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3 Oil-Rich Countries Face a Reckoning
CARACAS, Venezuela — As the price of oil roared to ever higher levels in recent years, the leaders of Venezuela, Iran and Russia muscled their way onto the world stage, using checkbook diplomacy and, on occasion, intimidation.
Now, plummeting oil prices are raising questions about whether the countries can sustain their spending — and their bids to challenge United States hegemony.
… Daniel Yergin, chairman of Cambridge Energy Research Associates, a consulting firm in Cambridge, Mass., said oil states were facing something of a reckoning. Originally, he said, they saw the economic crisis as a problem mainly for the United States — but then oil prices went into free fall.
“Now, the producers are experiencing a reverse oil shock,” Mr. Yergin said. “As revenue went up, government spending went up and expectations of a continuing windfall led to greater and greater ambitions. Now they are finding how integrated they are into this globalized world.”
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Oil above US$74 as OPEC eyes production cut
Oil prices were hovering above US$74 a barrel Tuesday as investors expected OPEC to try to halt a three-month slide in prices by cutting production quotas at least 1 million barrels a day.
At the same time, gains by the U.S. dollar against the euro were putting the brakes on any gains in oil prices.
“The general trend is still of uncertainty,” said analyst Olivier Jakob of Petromatrix in Switzerland.
Oil price to fall as Saudi Arabia resists cut: report
MILAN (Reuters) - The price of oil will probably keep falling as long as Saudi Arabia resists pressure from other OPEC member states to cut production, according to the country’s former oil minister.
Sheikh Ahmed Zaki Yamani told Italian daily Corriere della Sera in an interview published on Tuesday member states that were only interested in keeping the price high had already cut production.
“They are already under their quota, so a cut (that would make a difference to the price) must above all come from Saudi Arabia,” he said.
Asked if Iran and Venezuela were among those pushing for a cut, he said: “Also Libya, Algeria and even Nigeria.”
Iran wants OPEC cut of at least 2mln bpd
TEHRAN (AFP) – Iran’s oil minister said on Tuesday that Tehran believes OPEC should cut production by between two million and 2.5 million barrels a day, and that prices could go higher than 150 dollars a barrel.
“The market should find a stable condition, and given the eight to 10 percent decrease in demand and also given the oil stockpile I think a decrease of between two and 2.5 million barrels a day can bring a stable status to the market,” Gholam Hossein Nozari said at a press conference in Tehran.
OPEC treads carefully on output cut
For OPEC, the speed of the descent revives bad memories of the 1998 price collapse when oil fell to less than $10 a barrel.
“They need to cut production fast, but they’re probably not going to be able to cut it as fast as world growth is slowing,” said Michael Lewis of Deutsche Bank.
He predicted Friday’s meeting in Vienna could reduce output by between one and 1.5 million bpd from an agreed ceiling of 28.8 million bpd and that would just be the start.
OPEC exports down 900,000 bpd to October 5 - LMIU
LONDON, Oct 21 (Reuters) - OPEC seaborne exports, excluding Ecuador, fell 900,000 barrels per day (bpd) in the four weeks to October 5 with Gulf producers accounting for most of the shrinkage, Lloyd’s Marine Intelligence Unit said on Tuesday.
The London-based consultancy that tracks oil tanker shipments from 12 OPEC producers, including Iraq, said exports fell to 22.766 million bpd, down from 23.666 million bpd in the four weeks previous to September 7.
Excerpt: ‘Tar Sands’, by Andrew Nikiforuk
Declaration of a Political Emergency
The world’s oil party is coming to a dramatic close, and Canada has adopted a new geodestiny: providing the United States with bitumen, a low-quality, high-cost substitute.
Northern Alberta’s bituminous sands, a national treasure, are the globe’s last great remaining oil field. This strategic boreal resource has attracted nearly 60 per cent of all global oil investments. Every major multinational and nationally owned oil company has staked a claim in the tar sands.
Neither Canada nor Alberta has a rational plan for the tar sands other than full-scale liquidation. Although the tar sands could fund Canada’s transition to a low-carbon economy, government has surrendered the fate of the resource to irrational global demands. At forecast rates of production, the richest deposits of bitumen will be exhausted in forty years.
Engineers warn of imminent oil shock
Engineers are warning politicians that the lull in oil prices will be short-lived, and New Zealand is headed for sustained job losses unless it boosts energy efficiency efforts.
Senior North Shore City transport strategist Archer Davis, speaking on behalf of Engineers for Social Responsibility, said a conservative estimate of a 4 per cent annual decline in oil supply raises the prospect of a 12 per cent contraction of New Zealand’s economy over 15 years.
Pickens’ natural gas idea picking up steam
What will power your car a decade from now? Billionaire T. Boone Pickens is betting big that it will be compressed natural gas.
The former oil tycoon has put $58 million into touting his “Pickens Plan” in TV ads, YouTube videos, town hall meetings and media interviews to get people talking about boosting wind power for electricity and using the nation’s natural gas supply for the next auto fuel.
The publicity is working. After years of a relatively low profile in the alternative fuel discussion, compressed natural gas or “CNG” vehicles are now at the forefront of a national debate.
Iran sees consensus to set up “gas OPEC”
TEHRAN — Iran’s oil minister said on Tuesday there was a consensus to set up a “gas OPEC,” speaking after tripartite talks with his Qatari counterpart and the head of Russia’s Gazprom.
“We have made major decisions,” Oil Minister Gholamhossein Nozari told a news conference. “There is a demand to form this gas OPEC and there is a consensus to set up gas OPEC.”
Russia, Iran and Qatar are ranked the first, second and third biggest holders of natural gas reserves in the world.
Palin backs shipping Alaskan LNG to Japan
On the campaign trail, Sarah Palin says repeatedly that America must tap its own natural gas and oil reserves to become energy-independent.
But the Alaska governor and GOP vice presidential candidate has pushed the federal government to allow a liquefied natural gas plant to continue exporting to Asia — the only such plant in the United States that sends the product overseas.
Special Euromoney Coverage: Lessons learned from Egypt’s energy leaders
Salah Hafez of NPC advises investment in economically sound sectors, which will remain vital despite the current global economic slowdown.
“People will continue eating, going out and using fuel,” he argues.
He sees the current slump in oil prices as temporary. Advocating the peak oil theory, he points out that seeing no real energy alternatives in the near future, rising demand for oil in face of dwindling reserves will drive prices up again.
Gas: NAPE calls for aggressive exploration activities
IN order for Nigeria to increase its present gas reserves from 182 Trillion cubic Feet (TcF) to 600tcf and become the fourth largest gas reserve in the world there has to be an intense and aggressive exploration for gas as there is for oil at present.
Gunmen seize Nigerian oil worker’s children in delta
PORT HARCOURT, Nigeria (Reuters) - Gunmen have kidnapped two children of a Nigerian oil worker in the Niger Delta oil city of Port Harcourt, police said on Tuesday.
The children were being driven to school when they were abducted in the Abuloma area of the city and taken to an unknown location, said Rita Abbey, police spokeswoman for Rivers state, of which Port Harcourt is the capital.
“They were kidnapped this morning by gunmen who were in a black jeep. They are a boy and a girl aged between 7 and 9, children of a Nigerian Shell worker,” Abbey said.
China says kidnappings won’t affect Sudan policy
BEIJING: China’s Foreign Ministry said Tuesday that Beijing’s close economic ties with Sudan wouldn’t be affected by last week’s kidnappings of nine Chinese oil workers in the country’s southwest.
Ministry spokesman Qin Gang said Chinese authorities are working to help free the captives, who were seized Saturday by unknown assailants in Kordofan province. Sudan’s government says they were abducted by a rebel group that has demanded a greater share for locals of the region’s oil wealth.
UK: Economy, shopping styles affect small businesses
When people choose not to pay the slightly higher prices at the local store, and make the 130 mile round trip to North Platte, Valentine or Broken Bow to do their shopping, it makes cash flow difficult for Ewoldt.
“Keeping the cash flowing is difficult,” he said. “With Affiliated [Foods] we’re supposed to buy $9,000/week in order not to have to pay extra fees.”
Hawaii outlines renewable energy goals
HONOLULU – Hawaii’s largest utility has signed on to a plan to move the state away from dependence on fossil fuels for electricity and ground transportation.
The goal is to create 70 percent of Hawaii’s energy use from clean energy sources by 2030. Currently, the state gets about 10 percent of its energy from renewable sources.
Under the latest agreement, Hawaiian Electric Co. commits to not build any new coal plants, integrate up to 1,100 megawatts of renewable energy into the power grid and convert existing fossil fuel generators to biofuels using locally grown crops.
Clean coal for cars has a dirty side
If the United States tried to achieve independence from foreign oil by making gasoline from vast reserves of domestic coal, the country would probably end up increasing its carbon emissions, a new study concludes.
Catalytic converter developer honored for car contribution
“The catalytic converter has had a profound impact on our environment,” says Jim Kliesch, senior engineer for the Union of Concerned Scientists. Advances in the catalytic converter, which rolled out on GM’s 1975 model-year cars, and computer-controlled fuel injection technology have all but eliminated tailpipe emissions, he says.
Today, that team of engineers will be honored for the first time for developing the catalytic converter, receiving the Great Moments in Engineering Award from information technology group GlobalSpec at a dinner in Detroit.
UK’s Brown says downturn will not affect green effort
LONDON (Reuters) - British Prime Minister Gordon Brown said on Tuesday the global economic downturn would not deflect the UK government from efforts to reduce Britain’s carbon emissions and combat global warming.
Do we need to go nuclear to stay green?
It’s the billion-dollar question. Will nuclear energy save the world from global warming? Nuclear power plants produce virtually zero carbon emissions throughout their lifecycle, but they are costly to build and environmentalists claim the money would be better spent on building renewable resources.
Is the Sun Setting on Solar Power in Spain?
This month Spain slashed the maximum capacity of solar farms that can claim subsidies from 1,200 MW to just 500 MW. Installed PV capacity has already tripled to 1,500 MW in under a year, should double again by 2010 to 3,000 MW, and more than triple to 10,000 MW by 2020. Spain also cut PV feed-in tariffs by about a third to around 33 eurocents per kilowatt hour. Solar-thermal executives fear the same fate within 24 months as new plants add solar power.
Study: California energy efficiency pays off
SAN FRANCISCO - California has saved about $56 billion in electricity costs and created 1.5 million jobs over 35 years by using energy more efficiently than other states, according to a new study.
The report released Monday by an economist at the University of California at Berkeley found that state policies that boost energy efficiency aren’t just good for the environment, they’re also good for the economy.
BBVA says to cut employee CO2 emissions 20 pct
MADRID (Reuters) - Spain’s BBVA will spend 19 million euros ($25.17 million) to cut its CO2 emissions per employee by 20 percent by 2012, the chairman of the bank, Francisco Gonzalez, said on Tuesday.
BBVA will introduce measures to persuade staff to cut trips by using video-conferencing, introduce energy-saving in their homes and use vehicles which burn less fossil fuel.
The plan could save the bank 1.5 million euros a year, the chairman of Spain’s second largest bank said at a presentation in Madrid.
Climate change is driving increase in tiger attacks
The number of tiger attacks on people is growing in India’s Sundarban islands as habitat loss and dwindling prey caused by climate change drives them to prowl into villages for food, conservation experts said.
Wildlife experts say endangered tigers in the world’s largest reserve are turning on humans because rising sea levels and coastal erosion are steadily shrinking the tigers’ natural habitat.
Economic woes may give planet a breather
NICOSIA (Reuters) - A slowdown in the world economy may give the planet a breather from the excessively high carbon dioxide (CO2) emissions responsible for climate change, a Nobel Prize winning scientist said on Tuesday.
Atmospheric scientist Paul J Crutzen, who has in the past floated the possibility of blitzing the stratosphere with sulphur particles to cool the earth, said clouds gathering over the world economy could ease the earth’s environmental burden.
Climate change factors into conservationist buys
Climate change is prompting some conservation groups to broaden strategy in buying pristine lands, recognizing that some may be under water in 50 years or undergo other drastic changes.
For the first time, land trusts and other conservationists are factoring in evidence that global warming is altering the migration of species, reconfiguring coastlines and transforming natural habitats.
ANALYSIS - Asia oil brokers brace for crisis-induced shakeup
SINGAPORE (Reuters) - Asia’s oil broking industry is on the brink of its biggest shake-up in a decade as a plunge in trading volumes forces many to scramble for new markets, rethink alliances or consider shutting up shop.
…The worst financial crisis in 80 years nearly froze credit markets for much of the past month, making it difficult to finance both derivatives and physical oil trade.
More important, the collapse of Lehman Brothers and rattled confidence in Wall Street giants like Morgan Stanley and Goldman Sachs forced many companies to pull back from any form of trading at all, preferring to wait until calm returns to tumultuous markets before venturing out again.
OTC trading activity has halved or more in the past three months, according to a straw poll of brokers, all of whom declined to be identified because the data is confidential.
Visible trading, or deals that take place in the half-hour window used to set benchmark prices, of OTC fuel oil and middle distillates derivatives fell by 44 percent in September against a year ago, energy pricing agency Platts said.
‘The best thing to do now is to square off all positions, sit around and ride out the storm,’ said a trader, who has not been in the market for the past three weeks.
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$3 a gallon gas gets lost in crush of bad news
Gut-wrenching declines in the stock market, a financial panic that some have compared to the Great Depression and the realization that the U.S. may be headed to its worst recession in over a generation have trumped what should otherwise be good news: The return of $3-a-gallon gas.
Better yet, with 401(k) statements arriving in the mail and families worried about keeping their homes, has anyone even noticed?
As oil prices fall, push for alternatives may ease
Just four months ago, a conference here on electric cars drew four times as many people as expected. District fire marshals ordered some of the crowd to leave, and the atmosphere was more like that of a rock concert than an energy conference. A brief film depicted an electric car owner driving off with a beautiful woman to the strains of “The Power of Love” while her original companion struggles to pay for gasoline. The audience cheered.
One discordant note in the series of enthusiastic speeches came from Bill Reinert, one of the Toyota Prius designers. He cautioned that designing and ramping up production of a new car takes five years.
“If oil goes down to $60 or $70 a barrel and gasoline gets back to $2.50 a gallon, and that very possibly could happen,” he said, “will that demand stay the same or will we shift back up?”
Was ‘Peak Oil’ a Multi-Billion Dollar Hoax?
Crude oil prices started their astonishing price rise in January of 2007 right on cue for a normal seasonal rise into the summer. By August, prices were accelerating and continued higher going into the end of 2007. The usual seasonal year-end decline was hardly noticeable.
As 2008 began, crude prices seemed to be a one-direction trade as prices accelerated even faster. Something unusual was taking place in this market. OPEC and the Saudis claimed there was plenty of supply on the market but prices were being bid up regardless. Many analysts revived earlier predictions about peak oil and the impending decline in production as the justification for higher prices in anticipation of supply shortages in the future. Then in the middle of the summer the selling began. Was peak oil just a multi-billion dollar hoax?
US, Russia, NATO and the Future of Afghanistan: Taliban Resurgence and the Geopolitics of Oil
At a time when the fabulous Kashagan oil fields in Kazakhstan are expected to come on stream in 2013, when Washington hopes to reverse the tide of Russia-Turkmenistan energy cooperation, when volatility in the southern Caucasus impedes the advancement of new trans-Caspian pipelines, then, Afghanistan bounces back as the most realistic and viable evacuation route for Caspian energy bypassing Russia and Iran - provided the ground situation could be stabilized and security provided which investors and oil companies would find reassuring.
Nigeria: Government Opts for Massive Importation of Fuel
With the imminent zero production of petroleum products in the country following the state of all the refineries, the Federal Government has decided to embark on massive importation of fuel to prevent scarcity and queues at the filling stations.
Stakeholders in the downstream sector of oil industry had expressed fears that the inactive state of the four refineries, following pipeline breaks and epileptic power supply, could pave the way for severe scarcity of products.
LA public transit faces dilemma due to AIG demise
LOS ANGELES — Two public transportation agencies in Southern California are facing a financial dilemma and possible service cuts after a major lender fell victim to the nationwide economic crisis.
Los Angeles County Metropolitan Transportation Agency officials said their deal to lease trains and buses from investors is in jeopardy because American International Group Inc. - which loaned the agency $1 billion to finance the transactions - recently ran short of cash and nearly collapsed.
Eni Plans to Build Floating LNG Plant in Indonesia
(Bloomberg) — Eni SpA, Italy’s biggest energy company, may build a floating liquefied natural gas plant in Indonesia, the Southeast Asian nation’s Energy Minister Purnomo Yusgiantoro said.
Eni plans to develop the Bukat area bordering Malaysia to supply the LNG plant, Purnomo told reporters without giving details of costs or financing. It has “big” oil and gas reserves, he said.
Holiday travelers see fewer flights
Airlines will offer almost 3,000 fewer domestic flights a day during the Thanksgiving season, promising fewer choices, fuller planes and higher fares for millions of Americans.
Compared with last Thanksgiving season, there will be 11% fewer flights — 2.6 million fewer seats — on non-stop domestic routes from Nov. 20, the Thursday before Thanksgiving, through Nov. 30, the Sunday afterward.
Taiwan’s bicycle makers riding high on global crisis
TAIPEI (AFP) – For the past six months Wayne Hsu has been cycling 45 minutes to his office every day, which he says gets him off to an energetic start and, more importantly, slashes his monthly petrol bill.
Hsu, an airline sales representative in Taiwan’s northern Taoyuan county, is among a growing number of people here opting for bikes over cars amid rising inflation and a slowing economy.
Exelon offers to buy NRG for 6.2 billion dollars
WASHINGTON, (AFP) – US energy company Exelon has offered to buy its competitor, NRG Energy, for 6.2 billion dollars in a deal which would create a national energy giant worth about 60 billion dollars.
Francophonie to cut CO2 emissions in half by 2050
QUEBEC CITY (AFP) – Seventy French-speaking nations and regional governments pledged to help cut global greenhouse gas emissions in half by 2050, at the close of the 12th Francophonie summit on Sunday.
The group reaffirmed its backing of the United Nations Framework Convention on Climate Change and the Kyoto Protocol.
Climate change is ‘faster and more extreme’ than feared
Climate change is happening much faster than the world’s best scientists predicted and will wreak havoc unless action is taken on a global scale, a new report warns.
From Subprime to Meltdown: Is Peak Oil Responsible?
In a recent article, Joseph Stiglitz, Nobel Prize laureate in Economics, argued that the current financial crisis was caused both by “dishonesty on the part of financial institutions, and incompetence on the part of policymakers”. Others, like the Australian Prime Minister, add that widespread greed is to blame for the current events.
While these explanations manage to explain the evident excesses of our financial system, they do not say how the system, which used to run fairly well, suddenly stopped working. Everyone would agree that the financial crisis started once the banking sector got into troubles. The banking sector, for its part, finds the causes of its difficulties in the subprime crisis. To go back further in the events timeline, we acknowledge that the subprime crisis happened once borrowers became unable to pay back their mortgages.
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OPEC could cut 3mn barrels a day, says Iran
Iran said on Sunday that OPEC will consider an output cut of one to three million barrels per day (bpd) of oil in its upcoming meeting, the Mehr news agency reported.
“It seems that a (oil) production cut from one to three million bpd will be examined in the October 24 meeting,” Iran’s ambassador to the oil cartel, Mohammad Ali Khatibi, was quoted as saying.
“Iran is seeking a production cut to create stability in the market,” he said.
OPEC Pres: Oil Can’t Fall Under $70 For Some Projects-Report
LONDON (Dow Jones)-Some hydrocarbon projects won’t be sustainable if the price of oil remain below $70 a barrel, although the Organization of Petroleum Exporting Countries doesn’t have a price goal, the oil producer group’s president said in remarks reported late Saturday.
The statements come as OPEC moved forward the date of its extraordinary meeting to Oct. 24, where OPEC president Chakib Khelil has previously said a “significant” cut would be decided.
In remarks reported on the Web site of Algerian state newspaper Al-Moudjahid, Khelil said crude from Canada’s oil sands and offshore Brazil “can’t be produced if the price falls below $70 a barrel.”
Crude plunge rings alarm bells in Iran
TEHRAN: Iran should ban imports of luxury and non-essential goods given falls in crude oil prices, central bank chief Mahmoud Bahmani was quoted yesterday as saying, in a sign the Opec producer is concerned about sliding oil income.
Officials say Iran’s international isolation means it is more immune than others to the world financial crisis but the governor’s remarks reflect growing concern about one consequence of the turmoil – tumbling oil prices.
Chavez Says Oil Between $80 and $90 Is `Sufficient’
(Bloomberg) — Venezuela, the biggest oil exporter in the Americas, will remain solvent as long as oil prices hold between $80 and $90 a barrel, President Hugo Chavez said.
The surge in oil prices in the first half of this year was “irrational,” Chavez said today in comments broadcast by state television. Since touching a record $147.27 a barrel in July, oil prices have plunged more than 50 percent.
“If the price of oil stabilizes between $80 and $90, that’s more than sufficient,” he said.
Kuwait faces cuts in budget spending
Kuwait’s finance minister warned in remarks published on Saturday that a recent decline in oil prices might force the country to cut spending and revise downward its 2009-2014 five-year plan.
Kuwait would have to cut spending in its next budget if the price of its crude fell below $60 per barrel, Mustapha Al Shamali told Al Rai newspaper.
Alberta a ‘prime location’ for terrorists: experts
CALGARY - Oil-and-gas rich Alberta has become a “prime location” for terrorists looking to capitalize on shaky economic times in Canada and the United States, terrorism experts said at a national conference for emergency officials in Calgary on Saturday.
“While Alberta might not be a first choice for mass-casualty attack terrorism - you’re unlikely to see a major bomb going off in downtown Edmonton - it certainly is a prime location for economic terrorism, because of the ability to disrupt the oil and gas industry,” Mercedes Stephenson, a Calgary-based defence and security analyst, told reporters.
Credit crunch puts Petrobras plan on hold
Brazilian giant Petrobras has postponed the disclosure of its new business plan until the end of the year so that it can evaluate the impact of the global financial crisis.
The business plan for 2009-2012 was scheduled to be disclosed this month, with details on investments for the exploration of pre-salt oil reserves, Reuters reported.
Egypt expects oil price to fall to $60 a barrel
CAIRO (Reuters) - Egyptian Oil Minister Sameh Fahmy said on Saturday he expected oil prices to fall to $60 dollars a barrel in the medium term because of the international financial crisis.
…The Egyptian government will not now reduce the subsidies it pays on fuel sold inside Egypt, he added. Egypt is a medium-sized producer of oil and gas and a net export of energy.
Kuwait has no plans for strategic oil reserves abroad - official
(KUNA) — Kuwait has no plans to set up strategic oil reserves in China, Vietnam or elsewhere in Asia, said Abdullatif Al-Houti, Managing Director of International Marketing at state-run Kuwait Petroleum Corporation (KPC).
“We have no plan to discuss anything about crude oil stockpiles abroad, especially when oil prices go down,” Al-Houti said in an interview with Kuwait News Agency (KUNA) in Tokyo, denying speculation that KPC is considering the establishment of crude oil bases in Asia in anticipation of international conflicts.
…”The lower the crude price is, the more it will be unattractive to store petroleum abroad,” explained Al-Houti, citing a recent downward trend in international prices.
Chinese oil workers kidnapped in Sudan
KHARTOUM, Sudan (AP) — A Chinese diplomat in Khartoum says nine Chinese oil workers have been kidnapped by unknown assailants in the southern Kordofan province.
The diplomat says the men were kidnapped Saturday and their vehicle was also taken. The kidnapping was discovered because several oil workers escaped and told authorities about it.
Next president faces another crisis — in nation’s infrastructure
WASHINGTON - As if the next president won’t have enough on his plate - with the implosion of the financial markets, two foreign wars, persistent security threats and a host of other concerns - America’s infrastructure is collapsing.
Whether major highways or inland waterways or the electrical grid or a quarter of all bridges, the nation’s physical plant needs billions of dollars in repairs.
Sparse plug-ins for electric cars spark creativity
(AP:SEATTLE) Owning an electric vehicle requires more than global-cooling ambitions. It takes guile, planning, sharp vision, a silver tongue _ and a 50-foot extension cord.
Steve Bernheim knows accessible outlets like a firefighter knows hydrants. He has to _ his Corbin Sparrow runs only 25 miles on a charge.
Wal-Mart to cut plastic bag waste
NEW YORK (AP) — Wal-Mart Stores Inc. plans to slash its global plastic shopping bag waste by 33 percent over the next five years, eliminating more than 135 million pounds of trash. If the plan succeeds, the world’s largest retailer would cut the equivalent of 9 billion plastic bags from stores each year.
The problem is that, despite the current boom in green power, renewable sources such as the sun and the wind still provide just a tiny fraction of the U. S. electricity supply. The rest is mainly dirty stuff: coal, gas, oil. To replace one with the other over the course of a decade, energy experts say, would make the Manhattan Project look like a science-fair volcano.
And even if we wanted to try Gore’s plan, his goal is likely to get more distant every year. That’s because, even as Americans demand more action on climate change, their laptops and flat-screen TVs are demanding more electricity every year — and they’re not asking whether it’s clean or dirty.
“This goal is so far outside the realm of possibility,” said Richard Newell, a professor of environmental economics at Duke University. “It would be practically infeasible, politically impossible and economically and environmentally unwise.”
Green energy is not a middle-class conceit, more the only way forward
So that’s it, then, choruses the commentariat. Collapsing confidence, crashing stock markets and credit-starved banks spell doom not just for the economy, but for environmental concerns. Saving the planet may be all very well in the good times, but is an unaffordable luxury when things turn bad.
The argument is pervasive, persuasive and gaining ground. Even some environmentalists half-accept it, believing they should mute their message. But it is plain wrong. Never have green concerns and measures been more important.
Michael T. Klare: The Crisis and the Environment
Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn — of what degree and duration, no one can say — profoundly affecting all aspects of U.S. and international society. Of the many areas that will be impacted by the downturn, the environment stands out in particular. It’s closely tied to the tempo of resource consumption, and significant efforts to ameliorate environmental decline will prove very expensive and out of reach for already-stretched budgets. The question thus arises: Will the crisis be good or bad for the environment, especially with respect to global warming?
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How Do Experts Estimate The Size Of Oil And Gas Fields?
Turkmenistan is in the news this week after confirming that its South Yolotan-Osman natural-gas field is among the five biggest in the world. That assertion is based on a survey done by an independent British firm.
Such estimates are of vital importance to energy-rich countries, as they cannot plan their national strategies without some idea of what resources they have. So how do surveyors determine how much wealth lies under their feet? And just how accurate are these estimations anyway?
Petrochemical capacity to rise in Saudi Arabia
(MENAFN - Khaleej Times) The Saudi petrochemical sector will witness a massive increase in capacity in the second half of 2008, securing the country’s position as a global petrochemicals supplier, according to Business Monitor International’s (BMI) latest Saudi Arabia Petrochemicals Report.
‘Kenya can’t enforce energy price control’
Nairobi, Kenya - Kenyan consumers will continue to pay higher electricity charges, following the introduction of an inflation-related cost in the monthly electricity bills while the local pump prices of fuel are not expected to change soon.
Kenya’s Energy Regulatory Commission (ERC), tasked with regulating the local energy market, said on Friday it lacked the requisite legislation to enforce price control, despite a government warning this week that it intended to enforce a fuel price cut.
Nuclear cooperation with Pak ‘not on table’: US
Describing the Indo-US civilian nuclear agreement as “unique” which cannot be replicated elsewhere as a model, the Bush administration has made it clear that Pakistan cannot be the beneficiary of a similar deal and no such cooperation with Islamabad is on the table.
China to install two more nuclear power reactors in Pakistan
Islamabad - Pakistan’s foreign minister said on Saturday that China will help the country to build two more nuclear power reactors to overcome its energy crisis. An agreement was signed during President Asif Ali Zardari’s recent visit to China, Shah Memhood Qureshi told a news conference in Islamabad.
Minister directs PEPCO to avoid unscheduled loadshedding
Islamabad — Federal Minister for Water and Power, Raja Pervez Ashraf has directed the PEPCO to devise a strategy to handle the prevailing energy crisis and asked to reduce load shedding duration. He further directed that there should be no unscheduled load shedding and warned the CEOs of DISCOs to place their system in order so that the existing state of affairs could be arrested prudently.
Report: Federal Agencies of Two Minds on Freedom of Speech
Federal agencies have inconsistent media policies when it comes to allowing scientists to share information with journalists, concludes a new study by the Union of Concerned Scientists.
The nonpartisan, nonprofit group issued a “report card” grading 15 federal agencies on their communication policies. Some agencies, it found, “stifle communication” even if their policies encourage free speech. Other agencies simply have weak policies regarding communication with the media.
Credit crunch forces Canada oils to make cuts
CALGARY, Alberta (Reuters) - EnCana Corp was first off the mark, warning earlier this week it plans to husband its cash next year, signaling the end of a spending boom among Canada’s energy companies as the credit crunch forces them to live within its means.
The economic turmoil has pushed oil prices to less than half their July peak, lowered access to capital and cut the share prices of Canadian oil and gas producers across the board.
As a consequence, most of the sector is likely to hunker down during the current lean patch. Most Canadian oil companies will detail their 2009 spending plans later this year. Expect them to restrain drilling, slow expensive projects and to spend only cash raised from operations. That would help them avoid the need to search for expensive and increasingly scarce debt funding.
Media-driven fear makes stocks cheap
What about the “age of China” leading to the complete depletion of oil, copper, natural gas and nickel? Weren’t we supposed to run out of food right about now? Wasn’t potash supposed to become more expensive than gold? How about the “peak oil” stories? Where are all the “oil is going to $200″ screamers now?
Because of all these “experts,” millions of naive Americans invested in stocks at the top of the supercycle, only to see 70% of their wealth evaporate. Many also invested in China, agriculture and other fads.
Where did all of those oil speculators go?
These wild fluctuations in price correspond with the theory of “peak oil” espoused by Ken Deffeyes of Princeton. The professor emeritus of geology theorized that the world would be hitting its peak in oil production a few years ago. It’s not that we’re running out of oil. We’re just running out of cheap oil. So when demand accelerates, prices rise. When events such as the current recession depress demand, prices fall.
Petrobras September Oil Production Rises to Record, Gas Climbs
(Bloomberg) — Petroleo Brasileiro SA, Brazil’s state-controlled oil company, said its monthly oil production rose to a record 1.89 million barrels a day in September.
Petrobras, as the company is known, said late yesterday in an e-mailed statement that total daily domestic output in September increased 7.26 percent from a year earlier and 1 percent from August. Natural gas output rose 24 percent compared with a year-ago and was unchanged from August.
Biofuel Makers Push to Boost the Amount of Ethanol Allowed in Gasoline to 20 Percent
As presidential candidates Barack Obama and John McCain continue to push their plans to boost alternative energy, there is a growing but controversial effort by some biofuel advocates to increase the amount of ethanol that can be blended into a gallon of gasoline.
Research team probes wind turbines effect on bat population
SUMMIT — One of the world’s largest wind power owner-operators is making history here on one of the numerous ridges that comprise the Allegheny Mountains.
Some 65 miles southeast of Pittsburgh, in Somerset County, Iberdrola Renewables Inc. agreed to let an independent scientific team study the impact of turbines on the local bat population when the company’s 10-month-old wind farm in Summit Township is temporarily shut down.
US replaced more than twice 2007 gas used
The US replaced more oil reserves than the country used in 2007 and added more than twice the amount of gas used that year, the US Energy Information Administration said Oct. 17.
The oil additions were the first in 4 years, and the gas additions set a record, the agency said.
Operators added 2 billion bbl of proved oil reserves in 2007, a year in which the country produced 1.7 billion bbl. They added 46.1 tcf of proved dry gas reserves while producing 19.5 tcf.
NEW YORK (CNNMoney.com) — Gasoline prices continued to slip, tumbling below $3 a gallon for the first time in nearly nine months, according to a daily survey of credit card swipes released Saturday.
The average price of unleaded regular fell to $2.99 a gallon, down four and nine-tenths of a cent, according to the Daily Fuel Gauge Report issued by motorist group AAA. Prices have fallen 30 cents in the last week and 84.4 cents, or 22%, in the last 30 days.
Sour gas anger may be root of Canada pipe attacks
VANCOUVER, British Columbia (Reuters) - The saboteur who attacked two pipelines in northeastern British Columbia in the past week is likely somebody who has been hurt by sour gas development, according to an author who has studied past attacks on Canada’s energy infrastructure.
China sees more than 50% decline in coal exports in September
BEIJING (Xinhua) — China’s coal exports have kept declining since the beginning of the second half of this year, partly as a result of limits in export quotas.
35 Yrs On, Calls For Lower Oil Imports Echo
NEW YORK (Dow Jones)–Slashing oil imports from the Middle East is echoing as a catch phrase in the final weeks of the U.S. presidential election, even as volumes are on the rise. What’s unsaid is that reducing such dependence won’t bring lower prices.
In the first eight months of the year, crude oil imports from Persian Gulf members of the Organization of Petroleum Exporting Countries accounted for 24.5% of U.S. crude imports, compared with 20.8% in the year-ago period and the most since 2003, when the U.S. launched the war on Iraq, in which oil has emerged as a central theme. In a twist that shows the complexity of the issue, the increases come largely from Iraq and Saudi Arabia.
Buy you ask? Yes. Not stocks, unless you’re talking about oil. And unless you’re the best of the best of traders you’ll probably want to buy the oil trusts, but only if you believe in the peak oil story. Today? Not likely….at least wait until the next market crash, which appears to be coming any day now. And I highly doubt you’re anywhere as good of a trader as you think.
RBS says no credit pulled from Venezuela’s PDVSA
LONDON (Reuters) - Royal Bank of Scotland said on Saturday it has not pulled any lines of credit from Venezuela’s state oil company PDVSA, denying a report it had withdrawn a $5 billion facility.
U.S. business news channel CNBC reported late on Friday that RBS had eliminated a credit line to PDVSA, following similar reports in two small Venezuelan anti-government newspapers.
OPEC eyeing ’sharp’ production cut
OPEC oil producers are leaning towards cutting production by 1-1.5 million barrels per day (bpd) at their Oct. 24 meeting, UAE state news agency WAM said on Friday, citing an OPEC source.
“An OPEC source expressed the belief that… a strong tendency among ministers at their meeting next Friday will be to carry out a sharp production cut of between one million and 1.5 million barrels per day from Nov. 1,” WAM said in a report from Vienna, where OPEC’s headquarters are located.
OPEC sees $70-$90 as floor for oil prices - paper
ALGIERS (Reuters) - OPEC oil producers see oil prices bottoming at $70-$90 per barrel, OPEC President Chakib Khelil was quoted as saying in Saturday’s edition of Algerian daily El Watan.
County will feel $25M MTA cuts
The Maryland Transportation Authority has proposed cutting some commuter bus lines and MARC train service, including a bus that runs from Annapolis to New Carrollton Metrorail Station.
…The moves will save the state about $25 million, as gasoline taxes, vehicle registration fees and other revenue sources continue to come in below expectations, said Jawauna Greene, an MTA spokesman.
GM sends Hummer sales book to potential buyers
DETROIT (Reuters) – General Motors Corp (GM.N) has sent a sales prospectus for Hummer to potential bidders as it scrambles to shore up its cash amid a sharp downturn in global auto sales.
The step to put Hummer up on the block and provide financial data to buyers comes four months after Chief Executive Rick Wagoner said GM would look to sell the military-derived SUV brand that had become an emblem of gas-guzzling excess for many consumers.
State, feds investigate rupture of gas line
ALASKA - The state has asked federal regulators to help investigate the rupture of a natural gas pipeline late last month in the Prudhoe Bay oil field.
The rupture was violent, causing the steel pipe to break apart and sending a piece flying across the tundra. No one was hurt in the Sept. 29 incident.
Alaska: Weather thwarts fuel run
Early freeze-up on the Kuskokwim River has left the village of Kwethluk without diesel fuel needed for the winter after two runs by fuel barges failed this week to get through thickening river slush to the community.
An emergency declaration was adopted Thursday in Kwethluk at a joint meeting of the city council, tribal council and village corporation. Kwethluk is seeking state and federal financial help, warning that its 800 residents face loss of electricity and exposure to extreme cold in another month.
Amid green energy euphoria, some solar concerns
SAN DIEGO (Reuters) - Matt Cheney said he felt like the boy who cries “The emperor has no clothes,” during this week’s Solar Power International conference in San Diego.
Talk from industry executives featured a rosy future for solar power, despite worldwide recession fears.
“Hey, didn’t anybody around here notice the dive the markets took last week?” said Cheney, the CEO of MMA Renewable Ventures, which builds solar power plants.
First world must help poor nations on climate change
MANILA (AFP) – Developed countries are obligated to help poorer nations cope with disasters that may be exacerbated by climate change, a UN-sponsored gathering of legislators in the Philippines said Saturday.
MBA’s face up to the cold, hard facts about global warming
Climate change students are shocked and depressed by what they learn, but business can also influence the outcome.
Bewildered by peak oil economics
A stunning aspect of the current economic crisis is that most economists didn’t see it coming and remain bewildered by its causes. Treasury Secretary Paulson said just over a year ago that the business environment was the best of his career.
Paul Greenstein wrote recently that the crisis struck with little forewarning, as if unleashed by a “secret signal” sent out in 2007 that slammed the economy with soaring energy and food costs, and the free-fall of housing prices.
The current economic crisis was indeed unanticipated by most economists, but the trigger may be hiding in plain sight - peak oil. Oil engineer M. King Hubbert predicted in 1956 that U. S. oil production would peak in 1970 and then decline.
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Oil jumps on expectation recession fears overblown
SINGAPORE – Oil prices jumped above $72 a barrel Friday in Asia from a 14-month low as investors bet fears that a severe global recession will devastate crude demand may be overblown.
Oil has fallen by about half since reaching a record $147.27 on July 11.
“I think the market has been way oversold,” said Gavin Wendt, head of mining and resources research at consultancy Fat Prophets in Sydney. “The sentiment has been dominated by fear and panic, and when people are scared, they just keep selling.”
Light, sweet crude for November delivery was up $2.80 to $72.65 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract dropped overnight $4.69 to settle at $69.85, the lowest settlement price since Aug. 23, 2007.
Oil Cos Ability To Tap New Sources May Have Peaked-BP
LONDON -(Dow Jones)- Oil companies’ ability to tap hydrocarbon resources may have peaked because new reserves are found in more challenging environments and the industry is losing skills and know-how as a generation of experienced workers approaches retirement, said BP PLC’s (BP) head of exploration and production Andy Inglis.
In a speech delivered at Rice University in Texas on Wednesday and posted on BP’s Web site Friday, Inglis said: “I think it’s true to say that we may have reached a period of peak capability, at least in the short term.”
He said this peaking in the capability of companies to extract oil bears a far closer relation to the facts than peak oil, the theory that the amount of oil the earth is capable of yielding has peaked.
Why low oil would not last long
Oil prices, which neared the $150 mark just few weeks ago, fell back below $70, mainly due to fears of slower global growth as the financial crisis deepens. Robert Ebel, a senior advisor to the US government on oil and energy issues, is holding firm to his prediction that oil could go back to $90 by the next few weeks.
He believes that $90 a barrel is a ‘fair and acceptable’ oil price for consumers. “Is $90 per barrel acceptable to the American people? Of course it is compared to the $147 dollars in July. That is very acceptable,” he argues.
OPEC Embarks on a Fool’s Mission
When oil was consolidating near $100 I thought that was it. It was plain to see that the global economy was slowing, and it was clear that fundamentals were not in favor of another move higher.
I should have known better, because that is not how trends end. Trends end when every disbeliever (or nearly every disbeliever because my tune never changed) gets religion and hops on the bandwagon in spite of rapidly changing fundamentals. The same thing happened in housing in 2005, and in the blowoff top in 2000 in the Nasdaq, and more recently in various currencies like the Australian dollar and the British Pound.
Indeed, we saw analysts who disliked oil at $50 calling for it to rise to $200 or even $300. People who never heard the term “Peak Oil” before, and probably still do not understand what it means, suddenly found a new religion.
How Does the Financial Crisis Affect the Peak Oil Thesis?
Michael Shedlock has a great post on the recent slide on oil prices. Shedlock has been predicting a deflationary scenario as a consequence of the credit bust even when commodities reached all-time record highs earlier in the year. Due to oil’s rapid descent past his $70 target, Shedlock is now predicting possible $50 - $60 oil.
What’s interesting about Shedlock’s call is that he fully acknowledges the possible reality of peak oil but does not think peak oil, alone, is enough to drive prices into the stratosphere irregardless of economic fundamentals. He also asserts that peak oil has already been priced in.
It’s time to improve oil price debate
The price of petrol paid by Kenyan motorists, like their fellow travellers elsewhere, has remained incredibly high in the past few months. But, who is to blame for these incredibly high levels of fuel at the pump?
Candidates off on oil by $350 billion … or so
WASHINGTON - It’s an attention-grabbing claim: Americans each year are sending $700 billion to unfriendly countries for oil, as much as the entire cost of the Wall Street bailout plan. In rare agreement, both presidential candidates use the number. But is it real?
“We have to stop sending $700 billion a year to countries that don’t like us very much,” Republican John McCain said again Wednesday night during the candidates’ final debate.
Democrat Barack Obama joined the refrain recently, declaring at a Wisconsin rally that a push for alternative energy “will stop us from sending $700 billion a year to tyrants and dictators for their oil.”
The claim, however, wildly exaggerates the amount of money going to unfriendly nations. It also significantly inflates spending in general on petroleum imports, especially considering recent dramatic declines in oil prices.
Government doubling heating oil assistance
WASHINGTON - The Bush administration on Thursday released $5.1 billion in fuel assistance to states, nearly doubling federal money to help poor people cope with high home heating bills expected this winter.
Despite oil price drops in recent months, lawmakers from cold weather states said high energy prices and the slumping economy are leaving many families struggling to pay to keep warm.
ICI Offers Alternative to Pickens Plan
Intelligent Communities President Barry Krusch says, “Not only does the Pickens Plan fail to provide a solid solution to curtail greenhouse gas emissions, but it also lacks the detailed analysis that any comprehensive plan should include. Briefly put, it is too much Pickens, and not enough Plan”.
Palin says God blessed America with oil and gas
ELON, N.C. – Republican vice presidential candidate Sarah Palin said Thursday that God blessed the nation with oil and gas resources and other forms of energy that should be tapped to reduce U.S. dependence on foreign suppliers.
The Alaska governor told supporters at Elon University that she and GOP presidential nominee John McCain will develop new energy sources.
“God has so richly blessed this land, not just with the oil and the gas, but with wind and the hydro, the geothermal and the biomass,” Palin said. “We’ll tap into those.”
West Africa has potential to develop biomass: report
ROME (AFP) – Bioenergy could become an “engine of growth” for several west African countries hard hit by the world food crisis and rising oil prices, the United Nations Foundation said Thursday.
Converting biomass to bioenergy should be encouraged under certain conditions in the West African Economic and Monetary Union, the UNF said in a report commissioned by the group, whose French acronym is UEMOA.
Transforming England’s towns into green and pleasant land
(CNN) — To begin with, visitors to Todmorden, Yorkshire, might think it looks like any other small town in northern England.
But look closer and you will notice some unusual features that have placed the town at the forefront of a new food revolution.
There are herbs growing in flower boxes at the bus stop, raspberry canes on waste land, cabbages in the flower beds at the local park - and even beans between the graves in the local cemetery.
In fact, wherever you look food is growing, free for anyone to pick and take home to cook.
Gulf state rescues £3bn wind farm in the Thames Estuary
The Government of Abu Dhabi has stepped in to help to fund the world’s biggest offshore wind farm in the Thames Estuary after the withdrawal of Royal Dutch Shell from the project.
Masdar, a $15 billion (£9 billion) clean-energy investment fund controlled by the Gulf state, said yesterday that it would buy a 20 per cent stake in the London Array project from E.ON, the German energy giant.
Falling oil prices and higher tax take add to BP’s woes
BP served up more bad news for investors yesterday in a third-quarter trading statement that showed production was down, refining margins had slumped and the company had paid more tax.
Profits for the quarter, when the figures are released, would show a $2bn (£1.1bn) gain from asset sales, but the future looked tough as the global price of Brent crude fell yesterday to $57.78, the lowest for nine months.
Goldman Advises Investors to Switch to Shell From BP
(Bloomberg) — Investors should switch to Royal Dutch Shell Plc from BP Plc as Europe’s largest oil company has underperformed its rival the past month and will offer better cash-flow growth from 2010-13, Goldman Sachs Group Inc. said.
Energy: Time ripe for introducing fuel oil tax - Analysts
With the global crude oil price continuing to drop, some analysts said the time is ripe for China to introduce the long-discussed fuel oil tax.
“I believe it is right to introduce the tax while the international oil price is below $80 per barrel,” said Zhang Peisen, a senior researcher with the Taxation Research Institute under the State Administration of Taxation.
Britain to cut carbon emissions by 80 percent: minister
LONDON (AFP) – Britain will introduce a legally-binding pledge to cut carbon emissions by 80 percent by 2050, the minister for the newly-created Department for Energy and Climate Change said Thursday.
The promise, which involves amending soon-to-be approved legislation that requires Britain to cut carbon emissions by 60 percent on 1990 levels by 2050, came after a recommendation to do so from a government-appointed committee.
Australian leader holds firm on climate change
CANBERRA, Australia – World leaders must deal with the threat of global climate change despite the spreading “cancer” of the global financial crisis, Prime Minister Kevin Rudd said Friday.
Rudd backed the majority view that the 27-nation European Union reached in Brussels on Thursday that deep cuts must be made in greenhouse gas emissions despite slowing world economies.
Time to banish the god of growth
IMAGINE an industry that runs out of raw materials. Companies go bust, workers are laid off, families suffer and associated organisations are thrown into turmoil. Eventually governments are forced to take drastic action. Welcome to global banking, brought to its knees by the interruption of its lifeblood - the flow of cash.
In this case we seem to have been fortunate. In the nick of time, governments released reserves that should with luck get cash circulating again. But what if they hadn’t been there? There are no reserves of fish, tropical hardwoods, fresh water or metals such as indium, so what are we going to do when supplies of these vital materials dry up? We live on a planet with finite resources - that’s no surprise to anyone - so why do we have an economic system in which all that matters is growth (see “Why our economy is killing the planet and what we can do about it”)? More growth means using more resources.
When the human population was counted in millions and resources were sparse, people could simply move to pastures new. But with 9 billion people expected around 2050, moving on is not an option. As politicians reconstruct the global economy, they should take heed. If we are to leave any kind of planet to our children we need an economic system that lets us live within our means.
(Many of the stories in this special report are behind a paywall, but a few are free.)
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Oil falls to 14-month low on bad US economic data
VIENNA, Austria - Oil prices fell to a 14-month low Thursday as bad U.S. economic news stoked fears that a significant global economic slowdown will undermine demand for crude.
Concerns over the economy overrode growing expectations that the Organization of Petroleum Exporting Countries could opt to cut back production in an effort to shore up prices.
Light, sweet crude for November delivery was down US$2.44 to US$72.10 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract fell overnight US$4.09 to settle at US$74.54, the lowest settlement price since Aug. 31, 2007.
Oil prices are now half of the peak they reached in mid-July.
Drill-baby-drill, meet $75 oil
NEW YORK (CNNMoney.com) — “Drill-baby-drill!”
With the price of oil falling below $75 a barrel Wednesday - down about 49% from last summer’s highs - the industry’s battle cry is sounding less and less convincing.
But falling oil prices are not the only reason why the air is coming out of the drilling balloon. The credit crunch has hampered oil company’s ability to fund big-ticket drilling projects. Meanwhile, the prices that producers pay for raw materials and labor remain high.
“Any project that assumed oil would average $100 over the next 10 to 20 years is being seriously reconsidered at this time,” said Richard Ward, senior cost analyst at IHS Cambridge Energy Research Associates (CERA).
As recently as July, tapping deep water sources and extracting crude from Canadian oil sands - two very expensive production methods - were seen as economically viable ways to deal with the energy crisis. At that time, the price of oil was above $140 a barrel.
Now that the price has fallen below $75 a barrel, and could go even lower, many experts say the future of these projects is uncertain.
Positive Outlook Amid Plunging Prices: Industry Forges A Productive Future
Despite the U.S. commodity market’s financial slump, with both prices and spirits sunk to all-time lows, the petroleum industry is forging ahead to build on its production and operational position to fulfill worldwide energy needs.
In fact, the energy industry has helped to buoy the economy throughout recent market meltdowns and has provided its own saving grace in the midst of a sluggish national job sector. According to Reuters, Houston, home to one of the fastest growth rates
Russian Stocks Tumble With World Markets as Crude Oil Retreats
(Bloomberg) — Russian stocks fell to the lowest in three years, led by OAO Rosneft and OAO Lukoil, as sinking oil prices hurt the outlook for Russia’s economy.
U.S. Consumer Prices Probably Tempered By Cheaper Fuel Costs
(Bloomberg) — Plummeting fuel costs probably restrained prices paid by U.S. consumers in September, signaling a slowing economy diminished the threat of inflation, economists said before a report today.
The cost of living increased 0.1 percent after a 0.1 percent drop in August, according to the median forecast of 75 economists in a Bloomberg News survey. Other reports today are projected to show manufacturing contracted for a second month, and job losses remained elevated.
In global crisis, oil insulates Gulf
Economists say that Arab states such as Saudi Arabia will feel the pinch, but a year of record oil prices provides a deep cushion.
Falling oil prices make Iraq revisit budget
BAGHDAD - A steep drop in the price of oil may force Iraq to scale back its $79 billion budget for 2009, the Finance Ministry said Wednesday.
Also, a U.S. projection for a cumulative $79 billion budget surplus this year based largely on oil revenues is now unlikely. The surplus projection by congressional auditors brought angry demands from Americans for Iraq to shoulder more of the financial burden of reconstruction.
Last month, the ministry set next year’s budget at nearly $79 billion based on expectations that the average price per barrel of oil would not drop below $80. But on Wednesday, oil for November delivery was trading around $76 per barrel — far below a record $147 in July. Oil revenues represent more than 90 percent of the national budget.
Russia May Need to Cut 2009 Spending Amid Falling Oil Prices
(Bloomberg) — Russia, the world’s biggest energy exporter, is facing shrinking government revenue as concern that the global economy may slip into recession pushes down oil prices.
The price of Urals blend of crude fell to $68.71 a barrel today, the lowest level this year, after peaking at $142.50 a barrel in July. It has averaged $106.85 a barrel since the beginning of the year, according to Bloomberg data.
Credit crisis redirects companies’ game plans
WHO Encana Corp., Canada’s largest independent oil-and-gas producer
CHANGE Delaying plans to split into two independent companies due to tightness in credit markets
WHO CI Financial Income Fund, Canadian independent mutual fund manager
CHANGE Reverting to a corporation from an income fund to take advantage of acquisition opportunities as they arise
ACP Leaders Want Global Strategy for Oil Prices
African, Caribbean and Pacific (ACP) Leaders have called on the international community to agree on a global strategy to stabilise oil prices at affordable levels in order to protect the growth prospects of the developing countries.
India has no immediate plan to cut fuel prices: Govt
NEW DELHI: India has no immediate plans to cut fuel prices despite crude oil’s fall to a 13-½ month low near $72 a barrel, oil minister Murli Deora told reporters on Thursday.
He said a cut in prices would not be considered unless the price of crude oil imported by Indian refiners fell to $61 per barrel.
Russia opens up new Siberian oil frontier
VERKHNECHONSKOYE OILFIELD, Russia, Oct 16 (Reuters) - It’s very cold, very old and rather salty. And that’s just the oil.
Russian oil major TNK-BP has just brought on stream a pioneering big new oilfield in eastern Siberia, part of a wave of development overcoming huge technical challenges to open up some of this vast country’s most inaccessible crude reserves.
Kuwait Has `Alternative Plan’ If Oil Workers Strike
(Bloomberg) — Kuwait National Petroleum Co., the state-run refiner, has an “alternative plan” to ensure the country’s three oil refineries and exports suffer minimum impact by a workers’ strike planned for Oct. 19.
“We have an alternative plan, or scenario, to ensure the refineries will have the minimum impact,” KNPC Deputy Chairman Asaad al-Saad said today in a phone interview. “The impact will depend on how the strike will happen, if it is total or minimum. There will never be a total shutdown,” he said.
Kuwait’s Oil Refineries Run at 63% of Capacity After Power Cut
(Bloomberg) — Kuwait’s three oil refineries are running at 63 percent of capacity, three days after a power failure halted operations.
“We’re now producing 587,000 barrels” a day, compared with full capacity of 936,000 barrels a day, Kuwait National Petroleum Co. spokesman Mohammed al-Ajmi said today by telephone. “Shuaiba is running at full capacity and Mina Abdullah is almost at full capacity. Mina Al-Ahmadi is a longer process than the other refineries.”
Russia’s antitrust body may take action against five oil giants
MOSCOW (RIA Novosti) - Russia’s antimonopoly watchdog could take new legal action against the country’s five largest crude producers unless they cut oil prices within two weeks, the head of the Federal Antitrust Service (FAS) said on Thursday.
“I will write letters to the five largest oil companies saying that unless they voluntary cut prices for oil products, the FAS will bring new legal action against them, and the threat of administrative fines,” Igor Artemyev said.
Omar strengthens into major hurricane
SAN JUAN (Reuters) - Hurricane Omar swirled away from the small Leeward islands in the northeastern Caribbean on Thursday after strengthening into a major Category 3 storm and threatening to bring torrential rains that could trigger floods and mudslides.
The 15th tropical cyclone of a busy Atlantic hurricane season, Omar formed north of the Dutch island of Curacao on Tuesday, briefly disrupting oil operations in Venezuela and shut down processing units at a refinery in the U.S. Virgin Islands.
Pakistan gets help from China for ailing economy
BEIJING — Pakistan’s president Wednesday won more help from longtime ally China as his country grapples with an ailing economy and chronic electricity shortages, though the prospect of a much anticipated civilian nuclear deal remained uncertain.
Chinese Exports Slowed By Global Economic Woes
Even China isn’t immune to the world’s economic hangover. The country’s export growth in September is 4.2% less than for all of 2007 and 11.2% less for exports to the U.S., specifically, according to China’s customs bureau. In fact, China will see its economic growth slowed by .3% in 2008, compared to a 2.6% jump in growth in 2007.
Economists Jeff Rubin and Benjamin Tal argue that China’s trade slowdown can be attributed to fuel and shipping costs. In their piece titled “Will Soaring Transport Costs Reverse Globalization?” they point out that a standard 40-foot container shipping from Shanghai to the Eastern seaboard of the U.S. cost $3,000 in 2000, when oil was at $20 a barrel. As the price of oil soared earlier this year, the cost to ship that container jumped to $8,000 – and will cost $15,000 should oil ever hit $200 a barrel. Oil prices have since come back down (a little over $80 a barrel at the beginning of the week), but the economic alarm has hurt China in the short-term and portends greater damage in the long-term. “Ultimately,” write the CIBC World Markets economists about past oil shocks, “soaring transport costs were borne by consumers, and markets responded accordingly, substituting goods that could be sourced from closer locations than half-way around the world carrying hugely inflated freight costs.”
Market crisis to hit R&D spending, says EU
R&D investment by the world’s biggest companies rose a torrid 9 per cent last year – but the current financial crisis is likely to hit industrial spending on future research, said the European Union’s top research official.
European Oil Companies Plunge as Crude Price Declines
(Bloomberg) — The Dow Jones Europe Stoxx Oil & Gas Index dropped, led by Europe’s two biggest oil companies, as crude prices sank to the lowest in more than a year on concern the global economy will slide into a recession.
Diesel fuel shortage felt across North America
A diesel fuel shortage across Western Canada has many drivers nervous about the supply and whether it will dry up altogether.
Oil investor Matt Simmons asserted that about half of Obama’s comments make some sense, and only about 10 percent of McCain’s make sense. Rod Erskine of Erskine Energy, by contrast, believes that “McCain has a little better handle on energy than Obama does, but I don’t think either candidate — or the American public — really understands what it takes to drill for, find and develop oil and gas.”
First global crisis of century harrowing
Whether we will go through a major recession, long and deep, or even a depression, what might emerge is the realization that our society is much poorer than we had realized. The housing bubble, credit crunch and stock market crash have wiped out trillions of dollars and this will not go unnoticed.
This is truly the first global crisis of the 21st century. It is not climate change. It is not pollution. It is not a fresh water crisis. It is not a food crisis, notwithstanding current food security issues in several countries. It is not an energy crisis, although energy prices might have played a major role in bursting the U.S. housing bubble. It is an economic crisis of epic proportions that questions the very economic system we chose to build. The house of cards called Wall Street and banking sector has tumbled. The Ponzi scheme has been revealed.
Climate Change, Global Credit Crisis Deepen Poverty and Hunger in East Timor
Aid agencies warn that East Timor faces a food crisis and more than half of its youngest children are going hungry as global food prices soar. A new survey reveals that more than 70 percent of households across East Timor are unable to find enough to eat each day for almost half the year. From Sydney, Phil Mercer reports.
A group of international aid organizations says that East Timor’s “hungry season”, which usually lasts for a couple of months, now extends for almost half of the year.
Billion go hungry as rich countries fail to pay up, Oxfam says
Five months after countries pledged to give more than $12bn (£6.9bn) to address the global food emergency, less than $1bn has been given, according to Oxfam.
In a report to coincide with World Food Day today, the international aid charity berates rich countries for failing to respond speedily or adequately to soaring food and fuel prices.
Richard Heinberg: Food Crisis on the Way
A perfect storm is brewing in the global food system, and North Americans and Europeans may not be spared this time.
Greening Big Oil?: The Difference Between Changing Image and Changing Actions
Chevron launched its “I will” campaign last month in Washington, Houston and cities throughout California. The new ads continue the oil company’s “Power of Human Energy” ad campaign that began about a year ago. Through TV spots, print ads, billboards and a website called Will You Join Us, Chevron says it seeks to raise awareness about energy conservation and efficiency.
But exactly how green can an oil company claim to be? And will consumers buy its claims?
How to survive the energy crisis
Local businesses shared examples of energy saving changes they had made at a practical energy efficient workshop for businesses and institutions, held recently by the Biddeford-Saco Chamber of Commerce and Industry in collaboration with the Natural Resources Council of Maine. Over 40 people listened to suggestions and ideas that were presented at the workshop. With heating oil costs so high, and electricity costs due to increase shortly almost 30%, we need to increase energy savings in our office buildings, apartment houses, factories and homes.
Growing Costs Slow County Road Projects
Highway Commissioner Gary Kennedy says this year was the worst of 27 years he’s spent with the Manitowoc County Highway Department. He lists a litany of problems.
“We had record snowfall, and because of then-record snowfall we had a salt shortage and we used up all our salt, and then came spring, then we had record floods, then came the asphalt prices went up 35 percent, and then diesel fuel prices went up another 35-40 percent.”
Overall auto sales are expected to be 16% lower this year than last. Sales are expected to fall another 11% next year, according to market analysts at J.D. Power and Associates, as worried consumers continue to put off car purchases.
That kind of pressure threatens to kill off at least one of the major Detroit carmakers, Jim Hossack of the automotive consulting firm AutoPacific predicted, and with the steepest sales drops, Chrysler seems to be the weakest of the three.
American Airlines to buy 42 jets
DALLAS (AP) — American Airlines says it will buy 42 Boeing 787-9 jets as part of a move to improve the fuel efficiency of its fleet.
American said Wednesday it expects to get the planes delivered from 2012 through 2018.
Maybe Tesla chairman Elon Musk flipped through the “R.I.P. Good Times” slide deck that Sequoia Capital showed its startup CEOs last week about the tough road ahead. Whether he did or didn’t, Musk pulled a few pages from it, as he announced Wednesday on the Tesla blog that not only would there be layoffs at the electric car startup, he would be taking over as CEO from Ze’ev Drori and delaying the company’s next vehicle.
Ryanair refers ‘profiteering’ BP to UK regulator
Ryanair announced today it has referred BP to Britain’s Office of Fair Trading (OFT) for trying to put up delivery charges for aviation fuel at two airports by 50 per cent.
The budget airline accused Air BP of profiteering and using its monopoly position as fuel supplier at Belfast City and Prestwick airports to introduce unjustified increases.
Airline chief executive Michael O’Leary said: “Because they have a monopoly, they are determined to abuse it. We can’t get a rational explanation from Air BP so we have asked the OFT to write to them and ask.”
Consultant: Green power a real threat to coal
MORGANTOWN, W.Va. –
Solar power plants and other renewable energy sources are real, competitive threats that neither the coal industry nor the state’s political and academic leaders should dismiss, a consultant warned Wednesday at the second West Virginia Coal Forum.
California releases plan to cut greenhouse gases
SACRAMENTO, Calif. - To reach its global warming goals, California must cut greenhouse gas emissions by about four tons per person, which would require cleaner cars, more renewable energy and a cap on major polluters, according to a state plan released Wednesday.
It’s the first comprehensive effort of any state to reduce greenhouse gases in the absence of federal regulation. The plan to be voted on by the California Air Resources Board in December builds upon an earlier draft on ways to meet the global warming law signed by Gov. Arnold Schwarzenegger two years ago.
EU leaders maintain climate targets, timetable
BRUSSELS (AFP) - European Union leaders maintained Thursday their targets and the timetable for their climate change plans, despite objections from some nations, French President Nicolas Sarkozy said.
“I can confirm that the objectives remain the same, the calendar remains the same, now it’s up to (us) to find solutions for those countries that expressed concerns,” he said, at the close of an EU summit in Brussels.
“The climate package is so important that we cannot simply drop it, under the pretext of a financial crisis,” Sarkozy, whose country holds the EU’s rotating presidency, told reporters.
Oil price run-up looks like just another bubble: In hindsight, analysts were ’suckered,’ may have contributed to frenzy
COLUMBUS, Ohio - As oil prices zoomed toward an unheard of $147 a barrel this summer, it seemed every analyst prediction that oil would approach $200 was a self-fulfilling prophecy, until suddenly it was not.
Instead of $200 oil, oil is now $80. Instead of going up, U.S. demand has fallen at the steepest rate since the oil-shocked 1970s. Americans have dramatically cut down on driving over the past year.
Soaring prices for oil and other commodities this summer have turned out to be nothing short of another classic bubble, and the bursting may not be over, one analyst said Monday.
“It’s just amazing that the market gets suckered into this,” said analyst Stephen Schork of the Schork Report, who called the idea of $150 a barrel oil “an obscene number, a perverted, illogical number.”
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I continue to hear people say that the financial crisis has postponed peak oil for years. I do not believe this to be true. What it has done is reduce the capital available for investment into oil. It reduced the ability of energy companies to raise money with their deflated stock and reduced the number of investors with cash to chase oil prices. With the proverbial bubble now deflated it will take some time for the excitement to rebuild. That could be a year or more. Every day that passes with decreased investment brings the peak oil date closer while any decline in demand pushes it farther away. As I pointed out in the Monday newsletter the IEA is still projecting demand growth in 2008 and 2009 even in a recession. That growth will just be a little slower. Meanwhile depletion never sleeps and always increases. The clock is working against those projecting a later date for peak oil.
Mideast grapples with oil price slump
CAIRO, Egypt (AP) — Vast, oil-fueled budget surpluses may cushion some of the Mideast’s major oil-producing countries now that crude prices have plummeted. But Iran, Iraq and a handful of other nations face daunting challenges to make up the money in coming months because of the price drop and global financial crisis.
The differences are stark: developers in the United Arab Emirates — whose economy is more diversified — are still announcing multibillion-dollar building projects. But merchants in Iran went on strike the past few days over tax increases imposed to bolster the country’s budget.
In Iraq, postwar rebuilding could be jeopardized if the vaunted oil-money budget surplus is smaller than expected; countries like Saudi Arabia may only need to trim more ambitious projects.
Oil Falls on Doubts Financial Rescue Plan Will Aid Fuel Demand
(Bloomberg) — Oil fell below $77 a barrel on speculation a U.S. plan to invest $250 billion in banks will be insufficient to avoid recession and boost fuel demand.
“The world is in for a very torrid couple of years that are going to hit industrial demand and oil demand,” said Peter Luxton, a London-based energy analyst at Informa Global Markets. “The global bearish sentiment is dominating.”
Crude oil for November delivery fell as much as $2.58, or 3.3 percent, to $76.05 on the New York Mercantile Exchange. It traded at $76.43 a barrel at 12:36 p.m. London time.
Prices, down 11.3 percent from a year ago, have dropped 47 percent from the record $147.27 a barrel on July 11.
Russian Stocks Tumble as Crude Falls, Investors Turn to Cash
(Bloomberg) — Russian stocks dropped, led by OAO Rosneft and OAO Lukoil, as sinking oil prices hurt the outlook for the economy and investors sold shares to raise cash amid the country’s worst financial crisis since 1998.
OPEC Cuts 2009 Crude Oil Demand Forecast for a Second Month
(Bloomberg) — The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s oil, lowered its 2009 demand forecast for a second month as the worst financial crisis since the 1930s threatens a global recession.
OPEC will hold an extraordinary meeting on Nov. 18 in Vienna, after its decision to trim excess supplies at last month’s gathering failed to check a slump in prices, which have tumbled 49 percent from their July record. The group told members on Sept. 10 to strictly comply with production quotas, implying a cut of about 500,000 barrels a day.
“Dramatically worsening conditions in financial markets indicate strong fallout on the real economy is now inevitable,” the report said. “Ongoing financial market turmoil is expected to continue to impact oil demand well into the coming year.”
OPEC Is Likely to Cut Output 1 Million Barrels, PFC Energy Says
(Bloomberg) — OPEC will probably announce a production cut of 1 million barrels a day at its November meeting, said PFC Energy, an industry consultant that correctly called the decision at the group’s last summit.
Candidates disagree on oil companies’ tax rate
ExxonMobil earned after-tax profits of $41 billion and paid $14.5 billion in worldwide income taxes in 2007 — the highest in corporate history in both categories. The world’s largest oil company is on track to smash both records in 2008, despite a recent decline in oil prices.
Should it pay higher taxes?
Gas lines ‘berserk’ in Frederick
It’s not a mirage.
The Costco gas price sign really reads “Unleaded — $2.69.”
The wholesaler’s Monday holiday price was $2.92, dropping 23 cents in one day.
“Lines have been berserk,” said Pete Barney, Costco assistant manager.
Kuwait Refinery Workers Threaten Strike Over Rights
(Bloomberg) — Workers at Kuwait National Petroleum Co. are threatening to shut down the country’s three refineries from Oct. 19 in a protest over equal rights.
Exxon Is Said to Shut Gasoline Unit at Fos Refinery for Repairs
(Bloomberg) — Exxon Mobil Corp., the world’s largest oil company, plans to shut a gasoline-making unit at the smaller of its two French refineries for repairs early next year, an official with knowledge of the work said.
Angola oil output dips to 1.6-1.7 million bpd
LUANDA (Reuters) - Angola’s oil production has fallen to close to 1.6 million or 1.7 million barrels per day (bpd) from a high of around 2 million bpd earlier in 2008, Angola’s oil minister said on Wednesday.
The drop resulted from an “accident” at the deepwater Block 18 field off the coast of the oil-rich Cabinda province, Oil Minister Jose Vasconcelos told journalists at the opening of the new parliament in Luanda.
Indonesia says S.Korea seeking LNG contract extension
JAKARTA (Reuters) - South Korea is looking to extend contracts to import liquefied natural gas from Indonesia beyond the current 2014 and 2017 terms, Indonesia’s energy minister said on Wednesday.
Korea Gas Corp has a contract for two million tonnes a year that expires in 2014 and another for one million tonnes a year that ends in 2017.
Iraq underwater oil pipelines need urgent repair: FT
DUBAI - Vital Iraqi oil pipelines are in such dire condition they could burst at any time, which would disrupt regional supply, harm Iraq’s economy and could cause an environmental disaster, the Financial Times newspaper reported.
The underwater pipelines that connect storage tanks near the southern Basra oil terminal to offshore tanker fuelling terminals need urgent replacement or repair, the newspaper said on Wednesday, citing a previously undisclosed notification to the US Congress.
‘The likelihood of a worst-case catastrophic failure, subsequent collapse of Iraqi crude oil export revenue resulting in a devastating drop in the Iraqi GDP, global economic market impacts and a possible ecological and environmental disaster should warrant concern,’ the document obtained by the FT said.
Mercedes Diesel SUV Makes Good Gas Mileage, No Smog, Happy Moms
(Bloomberg) — “Pee-yeew!” my dad would call out the open window, “You stink!” This was a 1970s-era ritual played out every time we passed a rattletrap diesel-powered car trailing black haze on the highway. Not kind, maybe, but true. Those suckers stunk up the place.
Though I’m hardly the only American who has negative associations, diesel fuel has seen a major resurgence in Europe, the result of ultra-low-sulfur diesel and engines designed to negate emissions. The benefits are as much as 30 percent better fuel economy and 20 percent to 30 percent less carbon dioxide emissions.
Food Security - an issue for the UK too
For its annual World Food Day (Thurs 16 Oct), the UN Food & Agriculture Organisation (FA0) rightly focuses on the 923 million people suffering from malnutrition in the South - highlighting climate change as the key factor threatening their long-term food security. In the short-term, rising oil prices have led to increasing food costs and scarcities, provoking riots in over a dozen countries from Burkina Faso, Haiti, to Mexico. The diversion of land for biofuel crops has also been a factor - with the world’s largest grain producer and exporter, the US, diverting nearly 20% of its harvest to feed cars, rather than people.
George Soros on the Clean-Energy Economy
Last Friday, in an interview with Bill Moyers on PBS, George Soros, who has made billions of dollars based on his ability to read the ebb and flow of markets, suggested that investing in alternative energy technologies, refurbishing aging electricity grids and pursuing household energy efficiency, among other green strategies, could yet save the global economy.
Mr. Soros, whose prescient book “The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means,” was published in May, told Moyers that the business of green could serve as the new “motor of the world economy” — echoing a refrain he has used before.
Political Momentum Grows For US National Transmission Grid
WASHINGTON -(Dow Jones)- Momentum is growing in Washington for a federal high- voltage power grid to spark growth of U.S. renewable energy supplies and decrease the country’s dependence on energy imports.
Lobbyists and regulators are urging lawmakers to create a national high voltage transmission system that they say would allow renewable projects such as wind and solar farms to flourish.
A growing appetite in Congress to constrain carbon dioxide emissions and a desire tap the nation’s domestic energy sources to reduce dependence on energy imports will likely give a political boost to a federally-mandated national grid.
Although the country has substantial wind and solar potential, much of the generation capacity is located hundreds of miles from the demand centers. A corridor along the Rocky Mountains from North Dakota into the Texas panhandle, for example, could provide nearly a fifth of the U.S.’s power needs, but the largest consumers are located on the East and West coasts. The highest solar potential is in Southwestern states that have comparatively smaller populations.
“We have a chicken and egg problem,” said George Pataki, former New York state Republican Governor. “Developers won’t build a solar system because there isn’t any transmission capacity to move it and utilities won’t build the needed transmission because there isn’t any generation,” he said. Pataki and his consulting firm, the Pataki-Cahill Group, are pushing for Congress to establish federal siting authority that would overcome one of the major challenges to current transmission infrastructure: permitting.
Build wind farms near land to cut costs, UK study finds
LONDON (Reuters) - Britain will fall woefully short of its own renewable energy targets unless the government allows wind farms to be built closer to shore, the Carbon Trust said in a report on Tuesday.
Only a quarter of the wind power capacity Britain needs to meet its target of getting 15 percent of energy from renewable sources by 2020 will be built unless controls on offshore turbines are relaxed to cut costs.
With Little Fuel, Eco-Racers Arrive in Las Vegas
Las Vegas — In a city accustomed to the catering to the strange and offbeat, the arrival Monday evening of Jack McCornack and Sharon Westcott in a topless, two-foot-tall green and yellow roadster at the front door of the storied Sahara Hotel-Casino still turned heads.
Gawkers couldn’t have known