Drilling Ban Will Have Long-Term Effects

Crisis in the Gulf
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Crisis in the Gulf

The US ban on offshore drilling could have long-term consequences on oil prices, Nobuo Tanaka, executive director of the International Energy Agency, told CNBC Monday.

Tanaka made his comments on the eve of the three-month anniversary of the BP Gulf of Mexico oil spillthat led to the moratorium.

“We have heavily dependence on offshore, half of the new capacity comes form offshore,” said Tanaka. Tanaka was speaking from the two-day energy summit in Washington, hosted by US Energy Secretary Steven Chu.

Energy ministers from some 20 countries, including Canada, Mexico, the United Arab Emirates and Norway, are attending.

“We think this tragic accident in the gulfis a reminder that we have to move away from fossil fuels and go into the renewable energy, nuclear, all these clean technologies,” said Tanaka.

In Tanaka’s address to the body earlier on Monday, he implored them to seek about ways to conserve energy sources and to use other renewable sources of energy.

He estimated that $46 trillionis needed to reduce carbon emissions 50 precent by 2050 and encouraged group members, both rich nations and those in the developing world, to commit the funds to make that happen.

“We asked them to act now, not to wait,” Tanaka added. “Standstill is no option. Act now.”