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Other Energy Headlines - 12 August, 2005


Chinese gasoline stations jammed as fuel crisis deepens

Dennis Ng, The Standard ("China's Business Paper")
An increasingly acute fuel shortage in southern China is reaching crisis proportions, with long lines of trucks and cars at filling stations throughout Shenzhen and other areas.

Recent news reports in Guangdong said many filling stations in the fast- growing province have run low on fuel because of Typhoon Haitang, which hit Taiwan in the middle of last month and kept many oil tankers out of harbor.

Some reports said mainland firms are balking at supplying the domestic market because it is unprofitable. Other reports said some filling stations are withholding retail supplies out of fear that wholesalers will be unable to deliver to them in the near future.

Both truck and car drivers reported having to go from one filling station to another and facing long lines to find fuel. Because prices of gasoline are so much lower in Shenzhen and other areas over the border, Hong Kong drivers often go over the border to fill up.
(12 August 2005)


Ghana has 350 Million dollar energy funding gap

GNA, GhanaWeb
Ghana has appealed to her international partners for support to meet a 350 million-dollar gap in her energy funding requirement.

So far, India has put forward 15 million dollars in equipment and materials for energy generation.
(11 August 2005)


Indian Official: Assam oil production 'critical'

Wasbir Hussain, Associated Press Via Business Week
Suspected rebels launched renewed attacks overnight on pipelines in eastern India, leaving oil operations in the remote region in critical shape, a top oil official said Monday. The explosions came hours after bombings shook a crowded market and crippled two oil pipelines elsewhere in the area in apparent terror attacks ahead of India's Aug. 15 Independence Day. Oil officials gathered Monday in New Delhi to review the security situation in the region.

"Our production is on, but our storage capacity is going down, and our operations are turning critical," G.K. Talukdar, the head of state-owned Oil India Limited's operations in the eastern state of Assam told The Associated Press by telephone from Duliajan, 550 kilometers (380 miles) east of Gauhati.
Late Sunday night, a crude oil pipeline was blown up in a small village outside of Duliajan, while a natural gas pipeline, which had been feeding an electricity power plant, was blown up in another nearby village, Bokuloni.
At least four people were killed and more than a dozen injured in the explosions earlier Sunday, which included attacks on a crowded market, an army post, and explosion at a telephone exchange, power transformers and oil and gas installations. ...
(8 August 2005)


Explosion at BP plant near Alvin comes on heels of Texas City closing

Houston Chronicle
BP Amoco firefighters are battling a blaze that broke out tonight after an explosion inside a chemical plant in Brazoria County. There were no initial reports of injuries from the explosion about 9:15 p.m. at the BP Amoco Chocolate Bayou plant on FM 2004 near Alvin, officials said. ...

Earlier today it was announced that the unit at BP's Texas City refinery that sprung a leak this morning, leading to the second shelter-in-place in less than two weeks, will be indefinitely out of service until officials complete a full inspection, officials said. The unit joins two other shuttered parts of the refinery that operate under high pressure.

One of those units, the ultracracker, was down for maintenance when the deadly March 23 blast occurred and never came back on line, BP officials said. The second unit was the one that exploded on July 28, causing no injuries. The latest incident occurred at 1 a.m. today on the gas oil hydrotreater, releasing 100 barrels of gas oil and 100 pounds of hydrogen sulfide into the air. Prevailing winds were out of the south and thus carried the plume of smoke toward Texas City.

"It was an obvious vapor going into the city," said Bruce Clawson, the city's emergency management coordinator, who instituted the shelter-in-place at 1:14 a.m.
protocol.
(10 August 2005)


The only way is up for oil prices, but the world will not run out in the near future

Rosemary Righter, Times Online
OIL prices eased back slightly below the record $63 mark yesterday, but few traders expect this to be more than a temporary reprieve, attributable to profit-taking in a buoyant market rather than any change in the fundamentals that are pushing up prices.
What are these fundamentals? Basically it boils down to three factors. The first is that oil companies are struggling to meet heavy demand, not only from oil-short China but from the United States, with refinery capacity problems. The Organisation of Petroleum Exporting Countries is being co-operative.

Yesterday OPEC increased production by 300,000 barrels a day, bringing its total daily output to 30.4 million barrels, well above its officially agreed ceiling of 28.5mbd but not enough to make a significant difference to the supply and demand equation. The second factor is political uncertainties, centred on warnings of a higher risk of terrorist attacks in Saudi Arabia, the world’s biggest exporter. ...
(10 August 2005)


Are record oil prices leading to exploitation of oil shales?

John Vidal, Guardian
Not yet. Oil companies work the easiest and cheapest fields first and high prices encourage them to drill where it is usually only marginally profitable. Because oilfields are seldom fully exploited before companies move on, the price increases are expected to prolong the life of some fields, bring forward the opening of new ones and encourage companies to reopen others - if the present record prices are maintained.

Even companies making billions of dollars in profits a year are not yet committing themselves to exploiting the world's vast quantities of "unconventional" oils - especially the hydrocarbon deposits found up to 200ft deep in oil shales and sands. Australia, Canada and especially Utah, western Colorado and Wyoming in the US between them are thought to have several trillion barrels of recoverable oil trapped in these rocks. The US is believed to have more than 60% of the world's resource.

However, the environmental damage and energy needed to mine and then extract the oil from shales is immense. The industry, led by Occidental and Amoco, remembers that it invested billions of dollars in unconventional oils after prices soared in the 1970s then got badly burned when the price crashed in the 1980s.

The present oil "spike" could be different, however, because of a combination of the world's changing geopolitics and the heavy new demand for oil by China and other developing countries.
(11 August 2005)


Electrical Inefficiency A Dark Spot for China
Cities Glow for Show as Factories Black Out

Peter S. Goodman, Washington Post
... China has become among the world's most wasteful users of power, its growth in demand exacerbated by its striking inefficiency, say energy analysts and economists.

"A lot of China's energy security problem could be solved if you improved our domestic efficiency," said Yan Maosong, an industrial engineering expert at Shanghai University who advises the central government. "From generation to transmission to power usage, in every link of the chain, our energy industry is not very efficient. Top government leaders have not paid enough attention."

By the government's own reckoning, China's economic growth is absorbing energy at a higher rate than many large economies. To produce $1 million in gross domestic product, China needs 2 1/2 times as much energy as the United States, five times that of the European Union, and nearly nine times that of Japan, according to the state Energy Research Institute.
(9 August 2005)


Shell Canada Oil Sands Expansion Costs Jump 83%

Mike Milliken, Green Car Congress
Bloomberg. Shell Canada has increased its estimated cost for expanding its Athabasca Oil Sands Project production to 300,000 barrels a day from the current 200,000 by 83%-from C$4 billion (US$3.3 billion) to C$7.3 billion (US$6 billion).
(10 August 2005)


U.S.: Pricier Oil Won't Send The Economy Into A Skid
But given a stronger dollar and tighter money, it may rattle corporate nerves

James C. Cooper & Kathleen Madigan, Business Week
The U.S. expansion has shown it can tolerate $50 oil with hardly a hesitation. But how will it handle $60 oil when the Federal Reserve has more than tripled short-term interest rates over the past year, signs of corporate jitters have resurfaced, and the dollar has rallied, making exports once again more expensive on global markets?
(11 July 2005)


More fuel for airlines' woes

Brad Foss, The Associated Press via Seattle Times
WASHINGTON — Lost luggage, bad weather and now ... no fuel?
While fliers haven't yet had to add that problem to the headaches associated with air travel, it may not be far away. Airports in Arizona, California, Florida and Nevada recently came within a few days — and at times within hours — of running out of jet fuel.

Because of supply bottlenecks, airlines were forced to fly in fuel from other markets and scramble for deliveries by truck. But these are expensive, short-term fixes that do not address what airline executives consider the underlying problem:
With passenger traffic rising above pre-9/11 levels, the nation's aviation business is slowly outgrowing the infrastructure that fuels it.

What started as routine supply tightness in these markets quickly snowballed after events that included a hurricane, a canceled fuel shipment and, ironically, the airlines' own efforts to prevent shortages, according to several executives.
(11 August 2005)

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