Dutch oil giant Shell and Malaysia's Petronas signed a contract with Iraq in January 2010 to operate the enormous Majnoon field.

"We believe this is the first jetty harbour to bring in ships that can come from all over the world back off the river with heavy equipment in 31 years," Shell Majnoon general manager Ole Myklestad told AFP.

"This is very important," Myklestad said during the ceremony, as it is the first time in decades that a commercial harbour was opened here.

He said the first ship arrived to the harbour on January 5.

]]> Wed, 08 FEB 2012 08:48:15 AEST London (AFP) Feb 7, 2012 - BP returned to profit with a bang last year, posting net earnings of $23.9 billion on Tuesday as the British energy giant prepares for a criminal trial linked to the US Gulf of Mexico oil spill disaster.

BP announced adjusted profit after tax equivalent to 18.2 billion euros for 2011, as higher oil prices offset a drop in production, according to a group statement.

The company had suffered a loss of $4.9 billion in April 2010 when an explosion on the BP-leased Deepwater Horizon rig killed 11 workers, sent millions of barrels of oil into the sea and left the company with huge compensation costs.

Including changes in the value of BP's energy inventories, net profit hit $25.7 billion in 2011, the group added Tuesday.

"BP is on the right path," the company's chief executive Bob Dudley said in the release.

"2012 will be a year of increasing investment and milestones as we build on the foundations laid last year."

BP said that it had committed $1.0 billion "for the early restoration of natural resources following the Deepwater Horizon accident in 2010."

It added that by the end of 2011 it had paid more than $7.8 billion to meet claims and government payments, while $15.1 billion had been paid into the trust fund used to compensate victims of the oil spill disaster.

The British energy giant and its partners are set to face a trial beginning February 27 in New Orleans that consolidates a host of lawsuits seeking damages for economic losses, injury claims and environmental violations.

The trial also aims to resolve competing claims of liability among BP and its subcontractors, rig operator Transocean and Halliburton, which was responsible for faulty cement work on the Macondo well, whose leak triggered the oil disaster.

Commenting on the upcoming case, Dudley said on Tuesday: "As I have said before, we are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial."

BP has already booked a $40 billion charge to cover cleanup efforts, compensation to fishermen and thousands of others affected by the spill and massive government fines and penalties that are still being assessed.

To meet its costs, BP has committed to selling $38 billion worth of assets before the end of 2013 and has so far clawed back roughly half the amount.

On Tuesday, BP said it planned to sell its liquefied petroleum gas filling operations in a number of countries for an undisclosed amount.

BP's share price meanwhile rose 0.25 percent to 490.85 pence following the earnings update and in early trading on London's benchmark FTSE 100 index, which was steady overall.

The group had also announced that it was raising its dividend by 14 percent to 8.0 cents a share for the fourth quarter of 2011 -- the first rise since the company resumed paying dividends a year ago.

"Helped along by the strength of the oil price, the company has been able to report a significant upswing in earnings, albeit largely in line with estimates," said Richard J Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

"Meanwhile, this extra cash generation has allowed a generous increase in the dividend payment which marks a sign of future management confidence."

]]> Wed, 08 FEB 2012 08:48:15 AEST Baghdad (AFP) Feb 7, 2012 - Huge numbers of Iranian pilgrims visit Shiite holy places in Iraq each year but businesses have grown wary of transactions in the Islamic republic's rial as it declines in value under sanctions.

In Kadhimiyah in northern Baghdad, restaurants and shops that sell gold and clothes around the two shrines of Shiite imams Musa Kadhim and Mohammed Jawad are crowded with visitors.

Ali Mohammed, a 42-year-old who owns a money exchange shop, said the rial's value has declined sharply.

"This decline has caused losses for us," he said, seated behind a glass barrier and holding paper money bearing a picture of the late Iranian supreme leader Ayatollah Ruhollah Khomeini.

"A month and a half ago, I was dealing with around 20,000 dollars of Iranian rials every day, but now I am only dealing with 1,000 dollars" a day, the trader said.

"I will stop buying (rials) gradually, and if it keeps declining, I will stop dealing with it completely.

Iran has been hit by sanctions imposed by the United States and Europe over its controversial nuclear programme, and its currency has suffered.

Jassem al-Amli, 55, who also owns a money exchange shop in Kadhimiyah, said that "the value of the rial is now around 18,000 for one dollar," while "two months ago, the value was 10,000 rials per dollar."

At the border with Iran, the value of the rial is even lower, with a dollar trading for 20,000 rials at the Zurbatiya border crossing to Iran.

One of the officials at the crossing told AFP that "dozens of Iranian (currency) traders are working on a daily basis to buy dollars."

"Before the collapse of the Iranian rial, they were ... not looking for dollars," the official said.

Amli, who has worked in money exchange for 10 years, said: "I knew this from the beginning and I stopped dealing with large amounts of (Iranian) money because I knew there would be pressures and more sanctions ...

"We feel sorry for the Iranian visitors because they came to Iraq holding a specific amount of money, and then suddenly, they were taken by surprise by the decline of their local currency."

In the central shrine city of Najaf, visited by two million Iranians a year, the decline of the Iranian currency is frustrating for the money exchange shops and also for hotel owners who depend on Iranian visitors.

Hussein Ikhwan, a 36-year-old who works for an exchange firm in Najaf, said that "the price of exchanging the Iranian (rial) is starting to be a problem for us," due to a lack of profit in dealing with the currency.

Uday Bahash, 35, who owns a shop in Najaf's main market, said that prices in rials for goods have doubled without any additional profit for shopowners.

Iraqi Tourism Minister Liwaa Smaisim told AFP that: "The decline of the Iranian currency has had only a slight impact on religious tourism, but even so, this has not much changed the number of Iranian visitors."

Khaled Abu al-Hijaj, 40, who owns a hotel in central Najaf, said: "Travel agencies are starting to lose money and trying to recover these losses by paying us with Iranian (rials), while they used to pay with dollars."

The shortage of foreign currency in Iran is pushing its traders to try to buy from outside sources, and Iraq, which has billions of dollars in trade with Iran per year, is a potential source.

Iraq's central bank has since February 1 enacted measures to identify those who buy dollars, as some are believed to be frontmen, Mudher Mohammed Saleh, deputy governor of the central bank, told AFP.

Banks that buy dollars from the central bank must now provide the identity of whoever placed the order and "prove that they have an account in the bank and the origin of their income," Saleh said.

"We are concerned that some people buy dollars on behalf of others," he said, without elaborating.

Asked if Iranian and Syrian traders were trying to buy dollars, Saleh said: "This increase in demand for dollars, while the region has serious problems, led us to put the new procedures in place."

]]> Wed, 08 FEB 2012 08:48:15 AEST Brussels (AFP) Feb 6, 2012 - Chemicals giant Solvay hailed Monday the successful entry into service in Flanders of what it said was the largest fuel cell of its type in the world.

A super-battery that produces enough electricity to power nearly 1,400 homes, the Proton Exchange Membrane (PEM) fuel cell has been producing clean electricity at a "steady rate" for weeks at a SolVin plant part-owned by Germany's BASF in Antwerp, northern Dutch-speaking Belgium.

SolVin is a market leader in vinyl, or PVC production.

The fuel cell converts the chemical energy from hydrogen into clean electricity through an electrochemical reaction with oxygen, and "has generated over 500 MWh in about 800 hours of operation," Solvay said in a news release.

The company said this equates to the electricity consumption of 1,370 families over the same period.

Fuel-cell technology is tipped by developers as a future power solution for everything from cars to ships.

Flanders has benefited from a 14-million-euro investment in this applied technology, with the EU, the Dutch and the Belgian Flemish governments backers of Solvay's 5.0-million euros investment.

]]> Wed, 08 FEB 2012 08:48:15 AEST Seattle WA (SPX) Feb 07, 2012 - Stop wrangling over global warming and instead reduce fossil-fuel use for the sake of the global economy.

That's the message from two scientists, one from the University of Washington and one from the University of Oxford in the United Kingdom, who say in the current issue of the journal Nature (Jan. 26) that the economic pain of a flattening oil supply will trump the environment as a reason to curb the use of fossil fuels.

"Given our fossil-fuel dependent economies, this is more urgent and has a shorter time frame than global climate change," says James W. Murray, UW professor of oceanography, who wrote the Nature commentary with David King, director of Oxford's Smith School of Enterprise and the Environment.

The "tipping point" for oil supply appears to have occurred around 2005, says Murray, who compared world crude oil production with world prices going back to 1998. Before 2005, supply of regular crude oil was elastic and increased in response to price increases. Since then, production appears to have hit a wall at 75 million barrels per day in spite of price increases of 15 percent each year.

"As a result, prices swing wildly in response to small changes in demand," the co-authors wrote. "Others have remarked on this step change in the economies of oil around the year 2005, but the point needs to be lodged more firmly in the minds of policy makers."

For those who argue that oil reserves have been increasing, that more crude oil will be available in the future, the co-authors wrote: "The true volume of global proved reserves is clouded by secrecy; forecasts by state oil companies are not audited and appear to be exaggerated. More importantly, reserves often take 6 - 10 years to drill and develop before they become part of the supply, by which time older fields have become depleted."

Production at oil fields around the world is declining between 4.5 percent and 6.7 percent per year, they wrote.

"For the economy, it's production that matters, not how much oil might be in the ground," Murray says. In the U.S., for example, production as a percentage of total reserves went from 9 percent to 6 percent in the last 30 years.

"We've already gotten the easy oil, the oil that can be produced cheaply," he says. "It used to be we'd drill a well and the oil would flow out, now we have to go through all these complicated and expensive procedures to produce the oil."

The same is true of alternative sources such as tar sands or "fracking" for shale gas, Murray says, where supplies may be exaggerated and production is expensive.

Take the promise of shale gas and oil: A New York Times investigative piece last June reported that "the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells."

Production at shale gas wells can drop 60 to 90 percent in the first year of operation, according to a world expert on shale gas who was one of the sources for the commentary piece.

Murray and King built their commentary using data and information from more than 15 international and U.S. government reports, peer-reviewed journal articles, reports from groups such as the National Research Council and Brookings Institution and association findings.

Stagnant oil supplies and volatile prices take a toll on the world economy. Of the 11 recessions in the U.S. since World War II, ten were preceded by a spike in oil prices, the commentary noted.

"Historically, there has been a tight link between oil production and global economic growth," the co-authors wrote. "If oil production can't grow, the implication is that the economy can't grow either."

Calculations from the International Monetary Fund, for example, say that to achieve a 4 percent growth in the global economy in the next five years, oil production must increase about 3 percent a year.

"Yet to achieve that will require either an heroic increase in oil production, ... increased efficiency of oil use, more energy-efficient growth or rapid substitution of other fuel sources," according to the commentary.

"Economists and politicians continually debate policies that will lead to a return to economic growth. But because they have failed to recognize that the high price of energy is a central problem, they haven't identified the necessary solutions: weaning society off fossil fuel."

The commentary concludes: "This will be a decades-long transformation and we need to start immediately. Emphasizing the short-term economic imperative from oil prices must be enough to push governments into action now."

Nature commentary

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