Fossil Fuel Headlines - 24th July, 2005
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Many more articles are available through the Energy Bulletin homepage
Staff, WNEM-TV5 (US)
You saw it here, you saw it on the streets, and you heard it on the radio. Hundreds of people packed the pumps, thinking gas was going to be hiked to over three dollars a gallon but it turned out to be untrue.
People are scratching their heads still wondering how this news got around. We sent Alix Hayes to investigate. At gas stations across Mid-Michigan things were back to normal Wednesday July 10th but the scene the day before, when word of mouth spread that gas prices were surging prompted panicked drivers to pack filling stations fearful their tanks would cost upwards of three dollars a gallon, at any moment.
It was big business for gas stations all over the area it all started when Murphy-Oil employees at a Midland Wal-Mart were testing a new digital gas-gauge sign. A TV5 viewer sent us the picture to the right, of the pumps that confirmed the price read gasoline for three dollars to three-dollars and twenty cents. It's now been fixed, but the rumors spread fast, prompting the Governor to remind the Department of Agriculture to investigate sudden gas gouging. TV5 received a number of calls of other gas stations taking advantage of the rumors, by spiking the price to more than three dollars, but by the time our cameras showed up, prices were high, but normal. If you want to complain about the gas prices call the state at: 1-800-mda-fuel.
(21 July 2005)
Jan Lundberg, Culture Change
...Response to last week's "Preparations and policies for petrocollapse and climate distortion - Welcome to Plan B" were heartfelt. The sentiments out there seem to fall into two main groups: (1) We despair and are doing something, at least, by talking about the issues of peak oil, climate change, etc. (2) We are preparing and resolute, and more philosophical than afraid.
(18 July 2005)
Very long Culture Change newsletter, with reader comments and suggestions for a Peak Oil future.
Adam Porter, Oilcast #19
In this Oilcast: Adam Porter takes a look at the implications for oil over the currency revaluation by China.
Will it mean higher prices? Lower prices? Is it a simple straightforward conclusion or a complex one? How many factors are involved? And what is the most radical aspect of the revaluation?
Oilcast #18: Adam Porter takes a look at the latest falling figures from Norway, plus the effects of Hurricane Emily in Mexico. Also China and Brazil link up, so do Total and Syria and we take a longer look at some of the reasoning around the two camps of China analysts. Are you a China Bear or full of China Bull?
(22 July 2005)
The Oilcast site is updated every few days with news and analysis. Spanish-language programs are also offered.
Bill Henderson via Al-Jazeerah
Sir Bob and Bono's Live 8 activism in building pressure on the G8 for African debt relief and development is commendable, but in the ominous context of peak oil these two entertaining wisemen seem frozen on the beach watching a wave coming in promising death to millions, unthinkably even billions in the Third World if predictions of dieoff materialize.
The Green Revolution was primarily development incorporating the use of fossil fuels mimicking Western agribusiness. Globalization with it's offer of outsourced jobs to the least costly and therefor most underdeveloped parts of the world is also based upon introducing developed world levels of fossil fuel use. Millions have only recently left poor but self-sufficient peasant lifestyles for cash cropping with fossil fuel inputs or factory life in burgeoning cities and are particularly vulnerable.
At $60 a barrel the Third World is already being priced out of oil, but recent questions asked even in wealthy Japan about oil's fungibility - whether it will be possible for everybody to be even in the market for oil - suggest a much more sinister future that requires planning attention now (which actually required understanding and action decades ago).
(16 July 2005)
John Gray, New Statesman
...Matthew R Simmons is convinced that Saudi oil production is near its peak, or indeed may have passed it, a development with awesome implications. Simmons, a veteran oil finance insider who has been an important adviser to the Bush administration, has done a huge amount of research and bases his conclusions on carefully sifted evidence, not large theories.
...Twilight in the Desert is not always easy to read. It largely consists of highly technical discussion of the history and condition of Saudi oilfields. Yet its impact is to transform our view of the world. Many in the oil industry - and particularly Aramco, the Saudi oil company - will dispute Simmons's claim that Saudi production is near its peak sustainable volume.
For most readers the question will be whether Simmons can be trusted. I am certain that he can. He is not the only oil expert to say that a peak in global production may be near (Dr Colin Campbell of the London-based Oil Depletion Analysis Centre is another) and, unlike many in the oil industry, Simmons has no axe to grind. This is a ground-breaking book by an analyst of unimpeachable authority.
(25 July 2005)
John Gray is a leading intellectual in the UK and a critic of globalization. The New Statesman is a prominent liberal-left journal.
Michael C. Ruppert, From the Wilderness
...mandatory and enforced rationing might be the only way to penetrate a very thick American skull. We do reveal a bovine nature on occasion.
So I think it's time we all put rationing (serious rationing) on our schedule of upcoming events.
When? (Sigh). It could be as soon as this winter. I would say, of a certainty, no later than January or February 2007.
(18 July 2005)
Other energy news
Adel al-Khawlani & Yasser al-Mayasi, Yemen Times
SANA’A- Thousands of people streamed into the streets of the capital city and other Yemeni main cities on Wednesday July 20 in protest against the price hike implemented by the government on oil derivatives.
Several locals were killed and others injured in the demonstrations that were accompanied by chaos with open fire shooting in al-Dhale’ and other cities.
The angry protestors in the capital moved toward the Parliament and the Prime Minister’s office protesting against the government policies that worsened the living standards of people.
In Sana’a, the riot, pulling together people from different classes, started from Dar Salm, to the south of the capital, and headed toward the Presidential Palace where all routes leading to it were blocked and manned by security troops. Similar demonstrations accompanied by public chaos and destruction of government and private properties took place at the same time in al-Hasaba and Hayel Streets, north and west of the capital.
(21 July 2005)
Emad Mekay, Inter Press News Service via Common Dreams
WASHINGTON -- At least 13 people were killed Wednesday in the Middle Eastern nation of Yemen in massive protests against fuel price increases that came as part of an economic reform program promoted by the World Bank and the International Monetary Fund (IMF).
According to news reports from Arab television channels and online newspapers, the 13 Yemenis died during protests by thousands of demonstrators angry over the doubling of gas prices in the poverty-stricken country, which is trying to secure new loans.
(21 July 2005)
April Lindgren, CanWest News Service via National Post (Canada)
Electricity shortages that have left Ontario on the verge of brownouts and blackouts during the recent heat wave will be a fact of life for the next few years, Dwight Duncan, the Energy Minister, warned yesterday.
"Ontarians are going to have a couple more summers like this because unfortunately previous governments refused to deal with reality," Mr. Duncan said just hours after the province's electricity supply manager lifted an advisory that urged people and businesses to reduce their power consumption or risk rotating outages.
(22 July 2005)
M.L.Wald, New York Times
WASHINGTON, July 16 - Mark Buford is happy with the Honda Accord hybrid that he bought six months ago, and he has already driven it 13,000 miles. He was determined to buy a hybrid electric car, he said, and this one is clean, "green" and accelerates faster than the nonhybrid version. He just cannot count on it to save much gasoline.
Many people concerned with oil consumption, including President Bush and members of Congress, are pointing to hybrids - vehicles with electric motors as well as internal combustion engines - as a way to reduce fuel use and dependence on imported oil. The first ones to reach the market did that; the two-seat Honda Insight, introduced in December 1999, was rated at 70 miles per gallon, and it was followed by the five-seat Toyota Prius, also built for reduced fuel consumption. Those cars have no nonhybrid equivalents. Then came the Civic hybrid, designed to perform almost as well as the original, only using a lot less gasoline.
But the pendulum has swung. The 2005 Honda Accord hybrid gets about the same miles per gallon as the basic four-cylinder model, according to a review by Consumer Reports, a car-buyer's guide, and it saves only about two miles a gallon compared with the V-6 model on which it is based. Thanks to the hybrid technology, though, it accelerates better.
Hybrid technology, it seems, is being used in much the same way as earlier under-the-hood innovations that increased gasoline efficiency: to satisfy the American appetite for acceleration and bulk. ...
(17 July 2005)
Eric Kelderman, Stateline.org
In 1996, California launched a national fad by allowing power utilities to compete for customers within and across its borders. By 2000, 23 states and the District of Columbia had rushed down the path of electricity deregulation.
But the fad to open up the electricity market has faltered. Residential consumers have found little reason to switch to new power providers, and the promises of lower prices and a reliable electricity infrastructure have failed to materialize. The California energy crisis of 2000-2001, the financial scandals of energy giant Enron, and the massive Northeastern blackout in August 2003 have soured policy-makers, consumers and even some power companies on electric utility competition.
As a result, Arkansas, California, Montana, Nevada, New Mexico and Oklahoma have changed course and abandoned or indefinitely delayed deregulation. Oregon has limited electricity competition to large industrial customers, and pressure is rising in both Illinois and Michigan to pull back from utility restructuring. Consumers in many states also are bracing for rate hikes in coming years as price caps -- enacted to protect them during the early phases of deregulation -- expire.
(21 July 2005)
Staff, SF Chronicle
Soaring temperatures, increased energy demand and power plant outages prompted California's power grid operator on Thursday to issue a power emergency for Southern California.
Some 2,000 megawatts of power were knocked offline for various reasons, requiring the region to import more power from neighboring states and loading transmission lines to capacity. A megawatt is enough to power about 750 homes.
Up to 165,000 residential users participating in a voluntary program had their air conditioning turned off remotely, saving up to 200 megawatts, said Independent System Operator spokeswoman Stephanie McCorkle.
More hot weather is expected in Southern California today. McCorkle said no problems are expected in Northern California, where hydro power and imports from the Northwest are meeting the demand.
She did urge conservation statewide, however, because recent transmission improvements allow more power to be shipped from Northern to Southern California.
(22 July 2005)
John Darling, Mail Tribune (Oregon)
High prices threaten local trucking companies and businesses with large transportation costs
With fuel prices holding at near-record highs, local truckers already operating on a slim margin are having to pass a fuel surcharge on to the businesses they serve. On down the line, businesses are faced with the hard choice of passing costs on to consumers, thus losing their competitive edge — or eating it at the bottom line
(22 July 2005)
As prices climb, more drivers flee pumps without paying
Anna Levine-Gronningsater, Christian Science Monitor
More gas stations are making prepaying mandatory to cut down on thievery, which last year added up to $237 million.
NEW YORK - Call it theft to obtain octane.
As gasoline prices stay well above $2 per gallon, gasoline station owners are increasingly encountering customers who pump but don't pay.
The rising theft rates are yet one more sign of consumer frustration over the relatively high price of topping up their tank. Only five years ago, it cost $24 to fill up a 20-gallon tank. Today, it costs $46. For many low-income people, the increase is more than they can manage.
(22 July 2005)
Politics and Economics
Paul Krugman, NY Times (Op-ed column)
Thursday's statement from the People's Bank of China, announcing that the yuan is no longer pegged to the dollar, was terse and uninformative - you might say inscrutable. There's a good chance that this is simply a piece of theater designed to buy a few months' respite from protectionist pressures in the U.S. Congress.
Nonetheless, it could be the start of a process that will turn the world economy upside down - or, more accurately, right side up. That is, the free ride China has been giving America, in which the world's richest economy has been getting cheap loans from a country that is dynamic but still quite poor, may be coming to an end.
(22 July 2005)
Krugman's analysis of the most significant economic news this week: the unpegging of the Chinese currency. Krugman's columns are also available on the Unoffical Paul Krugman Archive; click on the "Columns" button.
Michael Weinstein, PINR
During the week of July 11, the bidding war between U.S.-based oil giant Chevron and the Chinese National Offshore Oil Corporation (C.N.O.O.C.) for control of U.S. oil company Unocal heated up, with both adversaries mounting major public relations and lobbying campaigns, and U.S. Congressional opposition to a C.N.O.O.C. takeover ratcheting up to a fever pitch. [See: "Intelligence Brief: China"]
Until C.N.O.O.C. weighed in with an unsolicited $18.5 billion cash offer, it appeared that Chevron's $16.6 billion bid for Unocal would face clear sailing. The Chevron acquisition had already gained approval from Unocal's board, pending an August 10 stockholder vote, but C.N.O.O.C.'s intervention sent the deal off course. At a July 17 meeting, Unocal's board rejected C.N.O.O.C.'s offer in its present form, but the decision was not final. Analysts believe that Unocal's board is trying to play the two sides off against one another, seeking to get the adversaries to raise their bids.
The wave of economic nationalism set in motion by Chevron's lobbying carries with it the long term possibility that U.S. resistance to asset acquisition might place foreign investments of U.S. corporations in jeopardy, stalling or even reversing economic globalization. Analysts agree that C.N.O.O.C.'s bid, which follows Lenovo's acquisition of IBM's personal computer business and Haier's bid for Maytag, will be repeated by many more efforts by Chinese firms to acquire U.S. assets. As time goes on Washington will be increasingly forced to choose between globalization and nationalism.
(19 July 2005)
"The Power and Interest News Report (PINR) is an independent organization that utilizes open source intelligence to provide conflict analysis services in the context of international relations. PINR approaches a subject based upon the powers and interests involved, leaving the moral judgments to the reader."
Aleksei Efimov, Novosti (Russia)
BEIJING - Russia is ready to deliver 15 million tons of oil to China in 2006, Russian Transportation Minister said Thursday. "China has tasked Russia with delivering 10 million tons of oil this year," Transportation Minister Igor Levitin said.
He said Russia is ready to meet the challenge. He also said Russia delivered only 3.7 million tons within the first six months of this year. Levitin said the ministry fulfils all obligations concerning the transportation of oil and all other issues concerning the volume of oil deliveries should be addressed to oil companies. He said the railroad stretch between Karymaskaya and Zabaikalsk will be completely electrically run by 2007, but until then diesel locomotives will deliver oil.
The transit of oil via Mongolia will be increased as well, Levitin said. Since Russia owns 50% of Mongolian Railways, it is ready to change the duty policy in order to raise its competitiveness level. According to him, Russia plans to transport at least 3 million tons of oil via Mongolia in the next few years.
(21 July 2005)
Amit Prakash and Anuchit Nguyen, Bloomberg via IHT
Singapore -- Siam City Cement of Thailand is burning used tires, trees and even rice husks to generate the heat needed to make cement as surging oil prices squeeze profit. "It's a very tough time to do business," said Chantana Sukumanont, senior vice president of the company. "We'll lose most of our customers if we raise prices."
Oil prices have risen 40 percent in a year, raising costs for companies across Asia and leaving local consumers with less to spend on their products. Costlier fuel is also damping overseas demand for exports of goods, like Compal Electronics' notebook computers. That is further curbing growth in Asia, a region that accounts for 30 percent of the global economy. ...
(20 July 2005)