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Fossil Fuel Headlines - 28th July, 2005

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Many more articles are available through the Energy Bulletin homepage


Peak Oil

Oregon Dept. Transport takes a peak at the future

Adrian Chen, Willamette Week Online (US) (Oregon)

State report forecasts the end of cheap oil - and it could be soon.
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In theory, there are few things less terrifying than an Oregon Department of Transportation report detailing a pilot program to tax motorists by mileage driven.

But tucked into the 55-page report on the possibility of trading taxes by the gallon for taxes by the mile (see "Back-Seat Big Brother," May 25, 2005) is one passage that-if you like highway travel and the American Way of Life-is more than a little frightening.

"Some petroleum industry experts predict that before 2010 the world production of conventional oil will crest and enter a permanent decline," the report states under the heading "Peak Oil."

Peak oil is the theory that, due to a finite supply of petroleum, the world's production must soon fall.

With rising gas prices and China's growing petroleum demand, peak oil has become an increasingly hot topic. Books and websites declare the end of the oil era, while Big Oil says the peak could be at least 100 years away.

The ODOT report released this month takes a more pessimistic tone. "There's no controversy over the idea of a peak," says the report's author, James Whitty. "The question is: When will it happen?"

After the peak, the report says, increasingly fuel-efficient vehicles will render the 24-cent-per gallon gas tax useless to fund road repairs. (Read the report at www.oregon.gov/ODOT/HWY/OIPP/ruftf_reports.shtml.)

What the report doesn't address is the theory's bleaker side: Competition for dwindling oil reserves could lead to nuclear war, economic catastrophe or-if you're a real pessimist-the end of civilization. By then, potholes might be the last thing on people's minds.
(27 July 2005)

The `peak oil' controversy

Pratap Ravindran, The Hindu Business Line

MUCH of the public discourse on the spiralling price of crude has rested on a premise — one that is contrary to at least one fundamental law of physics — that oil will last forever. However, this time around, the reality of an imminent energy crisis will not go away if ignored long enough.

The increasing energy cost of oil creates what can be called a positive feedback loop: As oil is used directly or indirectly in just about every human activity, an increase in the energy cost of oil will result in an increase in the cost of other sources of energy too.

Sooner than later, the consumption of oil is going to exceed its supply. As of now, there is no known substitute for petroleum in terms of quality. The question, therefore, is not `whether' but `when' oil will run out.
(26 July 2005)
Good summary. Mentions the EROEI concept, though not by name.

Peak Oil: the turd on the table

Nick Possum's Whispers From the Streets (Australia)

...It was pouring in Sydney, and the North Coast and even west of the mountains, but still Warragamba Dam wasn’t filling up. It just wasn’t raining where Sydney really needed it.

It was an object lesson in resource constraints. If rain won’t fall on the catchment, you won’t get any water in the dam and you’re going to have to figure out Plan B, pronto.

It reminded me of that other huge, unthinkable problem; the one that’s behind the inexorable rise in the price of petrol. It’s so big, scary and imminent that nobody in the mainstream media or the government will mention it, even though it’s sitting there like a big steaming turd on the political table.
(1 July 2005)
Wins the award for "Most Graphic Metaphor."

The Problem with Natural Gas

Frank Clemente, EnergyPulse

In 1997, Joseph Riva, senior geologist writing for the Colorado School of Mines, turned a skeptical eye toward the rapidly emerging dependence of the United States on natural gas (NG). Riva suggested that the rush to embrace NG as the primary fuel to meet incremental electricity and space heating demand was based more on sociopolitical hope than on geological reality. Noting that domestic NG production had peaked at 22.6 tcf in 1973, Riva questioned not merely whether the EIA projected production of 25.5 tcf by 2015 could be met but even whether the then current output of 19.8 tcf could be maintained. Basing his analysis on the level of known reserves and the rate of new discoveries, Riva argued that unless an unprecedented number of large fields were found soon:

by early next century, natural gas will have become more of an energy problem than an energy solution.

Subsequent events have provided ample support for Riva’s grim assessment:

  1. domestic NG production only reached 19.7 tcf in 2004 despite an additional 461 rigs in the field—an 82 % increase over 1997;

  2. NG well head prices have steadily escalated from $2.10 mcf in 1998 to $ 6.31 mcf in the first four months of 2005 – an increase of $ 4.21 ( 200 %); and
  3. chief U.S. policy makers (e.g., Alan Greenspan) now readily admit the nation cannot meet its NG supply needs and will be increasingly reliant on imports from politically unstable areas – darkly paralleling our current dependence on foreign areas and the entailing socioeconomic costs.

In essence, Riva’s foretelling is coming to pass. The present paper takes his concerns as a point of departure to delineate a range of reasons as to how unless the United States begins to take the NG supply / demand situation more seriously, NG is likely to move from the role of energy boon to national liability.
Frank Clemente is Senior Professor of Sociology and Energy Policy, Penn State University.
(18 July 2005)

Zimbabwe's Bustle, Business Evaporate With Fuel Shortage
Crisis Compounded By Slum-Clearing

Craig Timberg, Washington Post
HARARE, Zimbabwe -- This had long been a city in motion. Corners were crammed with men offering fruit or cigarettes, restaurants were busy and plentiful, shops were well-stocked. And only the foolhardy would dare cross the traffic-clogged streets without the assistance of a green light.

But four months into a crushing fuel shortage, and more than two months since the government began a campaign to clean up slums and informal markets, the capital of about 1.4 million has slowed to a halt.

Empty cars are parked in gasoline lines that stretch for blocks. Even at rush hour, pedestrians can stroll across major boulevards without a glance in either direction. With tens of thousands of street vendors reportedly arrested, the few that remain have turned shy. Grocery stores routinely run out of cooking oil, sugar and soap. Shoppers must wait in line to buy a single loaf of bread.
(25 July 2005)

Oil and Gas: Author Kenneth Deffeyes predicts oil production peak of Thanksgiving Day, 2005 (video)

E&E TV

In 1956, geologist M. King Hubbert accurately predicted that United States oil production would peak in the early 1970s. Nearly half a century later, another expert using the same theories says world production could reach its apex this year. Geologist Kenneth Deffeyes joins OnPoint to talk about his latest book, "Beyond Oil: The View from Hubbert's Peak," and explain his energy forecasts. Deffeyes describes the economic fallout that could accompany a global peak in oil and also examines whether natural gas, nuclear power, hydrogen and other energy sources are good alternatives.
(27 July 2005)

Indonesia's oil to run out in next 15 years: President Yudhoyono says

ANTARA News (Indonesia)

Beijing - President Susilo Bambang Yudhoyono said that in the next 15 years the crude oil reserves in Indonesia would run out if there were no more new oil fields had been discovered.

President Yudhoyono who was paying a state visit to China on July 27 to 30, 2005, made the statement in a meeting with members of the Indonesian community here on Wednesday night.

Apart from oil, he said, the natural gas reserves in the country would also run out in the next 60 years, while the new coal deposits were still sufficient for the next 150 years.

Due to its depleting natural resources, President Yudhoyono who underlined the importance of energy conservation, has also underlined the need for energy diversification, and stop relying on natural oil, and start using coal, gas, geothermal energy and briquettes.

The Head of State further said that Indonesia in its history has never suffered from the crude oil price hike in the international market which had reached 60 US dollars per barrel.

"It has also caused an increase in the government`s fuel subsidy to Rp120 trillion, which has never occurred in any other country in the world," he added. "In Indonesia, some 25 to 30 percent of its state budget of Rp500 trillion had been used for the subsidy."

As a result, he said, Indonesia have problems in its development efforts, especially in sectors like healthcare, education and people`s welfare.
(28 July 2005)
ANTARA is Indonesia's National News Agency.


Other Energy Issues

Brazil to Achieve Oil Self-sufficiency by December

Staff, Prensa Latina (Cuba)

Rio de Janeiro. Brazil should achieve production of 1.8 million barrels of oil daily by December to achieve self-sufficiency in oil, according to estimates from state company Petrobas published Monday.

This production will allow a saving of $3 billion annually in crude oil and derivative imports, Jose Eduardo Dutra told O Globo before retiring from the presidency of the company.

To reach that production, the country will implement a platform that will produce 180,000 additional barrels of oil daily, and other 60,000 barrels from the Jubarte field.

Despite that self-sufficiency Brazil will not stop importing oil because its refineries only process light crude oil, but as compensation it will export the heavy ones it cannot refine, until a technological modification expected to be completed in 2010.
(25 July 2005)

Venezuela May Not Meet Oil Output Goal, JPMorgan Says

Sri Jegarajah, Bloomberg

Venezuela may fail to meet its target of raising daily crude oil output to 5 million barrels by the end of this decade because of reduced government spending and concern about policies that discourage foreign investment, JPMorgan Chase & Co. said.

Production growth from state-run Petroleos de Venezuela, South America's largest oil company, has been restrained as profits are channeled into the government's welfare programs instead of maintaining and expanding oil fields, according to the July 26 report.

``Skepticism abounds about Venezuela's ability to meet its goal of boosting production to 5 million barrels a day,'' the analysts said. ``Windfall oil revenue has been spent on social programs aimed at eradicating poverty rather than the oil sector, which has negative implications for future production growth.''
(XX July 2005)

UK Generators turn to coal as cost of natural gas soars

Carl Mortished, Times Online

THE high cost of natural gas is forcing electricity generators to burn more coal in an attempt to keep a lid on power prices. A doubling of the price of summer gas over the past two years has encouraged generators to switch back to cheaper coal, but the cost savings come at an environmental price.

Powergen, Britain’s second-biggest generator, said that it was using 20 per cent more coal than last summer, taking advantage of the widening gap between the costs of the two fuels. Last week the company gave in to the cost pressure of rising wholesale fuel prices, introducing steep increases in gas and electricity tariffs for its residential customers.

John Ridley, an energy trader for Powergen, said the company was using more coal than expected. “Coal is the main generating source in the winter months, but in the summer gas normally runs ahead of coal,” he said. “In the summer of 2003, gas was 16p per therm, but this year it’s 30p per therm. You think long and hard about using gas generators.”

...Coal was once the UK’s most important source of fuel for electricity generation, but is in sharp decline, condemned for its high sulphur and carbon dioxide emissions.

“Coal generators emit approximately double the amount of carbon compared with gas,” Mr Ridley said.
(25 July 2005)

UK increasingly reliant on oil, gas

O&GJ via PowerSwitch
The UK will be increasingly reliant on oil and gas to meet its primary
energy needs during the next 10-15 years despite efforts to promote
renewable energy sources, the UK Offshore Operators Association Ltd.
(UKOOA) said.

“The UK’s reliance on oil and, in particular, gas as primary sources of
energy is increasing,” said UKOOA Chief Executive Malcolm Webb. “The
government’s projections show that the UK’s oil and gas needs will rise
from the current 74% of primary energy to 85% in 2020.”

“If we don’t produce oil and gas ourselves, then we will have to import
it,” Webb said. “If the UK had to import all its oil and gas, in 2005
alone our import bill would be around £30 billion higher-increasing the
current UK trade deficit by almost 75%-and UK tax revenues from oil and
gas would be about £10 billion lower because imported oil and gas pays
no UK corporation tax or petroleum revenue tax.”
(27 Jul 2005)

UK NG: The big chill

Sylvia Pfeifer, The Telegraph

Manufacturers are warning the DTI that Britain may run out of gas this
winter. Sylvia Pfeifer examines why they are so concerned

...the UK has become increasingly dependent on natural gas from
continental Europe as its own supplies of North Sea gas dwindle. When
demand for gas is high during cold weather, it has to be imported via
cross-Channel pipelines, notably the interconnector, a two-way pipe that
imports gas from Europe.

Many in the UK energy sector suspect that European companies have
contributed to recent price rises by deliberately withholding supplies
during times of shortage. ...

So what would happen in a severe cold snap? The interconnector - the
pipeline which runs from Bacton in the UK to Zeebrugge - is designed to
supply gas to the location where there is the highest demand and price
but it has not always proved to be 100 per cent reliable. Earlier this
year for example, when wholesale gas prices in the UK hit £2 per therm
in the first week of March, the interconnector was still exporting gas
to Europe rather than bringing it in.
(24 Jul 2005)

Living on brink of blackouts
Keeping power on largely dependent on valley residents' conservation habits

Benjamin Spillman, The Desert Sun (Palm Springs, Calif.)

Four years after the last so-called "rolling blackout," Californians are using record amounts of electricity but have yet to return to the dark days of the infamous 2001 energy crisis. But even though there's more juice today than four years ago, something as small as a shift in the wind could trigger a statewide power alert.

And a burgeoning population in the eastern Coachella Valley means a local utility that skated through the energy crisis four years ago is closer to the edge today. That leaves locals to balance grid-saving electricity conservation against the desire for a cool reprieve from soaring desert temperatures. Wednesday's high was 107 degrees. Today it's expected to hit 110.

"I work in this heat all day long; I want to go home and have a nice cool house," said George Garcia of Cathedral City during a break from some yard work in Rancho Mirage.

The California Independent System Operator - a state-sponsored nonprofit corporation that monitors electricity supply and demand over about 75 percent of the state - reports a Stage One power alert is "possible" today. That would happen if customer demand is high enough to tap into a 6 to 7percent reserve supply, according to the system operator. During a Stage One Emergency, the system operator urges customers to voluntarily reduce power to avert stronger management measures up to and including the dreaded "rolling blackouts," also known as a Stage Three Emergency. The system operator says the blackouts, a measure it could take should reserves dip below about 1.5 percent, are unlikely to occur.

"When demand for energy gets so high and there is no additional energy to meet that demand, we would start slowly eating into that reserve," said Gregg Fishman, a spokesman for the operator.

Statewide, the operator's grid reached a near-record peak demand of 45,431 megawatts on Wednesday. A megawatt provides enough power for 650 average homes. Although Stage Two and Three emergencies are unlikely, Fishman said that could change if there is a major supply disruption or if a high-pressure system that's shielding the populated coast from the inland heat were to shift to the west
(21 July 2005)

Cost of electricity rising like summer heat

Ron Scherer, Christian Science Monitor

NEW YORK – With the nation's demand for electricity soaring, the cost of staying cool this summer is on the rise.

As many consumers will find out when they get their utility bills, gasoline is not the only form of energy that costs more. Even before air conditioners were cranked all the way up, many utilities were predicting that prices would rise 7 percent or more. Now, with the heat and humidity of August yet to come, utility companies aren't sure how much more consumers will pay - except to say they will.

An indication of how much some utilities are paying to meet the demand: The price of electricity on the spot market has doubled in two months.

"Spending on electricity is the highest as a share of total consumer spending since the California electricity crisis in 2000," says Mark Zandi, chief economist at Economy.com. "Total spending on both electricity and energy is at a record high."

The higher cost is not a good sign for the economy. Paying for the extra kilowatt hours will hit consumer pocketbooks later this summer or early in the fall - one of the peak retail periods, when many families could be wandering the aisles for back-to-school purchases. And the cost of beating the heat is especially difficult for senior citizens and the poor, prompting calls for federal emergency funds.

In a normal summer, electric bills rise as individuals use more air conditioning. But this summer has been so hot that to meet the soaring demand, many utilities have had to turn to more expensive power plants, known as "peak generating plants." Instead of relying on coal or nuclear fuel, many of these power producers use more expensive oil or natural gas to power their turbines.
(27 July 2005)

Regional power grid operator reports largest-ever peak load

Erik Schelzig, Associate Press via CentreDaily

CHARLESTON, W.Va. - Regional power grid operator PJM Interconnection LLC said it set a world record Tuesday afternoon with a peak load of about 135,000 megawatts - enough to power 108 million homes under normal conditions.

"It was the largest load ever dispatched," said PJM spokesman Ray Dotter.

PJM coordinates the movement of electricity between 13 states ranging from Illinois to North Carolina, serving about 51 million people.
(26 July 2005)

The other gas is going up in price

Bill Virgin, Seattle Post-Intelligencer (columnist)

It's time to start fretting about the price and availability of gas. No, not gasoline. You're probably plenty adept at worrying about that fuel without our encouragement. Instead, let us boost your nervousness about a commodity you're probably not thinking about much in this week of 80-degree-plus weather -- natural gas.

About January or February, you may be noticing that natural gas has gotten more expensive -- a lot more. Steve Reynolds, chief executive officer of regional utility Puget Energy, says gas prices could approach $8 per million British thermal units (Btu) this winter, about quadruple the price of just a few years ago.

Ratepayers of this region would feel the full brunt of that increase only if Puget bought all of its gas as it needs it -- which it doesn't. Puget does make some spot-market purchases, but it also has long-term contracts, some at fixed prices, some with clauses to allow for adjustments.

Still, the price is definitely going up because of some short-term trends -- increased demand for gas to heat homes, run businesses and generate electricity, production that hasn't kept pace and the increased price for oil, which in some markets competes with natural gas.
(26 July 2005)
Later in the column, Virgin seems to advocate local LNG terminals.

Science of oil rigs: surviving Gulf storms

Kris Axtman, Christian Science Monitor

As more drilling moves into the path of hurricanes, giant rigs get stronger moorings and GPS devices.
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HOUSTON – Just a day before hurricane Emily pounded into the Mexican coastline, BP's recovery team finished righting Thunder Horse, the world's newest and biggest oil and gas platform, located 150 miles southeast of New Orleans in the Gulf of Mexico.

It had partially collapsed during hurricane Dennis - just four months after US Interior Secretary Gale Norton declared in a dedication ceremony that it was an "anchor of energy stability," designed to "withstand the worst that winds and waves will throw against it."

The tipping of Thunder Horse, weighing more than 50,000 tons and capable of drilling in waters up to 6,000 feet deep, points up just how vulnerable the industry is to powerful storms - even with the most advanced technology.

But so far this season, offshore oil production has continued relatively unaffected.

That's in part because the storms have not been as damaging as in past years. But it also has much to do with lessons learned from last year's hurricane Ivan, which tore through the Gulf damaging more than 30 drilling platforms and shutting down 83 percent of oil production at its peak.
(26 July 2005)

Worldwide Demand for Uranium Places Utah in Mining Mix

Staff, Deseret News (Utah) via Red Nova

Grand Junction, Colo. -- In western Colorado and eastern Utah, where salt wash deposits and sandstone hold uranium ore, there's a scramble on for mining claims, a demand for processing facilities and a clamor for miners.

The latest race for uranium yellowcake, spurred by plans for increased nuclear power across the globe, follows years when claim activity was nearly nil.

The 435 nuclear reactors in the world, including 104 in the United States, need 180 million pounds of uranium annually, but only 100 million pounds have been produced in recent years. China and India are leading a worldwide push for more nuclear power with ambitious plans for new power plants. President Bush wants to increase the 20 percent of U.S. power produced in nuclear plants.

With that growing demand, if no new supplies were mined, domestic uranium would run out in three years.
(25 July 2005)

UK power industry backs future role for nuclear

Reuters
LONDON (Reuters) - Britain's biggest energy suppliers on Monday backed the future use of nuclear power in the UK and urged the government to reduce obstacles to the construction of new reactors.

The Association of Electricity Producers (AEP), whose members include EDF, E.ON, RWE and Scottish and Southern Energy, said a new fleet of reactors would benefit Britain in terms of supply security and cutting greenhouse gas emissions.
(25 July 2005)

Bush urges agencies to assess possible coal shortage

Melissa Shuman, The Kansan (US)

U.S. President George Bush has asked agencies like the Board of Public Utilities to help evaluate a nationwide coal shortage.

On Friday, the North American Electric Reliability Council sent a letter to utility managers about a team being assembled by the U.S. Department of Energy to study reduced coal deliveries because of "limitations established by the railroad." Bill Camm, director of production support services, said construction to railroad tracks in Wyoming has slowed coal supply trains in utilities across the Midwest. ...
(25 July 2005)


Politics and Economics

I haven't felt much like discussing the Energy Bill...

Prof. Goose, The Oil Drum
...because I have felt it would be a waste of our time. It's going to pass. Hot diggity damn.

Ezra Klein sums up my reaction to what can only be viewed as an anti-climactic event:

Bush's energy bill is headed for passage, and thankfully so. Save for substantive modernization of our electricity grid, an increase in CAFE standards, an actual stance on global warming, a coherent framework for reducing our oil consumption, a serious investment in natural gas, an actual interest in new technologies for alternative sources, and really anything that'd have any sort of worthwhile impact on our energy situation at all, this bill has is just what we need. Subsidies. Giveaways. Handouts. Protection. Guidelines. Bureaucracy. All sprinkled with liberal amounts of Corporate Love and put on the Senate's desk.

*sigh* That is why the two party system we currently have will be too slow to address/solve the problems that we face (not just with peak oil, but with oh so many other things). Both parties are motivated by gaining/keeping power, and in the democratic process that we currently face, that means not taking on problems until it is politically rational to do so. Bully for us.
(26 July 2005)
I second the emotion. (See original article for links.) -BA

Provisions to Curb Oil Use Fall Out of Energy Bill

Carl Hulse, NY Times

WASHINGTON, July 25 - Working furiously to try to strike a deal on broad energy legislation, Congressional negotiators on Monday killed two major provisions aimed at curbing consumption of traditional fossil fuels like oil, natural gas and coal.

House members rejected an effort to incorporate a plan passed by the Senate to require utilities to use more renewable energy like wind and solar power to generate electricity. They also defeated a bid to direct the president to find ways to cut the nation's appetite for oil by one million barrels a day.

Backers of the initiative to identify the oil savings said it was an alternative to the politically difficult approach of increasing automotive gas mileage standards and would demonstrate that Congress was serious about cutting the nation's dependence on oil imports.
(25 July 2005)

The World Is Round
Review of The World Is Flat: A Brief History of the Twenty-first Century by Thomas L. Friedman

John Gray, The New York Review of Books

...In The World Is Flat, Friedman tells us that globalization has three phases: the first from 1492 to around 1800, in which countries and governments opened up trade with the New World and which was driven by military expansion and the amount of horse-power and wind power countries could employ; the second from 1800 to 2000, in which global integration was driven by multinational companies, steam engines, and railways; and the third, in which individuals are the driving force and the defining technology is a worldwide fiber-optic network. In each of these phases, he tells us, technology is the driving force: globalization is a byproduct of technologi-cal development. Here Friedman deviates from the standard view among contemporary economists, who see globalization largely as the result of policies of deregulation. Here he is closer to Marx—and to the realities of history.

In any longer perspective what we are witnessing today is only the most recent phase of worldwide industrialization. In the nineteenth century the world was shrunk by the advent of the telegraph; today it is shrinking again as a consequence of the Internet. Contrary to Friedman, however, the increasing facility of communication does not signify a quantum shift in human affairs. The uses of petroleum and electricity changed human life more deeply than any of the new information technologies have done. Even so, they did not end war and tyranny and usher in a new era of peace and plenty. Like other technological innovations, they were used for a variety of purposes, and became part of the normal conflicts of history.
(11 Aug 2005 edition)
Long "big-picture" analysis by a leading UK intellectual and critic of globalization, John Gray. Gray also has written about Peak Oil in recent essays.

Yemen cuts fuel prices after riots

Staff, Aljazeera

The Yemeni cabinet has decided to cut fuel prices, less than a week after 22 people were killed in riots sparked by price rises for petrol, diesel and kerosene.

A Yemeni official on Tuesday said the lower prices would come into effect on Wednesday. Analysts had expected the government to revise its decision to appease public anger.

Price rises caused by cuts in subsidies set off riots in Yemen in the past, often leading the government to revise its decision.

More than 300 people, including about 250 security forces and police, were injured in last week's nationwide protests against the subsidy cut, which almost doubled the price of petrol
(27 July 2005)

Oil inflames Nigeria's ethnic tensions

Christian Allen Purefoy, Christian Science Monitor

Representatives of the Niger Delta are boycotting reforms to the Constitution because they want half of oil revenues.
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LAGOS, NIGERIA – Dispute over the allocation of Nigeria's oil wealth has brought to the surface the country's many ethnic and religious differences and now threatens to spill over into streets and oil facilities.

Delegates of the oil-rich southern Niger Delta region, or "south-south," last week staged a walkout from the National Political Reforms Conference, called to rewrite the country's Constitution and ease ethnic and religious tensions. On Sunday, they continued their boycott by turning down an invitation to a presidential gala where recommendations from the conference were submitted, which included combatting electoral fraud and booting agriculture.

At issue is the country's oil wealth - and who gets it. Last year, Nigeria's revenue from oil exports totaled $27 billion, making it one of the world's Top 10 oil producers and the United States' fifth-largest supplier. Southern delegates want immediately to raise the region's cut to 25 percent of revenue, up from the current 13 percent, with a target of 50 percent within the next five years; the conference offered the region 17 percent. How this issue is resolved will go a long way to determining what drivers will pay at the pump.
(26 July 2005)

Exxon to Post Surge in Profit on Record Oil Prices, New Fields

Joe Carroll, Bloomberg

Exxon Mobil Corp., the world's largest investor-owned oil company, may post a jump in second- quarter profit to about $8 billion on record prices and increased production from new fields off Africa's coast.

The company may report tomorrow that net income climbed 40 percent to $1.24 a share, the average estimate from 20 analysts surveyed by Thomson Financial. Profit may be the second highest ever for Exxon Mobil, propelled by a 39 percent increase in U.S. oil prices from the year earlier.

Chief Executive Lee Raymond is using advances in drilling off Africa's coast to bolster output as energy demand from Asia and the U.S. increases. Exxon Mobil, based in Irving, Texas, is betting on larger projects and is taking bigger stakes in development partnerships such as Kizomba, a group of oilfields off the coast of Angola.
(27 July 2005)

Japan's provocation in East China Sea very dangerous

Staff, Global Times translated and re-published by People's Daily Online (China)

Japanese enterprises' act of trial extraction of oil and gas resources in China's exclusive economic zone approved for the first time by the Japanese government on July 14 quickly aroused strong repercussions among various social circles. What's more, the Japanese government, in defiance of China's deep concern, gave Japanese names to three Chinese oil-gas fields in the East China Sea.

Recently there have been unceasing frictions between China and Japan on such issues as understanding of history and history textbook. Discussions on the trial exploitation of oil-gas fields in gravely disputed East China Sea area in such a sensitive period will not only make the East China Sea the most dangerous area for possible eruption of conflicts between the two countries, but will also worsen China-Japan relations. Why is Japan so audacious to openly make serious provocation and infringement on China's sovereign rights and interests? What on earth does Japan want to do in the East China Sea?
(18 July 2005)

Will China pose a threat to world energy security?

Editorial, People's Daily Online (China)

China's energy issue has long been under the spotlight in the world recently. Some foreign media even warned against the prospect of "China's demand for energy as a threat to the world". Does that logics hold any water?

As Mr. Jia Qinglin, Chairman of CPPCC, put it in his speech at the Boao Forum in April this year, China stands not only as a big energy consumer, but also a major energy producer. Imports, he claimed, only constitute a minor part of China's energy mix which depends mainly on the domestic resources.

Minister of the National Development and Reform Commission Ma Kai has confirmed that the country's domestic supply satisfied 94 percent of the total demand in 2004.

China's energy structure is featured with the predominance of coal which accounts for 76 percent of the country's total energy production and 68 percent of the country's total energy consumption.

The other facts that Ma highlighted about China's energy sources also encouraged his optimism toward the potential of China's energy supply in the future. He insisted that the proved coal reserves are much lower than the estimated geological coal reserves in place, two-thirds of water resources remain to be exploited for power generation, and development of various kinds of new energy still have much room.
(27July 2005)

A Crude Approach

John M. Peters, LewRockwell.com

The Bush Administration has treated with scorn, accusations that its invasion and occupation of Iraq were motivated by the drive to control Iraqi oil. Yet, the evidence - both historical and current - continues to mount in support of that theory.

Starting with World War I and the proliferation of machines fed by fossil fuels nations began to realize the dire need to capture and control sources of oil, both as a means of fueling their own war machines and as a means of denying their enemy the precious resource. The dynamics of oil supply and demand would shape entire military campaigns as well as the food chain among nations. Strategically and literally war was being fueled by oil. ...
(26 July 2005)

Energy Bill: Obnoxious-lite

Seattle Post-Intelligencer (editorial)

Congress is ready to approve an energy bill. The best hope is that it won't cost taxpayers too much while doing minimal damage to the environment and consumer protection, and, potentially, promoting advances in alternative fuels. But even supporters admit than lower gas prices are a long way off.

Congressional negotiators reportedly have decided to drop one of the bill's more obnoxious provisions, an exemption from lawsuits for the makers of a gasoline additive that has polluted groundwater in some areas. But other troubling provisions, including a plan to enforce Enron electricity contracts at the expense of ratepayers in Snohomish County and subsidies for polluting industries, plagued the House and Senate bills, which were still being negotiated yesterday.

The bill has appeal for political leaders, because they want to be seen as reacting to gasoline price increases. Some redeeming features in the Senate version of the bill, including support for alternative energy sources and a provision freeing ratepayers in Snohomish and elsewhere of Enron contracts negotiated during the West Coast energy crisis, helped draw supporting votes from Washington Sens. Maria Cantwell and Patty Murray. Any compromise of the help against Enron for ratepayers ought to be considered a fatal flaw.

As President Bush and Congress push toward action, the public should be on guard. We will continue paying extra to oil companies at the pump for a long time. Help from the energy bill is an extremely dubious prospect.
(26 July 2005)

Bush proposal calls for drilling offshore
BRISTOL BAY: Proposal would require federal lease sale there.

Liz Ruskin, Anchorage Daily News

WASHINGTON -- The Bush administration has proposed to end the federal freeze on oil development offshore of Alaska's Bristol Bay, home of the world's largest red salmon fishery. The White House proposal, a suggested addition to the pending national energy bill, would require a federal lease sale in Bristol Bay, as well as others in the Gulf of Mexico.

The specific proposal, which also includes a revenue-sharing plan with the states, was dead on arrival in Congress last week, where House and Senate negotiators are in the final stages of working on the energy bill, said Chuck Kleeschulte, an aide to Sen. Lisa Murkowski, R-Alaska. Murkowski is on the bill negotiating committee. Kleeschulte characterized the idea as a trial balloon floated by the White House officials.
(26 July 2005)

Bill Wouldn't Wean U.S. Off Oil Imports, Analysts Say

Justin Blum, Washington Post

Despite repeated calls by President Bush and members of Congress to decrease U.S. dependence on oil imports, a major energy bill that appears headed for passage this week would not significantly reduce the country's need for foreign oil, according to analysts and interest groups.

The United States imports 58 percent of the oil it consumes. Federal officials project that by 2025, the country will have to import 68 percent of its oil to meet demand. At best, analysts say, the energy legislation would slightly slow that rate of growth of dependence.

"We'll be dependent on the global market for more than half our oil for as long as we're using oil, and the energy bill isn't going to change that," said Ben Lieberman, who follows energy issues for the conservative Heritage Foundation in Washington. "There's a few measures to increase domestic production . . . and that would not do much."
(26 July 2005)

Lawmakers Reach a Deal on New Energy Policies

Carl Hulse and Michael Janofsky

The mammoth energy measure, hammered together during a final nine-hour negotiating session that went into the early morning hours today, also gives the government new power to ease growing imports of liquefied natural gas and takes a swipe at a bid by China to acquire an American oil company.

"This balanced bill will lower energy prices for consumers, spur our economy, create hundreds of thousands of jobs and take unprecedented steps to promote greater energy conservation and efficiency," said Representative Joe Barton, Republican of Texas and chairman of the House Energy and Commerce Committee.

But some lawmakers and other critics say the bill is a wrongheaded giveaway to energy companies at a time of huge profits and represents a monumental missed opportunity by failing to take serious steps to reduce the nation's reliance on oil imported from the globe's trouble spots. "This bill is simply a failure," said Representative Henry A. Waxman, Democrat of California and a senior member of the energy committee. "It is a huge waste of money."
(26 July 2005)

The energy bill's effect on [California]

Staff, SF Chronicle

House and Senate lawmakers reached a deal early Tuesday on an energy bill, which is likely to be approved by both chambers this week and signed into law by President Bush. Here are some of the key provisions that would affect California:
(27 July 2005)

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