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EIA: US Oil Demand Growth Has Picked Up From Sluggish 1Q

Masood Farivar, Schlumberger
NEW YORK – U.S. oil demand growth has recovered from the sluggish rate of the first quarter and is on track to show growth the rest of the year, an analyst at the federal Energy Information Administration said Wednesday.

The comments clarify the EIA’s interpretation of weekly data released Wednesday showing U.S. oil demand has actually contracted so far this year, falling 0.2% to 20.6 million barrels a day. Markets are closely watching such data, as strong demand has been the main driver of oil’s long rally to record highs above $60 a barrel.

“Most of the reason demand growth seems to be lower than usual relates to weak first-quarter demand for distillate fuels, and that’s related to relatively warm weather,” said Doug MacIntyre, analyst at the EIA, the statistics arm of the U.S. Department of Energy. “Demand growth since seems to have picked up some for diesel fuel and gasoline.”
(27 July 2005)

Energy Officials are Seeing an Upward Trend for Power Use

Nancy Luna, The Orange County Register via ENN
Consumers are power hungry in Orange County and across California.
We use four times more electricity per person than Brazil by indulging in energy-sucking products such as plasma TVs, computers, air-conditioning systems, stereos, spare refrigerators and spas.

“We’re more device-oriented than ever,” said Scott Samuelsen, head of the Advanced Power and Energy Program at UC Irvine.

Few people, especially among the gadget-oriented generations, stop and ask: How much do I use? Am I wasting any?

Maybe more would if they considered the numbers: During the 2001 energy crisis, Californians stepped up and saved about 3,000 megawatts on hot summer days. That’s enough to power nearly 2.3 million homes for a day, according to the California Independent System Operator, or Cal-ISO, which controls 75 percent of the state power grid.

But electricity consumption is ratcheting up again, while conservation efforts appear to be sliding, energy officials say. Last summer, for example, California used so much power during critical afternoon hours that the state broke the five-year-old record for peak demand use seven times.
(28 July 2005)

Beating the Summer Weather, With Sweaters
When Air Conditioning Is Too Much for Some, Thermostat Wars Ensue

Mark Chediak, Washington Post
With the temperature soaring yesterday, Valencia Taylor turned on the space heater in her office at FedEx Field.

“It’s always cold in here,” said Taylor, a marketing executive for the Washington Redskins. “But I’m cold natured.” Other workers don’t seem to mind the arctic air and often joke about Taylor’s space heater, she said. “A lot of people say, ‘You just need meat on your bones.’ “

In many offices across the region, the battle over the office thermostat is raging. One shivering employee will call for the air conditioning to be turned down while the person in the next cubical demands cooler air.
(28 July 2005)

Ensuring reliable power now and in the future

Steve Reynolds, Seattle Times (guest columnist)
Our economy just keeps changing.

Twenty-five years ago, forest products and airplanes created most of the jobs and very few of us had heard of computer software. Today, Microsoft has surpassed many older companies as a linchpin to the state’s economy.

But one thing that hasn’t changed is the role that plentiful, reliable and affordable energy plays in the region’s economy. It was key in the past, is critical today, and will be even more so in the future.

…We have to make some tough choices about where we’ll get the power for the next generation. And these choices may well determine the economic future of our region.

It would be the best of all worlds if conservation and renewable options like wind power could fill the gap until fuel cells and other new environmentally friendly technologies reach commercial viability. That would be nice, but it’s wishful thinking. PSE believes – and has invested heavily – in both conservation and renewable sources like wind energy, but our experience has taught us that these options can’t come close to filling the projected energy gap by themselves.

Over the next two decades, our region’s power needs will grow by the equivalent of five cities the size of Seattle. We know the growth is coming. What we don’t know yet is where the additional energy will come from to support this growth, or which form of generation the region will embrace.

The only way to fill the resource gap is to pick from options that today many people find less desirable. Given our region’s history with nuclear power, discussion of that resource is generally a non-starter. The more likely options are natural-gas-fired plants, which currently are expensive to operate, or the new clean-technology coal plants that are under development elsewhere. Another way to help stabilize natural-gas-fired generating costs would be to develop a liquefied natural gas (LNG) port somewhere on the West Coast. This would allow the Northwest to utilize existing resources in Alaska and elsewhere that currently go unused.
Steve Reynolds is chairman, president and CEO of Puget Sound Energy, headquartered in Bellevue.
(29 July 2005)

Politics and Economics

Metropolitan Dubai and the Rise of Architectural Fantasy

George Katodrytis, Bidoun Magazine
… Dubai is a prototype of the new post-global city, which creates appetites rather than solves problems. It is represented as consumable, replaceable, disposable and short-lived. Dubai is addicted to the promise of the new: It gives rise to an ephemeral quality, a culture of the “instantaneous.” Relying on strong media campaigns, new satellite cities and mega-projects are planned and announced almost weekly. This approach to building is focused exclusively on marketing and selling.

… Dubai began life as a small port and collection of barasti (palm frond) houses clustered around the Creek. Not endowed with abundant fertile land, early twentieth century settlers set about making their living from the sea, concentrating on fishing, pear-ling and trading. Commercial success coupled with the liberal attitudes of its rulers made the emirate attractive to traders from India and Iran, who began to settle in the growing town. This gave the city an early start before the explosion of wealth brought on by oil production in the late 1960s.

The trajectory of the development of Dubai is reflected in its population, which has grown fifteen-fold since 1969: from 60,000 then to well over 1 million today. It is projected that, by 2010, Dubai’s tourist trade will accommodate around 15 million tourists per annum, serviced by more than 400 hotels. Comparisons are telling: in 2002, Egypt, for example, had 4.7 million visitors, and Dubai 4.2 million. (The former, of course, hosts “real history,” against the latter’s Las Vegas version—including, in the next few years, the construction of a set of Pyramids in the vast theme park Dubailand.)

The emirate’s expansion has followed the Los Angeles model: New developments sprout in the desert, beyond the older cores of Deira and Bur Dubai, linked by freeways and ring roads. The open spaces left in between are gradually filled with a lower-intensity, car-dependent form of urban sprawl.

Since Dubai has no real urban history, it has had to invent a variety of new urban conditions. Using its transitory oil wealth, the emirate has built “free zone” areas, promoted as clusters defined by economic liberalization, technological innovation, and political transparency.
(Spring 2005)
This article was mentioned in the piece Sinister Paradise: Does the Road to the Future End at Dubai? by Mike Davis, to which we published a link in the July 17 Headlines. Author George Katodrytis wrote us with a copy of the article, pointing out that “The article gives a different and less sinister view of Dubai [than the article by Mike Davis], based on facts, and interprets the city’s unique development with its strengths and weaknesses.” In any case, both articles are fascinating.. -BA

What’s Up At Pemex?
Losses plague Mexico’s state oil company

Amalia Andrade, Business Mexico via Red Nova
Something is amiss at Petroleos Mexicanos. Despite being the world’s third-biggest oil producer – Pemex churned out a record 3.4 million barrels a day of crude last year amid high energy prices – the state company keeps racking up debt.
Pemex’s annual revenue also hit an all-time high in 2004, of US$69 billion, yet (as usual) the company reported a net loss.

Company officials say Pemex’s business model, not its management, is to blame for such disappointing numbers. Every year, the Mexican government claims 60 percent of Pemex sales for itself in royalties and taxes. That cash, in turn, covers about a third of the annual federal budget. Pemex then has to appeal back to the government for funds to cover maintenance, exploration and other expenses.

This cumbersome arrangement is the result of checks and balances installed since the country kicked private companies out of its oil industry in 1938 and declared that the black gold should benefit all Mexicans, rather than just oil executives. Pemex was founded to act as the overseer and guardian of this precious national treasure.

While noble in design, the system also has its flaws. For instance, the business structure hasn’t kept corrupt union and other officials from siphoning billions of dollars from the company and into their own pockets. Nor has Mexican law held these crooks accountable for their misdeeds…

Amalia Andrade is a freelance reporter who lives and works in Mexico City.
Copyright American Chamber of Commerce of Mexico A.C. Jul 2005

(July 2005)
While presented as a news story, this article is actually sponsored by the American Chamber of Commerce of Mexico, and thus has a particular slant. There’s nothing wrong with having an article having a point-of-view, but it should be clearly labeled as “Opinion”. -BA

Oil and Blood

Bob Herbert, NY Times (Op-ed columnist)
…You can run through all the wildly varying rationales for this war: the weapons of mass destruction (that were never found), the need to remove the unmitigated evil of Saddam (whom we had once cozied up to), the connection to Al Qaeda (which was bogus), and one of President Bush’s favorites, the need to fight the terrorists “over there” so we won’t have to fight them here at home.

All the rationales have to genuflect before “The Prize,” which was the title of Mr. Yergin’s Pulitzer-Prize-winning book.

It’s the oil, stupid.
(28 July 2005)