DrumBeat: October 1, 2008
Crude prices ‘to drop from fourth quarter of this year’
Oil prices will begin to ease from fourth quarter of this year as the market will witness substantial increase in spare capacity, according to a forecast by a US think-tank.
Global Insight, the world’s leading company for economic and financial analysis and forecasting, said crude prices will drop as the supply and demand projections indicate that the world is set to see a significant increase in spare capacity over the next six to 18 months, following a string of new projects entering production.
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Oil dips to $100 ahead of U.S. stocks data
LONDON (Reuters) – Oil dipped toward $100 a barrel on Wednesday ahead of weekly U.S. oil data, which was expected to show an increase in crude oil inventories.
U.S. crude fell 30 cents to $100.34 a barrel by 7:42 a.m. EDT, after rising by more than $2 to as high as $102.84.
U.S. driving drops for 9th straight month
WASHINGTON (Reuters) – Motorists on U.S. roads applied the brakes hard on driving when gasoline prices peaked over the summer at more than $4 per gallon, according to the latest government figures released on Tuesday.
The 3.6 percent year-over-year decline in miles traveled on all roads in July cemented a downward trend begun nine months ago in response to rising pump prices and economic weakness.
While the June drop was 5 percent, the July drop was still sharp and may be more illustrative of consumer habits and concerns about the economy. July is a usually heavy driving period marked by traditional summer vacations and the Independence Day holiday.
Five Reasons Why the $700 Billion Banking Bailout Will Translate into $250 Oil
I’ve been predicting record oil prices for a number of years now, so when crude oil prices recently plunged from their record highs, I warned investors and consumers that the decline was nothing more than a temporary respite.
But now it’s clear that the fallout from the $700 billion banking bailout pact will virtually guarantee that my prediction will come true.
Of mavericks and market meltdowns
Houston’s Matt Simmons, the very successful investment banker, prophet of $300 or $400 per barrel oil and subject of a lengthy profile in the current Fortune, sees the present problem much less starkly.
“The Houston economy is as strong as horse radish,” he says. And: “I think basically we have total gridlock in Washington, but Armageddon is highly unlikely.”
Energy Stocks Ready to Melt Down
It doesn’t take a super-secret report to know that energy stocks have been on fire. Over the past five years, the energy sector has outperformed the S&P 500 by 125 points. However, recent declines in oil prices may be signaling an end to the easy money.
ALBANY — Stephen Leeb, an author and editor who in 2006 predicted economic collapse and $200-a-barrel oil, will talk about the peak oil theory tonight.
Leeb, editor of The Complete Investor, a financial newsletter, will speak at an energy symposium at The College of Saint Rose organized by the Capital Region Energy Forum, an advocacy and education group.
Leeb does not hide his feelings about peak oil, the theory that the world has hit the zenith of oil production worldwide, which would spark a global economic crisis as demand starts to outstrip supply.
“You need a solution or else the world is going to be in desperate straits,” Leeb said.
Logistics News: Does U.S. Need a “No Oil” Contingency Plan?
Even a modest disruption in the flow of oil could have a devastating impact on the economy and commerce, especially the flow of goods.
“First the trucks and shippers will curtail shipments. Shelves will become scant and in some cases bare,” Black cheerfully notes in the book’s first pages. “Quickly, unemployment will become epidemic as people are laid off due to economic contraction or because many will simply be unable to get to work. That in turn will worsen the country’s economic convulsion. Mobile America will cease to exist as we knew it because transportation via automobiles, taxis, buses, planes and other vehicular traffic will become an ever more unaffordable luxury. When people cannot get from Point A to Point B, the nation’s economic vitality will quickly wither.”
Energy prices ‘stronger for longer’, says BP
Surging demand in developing countries and global fossil fuel supply constraints are creating volatility in energy markets and will keep prices up over the long term, BP’s Chief Economist Christof Rühl told EurActiv in an interview.
…BP’s chief economist vehemently countered the idea that the world was facing a physical shortage of oil as proposed by ‘peak oil’ theorists. “I have no reason to accept [peak oil] as a valid statement either on theoretical, scientific or ideological grounds,” he said.
“There is no resource constraint at the moment for oil. There is enough oil if you’re willing to accept the costs – including the environmental costs for sources like tar sands,” he added.
(The interview itself is here.)
Canada: Candidates focus on rural, agricultural issues at meeting
McQuail accused agriculture leaders and bureaucrats of a “subtle Stalinism” that he said has aimed to “industrialize and collectivize Canadian agriculture.”
“They’ve done a good job at marginalizing family farmers,” he said, “denigrating them as hobby farmers after structuring agriculture so they can’t earn a living from a modest land base.”
McQuail said industrial agriculture is on a shaky foundation, however, and he believes that in the peak oil period and post-petroleum economy, “we are going to need more family farmers.”
Gas lines shorter in largest city hit by shortage
ATLANTA – Lines eased somewhat Tuesday in Atlanta, the largest city hit by a hurricane-induced gas shortage in the southeast, as Georgia’s governor waited for a White House answer to his request to release more crude oil.
Gov. Sonny Perdue sent a letter to President Bush on Monday requesting that a “signficant amount” of crude oil be released from the Strategic Petroleum Reserve to help ease the shortage.
Perdue contends that while many Gulf Coast refineries are operating again after disruptions from Hurricanes Gustav and Ike last month, not all are receiving enough oil to return to full capacity.
Kinder Morgan Oil Terminal Fire Doused in Ohio
(Bloomberg) — Firefighters doused a fire of burning oil at a terminal operated by a unit of Kinder Morgan Energy Partners LP yesterday morning near Cincinnati, WLWT radio reported, citing fire department Captain Michael Washington.
Oil sands safe from U.S. law, advocates say
U.S. environmentalists have declared another victory in their efforts to protect legislation that threatens Canada’s booming oil sands, but oil sands advocates say there is no triumph to celebrate.
Russia’s crude export duty down to $372.2 per ton as of Oct. 1
MOSCOW (RIA Novosti) – Russia’s crude oil export duty is down by almost 25%, from $485.8 to $372.2 per metric ton, as of Wednesday.
Prime Minister Vladimir Putin signed off on the cabinet’s September 19 decision to reduce crude export duty, made in the wake of a sharp decline in oil prices in September.
Northwest profitable with oil at $100: CEO
TOKYO (Reuters) – Northwest Airlines Corp (NWA.N), which is set to be acquired by Delta Airlines (DAL.N), can be profitable with oil at $100 per barrel, Doug Steenland, the company’s chief executive, said on Wednesday.
Despite the turmoil in credit markets, Steenland said he was confident the merged airline would have sufficient liquidity to manage its operations well into the future, noting that the airline would have $6 billion in cash on closing.
Shell to take big stake in Sibir by year-end
MOSCOW, (Reuters) – Royal Dutch Shell is poised to take a large stake in its Russian partner company Sibir Energy before the end of this year, the Financial Times reported on Wednesday.
Nigerian militants ‘dodge’ arrest
Militants in Nigeria’s oil-rich Niger Delta region say none of their fighters have been arrested by the military.
On Tuesday, the army said more than 400 men had been arrested following a recent week-long campaign of militant attacks on oil infrastructure.
But the Movement for the Emancipation of the Niger Delta (Mend), said the arrests were “random harassment”.
The latest news from the International Atomic Energy Agency (IAEA), aside from a gloomy portrayal of an international agency starved of cash and manpower, is that it cannot confirm the absence of a clandestine Iranian nuclear program. The head of the United Nations’ watchdog, Mohamad ElBaradei, should know better that this is not his agency’s mandate to begin with, no matter how much new affection is poured on the troubled agency by Western powers.
Hence the question: is there a discrete quid pro quo for the simultaneous announcements whereby the IAEA tags along with the United States’ plan of action with regard to Iran, as long as Washington promises no military action, and then it is rewarded with Washington’s and London’s power of the purse?
Africa Command is operational, but skepticism persists
WASHINGTON (AFP) — The US military’s Africa Command becomes fully operational on Wednesday, but it still faces skepticism about its intentions as it seeks to provide security assistance to African states.
Military, Business Leaders Release Comprehensive Energy Security Plan
The Energy Security Leadership Council (ESLC), a project of Securing America’s Future Energy (SAFE), yesterday released A National Strategy for Energy Security, a comprehensive plan that offers the public and policymakers specific solutions to the very real threats posed by our nation’s dependence on oil.
The National Strategy lays out a pathway toward a long-term goal of an electrified transportation system that is no longer dependent on oil, along with the interim policies needed to reach that goal while keeping our economy and our nation strong and secure.
“Our oil dependence has put our nation at unacceptable risk,” ESLC Co-Chairman Frederick W. Smith, Chairman, President and CEO of FedEx Corp., said.
China’s coal export volume on falling trend
China’s coal exports have been falling sharply in volume since June, and the total export volume of this year is predicted to be approximately the same as last year, according to Customs statistics.
French biofuel tax revision threatens jobs – makers
PARIS (Reuters) – Thousands of jobs could be lost in the French biofuel sector if the government’s proposal to scrap tax advantages for the grain-made fuels by 2012 is adopted, ethanol makers said on Tuesday.
World’s largest uranium refinery plans $6M expansion
Over the next 20 years, world demand for electricity is expected to double. Cameco’s uranium sales volume has tripled since 1991.
According to the World Nuclear Association website, there are currently 439 reactors operating around the world, 36 under construction, 97 reactors planned and 221 proposed. Canada has 18 operable reactors, two under construction, three planned and four more are proposed.
Farmland birds not bothered by wind turbines, study finds
The sight and sound of ranks of whirling 100-metre high turbines had little effect on the numbers of birds in the area, scientists found.
The results will disappoint conservation groups, who claim turbines pose a threat to birds but will provide a boost for wind energy groups who want to erect hundreds of wind farms around Britain.
Solar Energy From An Unlikely Source: The Amish
On the porch of a white Lancaster County farmhouse in Pennsylvania set between corn and soy bean fields, an Amish woman makes apple sauce the old-fashioned way: She crushes them in a manual press. Chickens run across the yard. A long line of laundry dries in the sun.
But at her husband’s dairy equipment shop next door, the scene is quite different. Energy-saving fluorescent bulbs light the basement. And wiring has just been installed to run heavy machinery off the sun.
Despite their reclusion from the modern world, the plain-living Amish are leading the way when it comes to embracing solar energy.
Maine study weighs impact of more wood heating
AUGUSTA, Maine (AP) — Burning more wood for heat could save homeowners money in oil-dependent Maine, but a task force in the nation’s most forested state cautioned that care is needed to avoid health problems and damage to the wood products industry.
Revealed: oil-funded research in Palin’s campaign against protection for polar bear
The Republican Sarah Palin and her officials in the Alaskan state government drew on the work of at least six scientists known to be sceptical about the dangers and causes of global warming, to back efforts to stop polar bears being protected as an endangered species, the Guardian can disclose. Some of the scientists were funded by the oil industry.
In official submissions to the US government’s consultation on the status of the polar bear, Palin and her team referred to at least six scientists who have questioned either the existence of warming as a largely man-made phenomenon or its severity. One paper was partly funded by the US oil company ExxonMobil.
Australia: How we can be a green super power
Al Gore says the United States should embark on a “man on the moon”-style effort to satisfy all of America’s electricity needs by renewable energy within a decade. Just 10 years. That’s an incredibly bold vision – a real stretch goal. But it is also what’s needed to avert a climate crisis.
So why not do the same in Australia? Here, it could become a “nation-building” symbol of pride, akin to the 19th Century construction of the Overland Telegraph Line or the post-WW II Snowy Hydro Scheme.
Eating kangaroos could help fight global warming: scientist
SYDNEY (AFP) – An offbeat suggestion that Australians should eat kangaroos instead of cattle and sheep has been given a scientific stamp of approval by the government’s top climate change adviser.
The belching and farting of millions of farm animals is a major contributor to Australia’s greenhouse gas emissions, Professor Ross Garnaut noted in a major report to the government on global warming.
Kangaroos, on the other hand, emit negligible amounts of methane gas.
Scientists aim to boost Southern Ocean CO2 monitoring
SINGAPORE (Reuters) – Australian scientists set sail later this week on a voyage that could lead to better data from the Southern Ocean, which plays a major role in acting as a brake on climate change.
Oceans absorb vast amounts of carbon dioxide and the Southern Ocean between Australia and Antarctica plays the greatest role of all the world’s oceans, scientists say.
Melting ice magnifies Arctic risks
The news that Lloyd’s insurer Catlin is sponsoring a major scientific expedition to capture vital data for scientists studying the impact of global warming on the Arctic ice cap is a further sign of increasing concern at the uncertain future of the region.
…The project — the Catlin Arctic Survey — will be led by British explorer Pen Hadow. The programme of measurements will include some of the most accurate and detailed observations of the thickness of the permanent Arctic ice. The measurements will be taken as part of a pioneering surface survey over a 1,200-mile route from the Canadian coast to the North Geographic Pole, beginning in February 2009.
Failure on climate change will ‘haunt humanity’: Australian expert
SYDNEY (AFP) – Failure to curb global warming would “haunt humanity” forever, Australia’s top climate adviser said Tuesday as he urged the country to cut greenhouse gas emissions by at least 60 percent by 2050.
Ross Garnaut, presenting his long-awaited report on climate change, said Australia was more vulnerable to rising temperatures than any other developed country because of its hot, dry climate and faced environmental destruction and a major decline in farming in nothing was done.
“If we fail, on a balance of probabilities, the failure of our generation will haunt humanity until the end of time,” Garnaut told reporters in Canberra.
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