Politics and economics headlines - 10 September
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Politics and Economics
Let a hundred reactors bloom
Todd Crowell, Asia Times
Not far from the fabled Silk Road city of Dunhuang in northwestern Gansu province, Chinese scientists are drilling boreholes deep into the Beishan Mountains. It is here that China expects to permanently store the radioactive wastes that are accumulating from its rapidly expanding nuclear power industry.
In the next few weeks - before the end of the year certainly - Beijing is expected to make a decision on who will get contracts to provide reactors for four new nuclear power plants being built along China's coast, two at Sanmen in Zhejiang province and two others at Yangjiang in Guangdong province.
Everyone in the nuclear power industry from Moscow to Pittsburgh is watching this deal closely. The four new plants are likely to be only the first installments of a wave of new nuclear power plant construction, which is likely to see as many as 30 new plants constructed in China by 2020. Currently, China gets only about 2.5% of its electricity from nuclear power - compared with about 30% in Japan.
Explosive economic growth has made China probably the most power-hungry nation on earth. The burning of coal, China's most abundant fuel, has polluted the air in many of China's cities and contributes to the buildup of greenhouse gases. That, plus concerns about petroleum depletion over time and the need for energy independence, lead logically to an increased reliance on nuclear power.
(9 September 2005)
CNOOC Chief Economist Predicts $90 Oil
Erik Dahl, Interfax-China via Resource Investor
SHANGHAI (Interfax-China) -- Oil will peak at $90 per barrel by March of next year, CNOOC Dep. Chief Economist Zhang Weiping said at conference discussing China's energy needs in Beijing on Monday. Zhang also expected global oil production to peak at 94-100 mb/day during the next five years.
"High oil prices will have adverse affects on China's economy," said Zhang.
China's expenditure on oil imports could reach or even exceed $60 billion on oil imports this year, up from $40 billion in 2004, putting "high pressure" on China, said Xia Yishan, Senior Research Fellow at the China Institute of International Studies.
...Growth of energy demand in China has outstripped GDP growth since 2003 and will face sustained energy shortages if this continues, said Zhou Dadi, Director General of the Energy Research Institute at the conference.
Energy has been put under pressure from both rapidly increasing demand and dismally low efficiency.
For each unit of GDP, China uses three times more energy than the United States and five times more than Germany and Japan. This is due to a lack of economies of scale, an over reliance on high-energy industry and outdated production technology, according to Dr. Bernhard Hartmann, a Vice President at AT Kearney.
(6 September 2005)
Nicaragua Rations Energy
Prensa Latina (Cuba)
Managua - The National Transmission Company reported Thursday that starting next Monday it would start rationing energy in Nicaragua.
The company´s Executive President Humberto Salvo told the press the country lacks funds to buy energy from other nations in the area.
Salvo said if the Spanish distributor Union FENOSA does not pay the more than 24 million dollars they owe to generating companies, the latter ones would stop their equipment.
He added that planned rationing would be of two hours per circuit, from 21:00 to 22:00 local time.
The energy crisis worsened when the Supreme Court Justice rejected an increase in the service of 5.98 percent authorized by FENOSA.
Consumer defense organizations have pressured the government and National Assembly to avoid the cost increase of kilowatt-hour.
(7 September 2005)
I could find no US media covering this story. The Nicaraguan La Prensa has another article (in Spanish) online. Thanks to rider at peakoil-dot-com for the tip. -BA
Oil release may not cut petrol prices
Carl Mortished, London times
Fears are mounting that Europe and America face a long period of high petrol prices after it was revealed that a release of emergency fuel stocks would contain only small quantities of petrol, insufficient to make up the supply shortfall caused by Hurricane Katrina.
The International Energy Agency (IEA) disclosed yesterday that a planned release over one month of 2.1 million barrels a day of oil products from the emergency stocks of its member countries would include only 369,000 barrels of petrol. The total amount of extra petrol that the IEA is offering the market, worth about 11 million barrels, is little more than America consumes in one day.
...The average US pump price, which hit $3.07 a gallon last week, is within a whisker of its record high in 1981 of $3.11, adjusted for inflation. The US Energy Information Administration said that American winter heating bills would jump this year by about 71 per cent and energy costs would take a larger share of the US economy than at any time for two decades. It predicted that crude prices would remain above $62 into next year.
(8 September 2005)
UK fuel protesters threaten to mount refinery blockade
Thomas Catan, Financial Times
The organisers of a protest against the cost of fuel that caused chaos across Britain five years ago threatened to act again as petrol prices broke the £1 a litre barrier in some parts of the country.
Andrew Spence of the Fuel Lobby said the group would call for blockades of oil refineries next Wednesday if the government did not cut tax on fuel.
“We want to see an immediate reduction in taxation to bring fuel prices down or as of 6am next Wednesday there won’t be a refinery in the country left open,” Mr Spence said. He claimed that 26 transport companies had already promised to help.
(7 September 2005)
CIBC World Markets Predicts $100 Per Barrel Oil Within Years
Tara Zachariah, Dow Jones via Schlumberger
TORONTO - CIBC World Markets has raised its forecast for oil prices (West Texas Intermediate) for next year to $84 a barrel from $65 a barrel.
In a news release, CIBC World Markets said it expects to see $100 a barrel of oil "sooner rather than later." A study released on Thursday predicts that oil prices will average $93 a barrel in 2007, with prices expected to reach or exceed $100 a barrel by the fourth quarter of that year.
...It pointed out that world oil demand is less price-sensitive than was earlier assumed, requiring larger than originally anticipated price increases to rein in future demand growth. The study links the declining sensitivity of world oil demand to price and to the growing importance of Chinese energy consumption, it said.
(8 September 2005)
Germany`s energy future enters campaign
Stefan Nicola, UPI via Monster and Critics
KEHL AM RHEIN, Germany - Energy is the hot topic in German politics as oil and gas prices are shooting through the roof. Less than two weeks before the country heads to the polls to choose a new government, the oil shortage has fueled the campaigns.
...The last debate in federal parliament on Wednesday between Schroeder and CDU rival Angela Merkel also circled, among other topics, around Germany`s energy future.
'The catastrophe in the United States shows once again that we have to become less dependent on oil,' Schroeder said. The current oil prices are 'a serious threat to Germany`s economy,' he said, adding he would pursue a Group of Eight initiative for more transparency in the oil market.
...Merkel said her energy policy will take into account market fluctuations and focus on efficiency rather than pure ecological benefits.
Manfred Fischedick heads the Future Energy and Mobility Structures research group at the Wuppertal Institute, which researches sustainability. He said becoming less dependent on oil and pursuing a mix of different energy sources is Germany`s most reasonable energy future.
'We need to increase our international networks when it comes to energy security,' he said. 'Thinkable for the future could be solar power plants in Portugal or North Africa that deliver electricity to Germany.'
He said energy-saving measures can be advocated by the government without consumers having to alter their way of life.
(8 September 2005)
Russia and oil: too much money?
Kevin O'flynn, Newsweek
Rising oil prices have filled Russia's coffers with cash. What to do with the windfall? Some want to save it for a rainy day, others to spend it-and still others to steal it.
The cliched view of Russia is of a poverty-stricken giant swaggering around with a gold watch on its wrist. The gold, of course, is black. As the world's second largest oil producer, after Saudi Arabia, Russia sits atop a huge and fast-growing pool of natural riches. With prices hitting new records almost daily-$70 a barrel last week-the Kremlin is presented with that thorniest of questions: what to do with all the money?
Oil has transformed Russia, or at least Moscow. From its zooming stock market to the new plethora of glitzy restaurants and advertising billboards, evidence of boom times abounds.
...Corruption is clearly worsening. ... Politically, there appears to be an inverse correlation between the price of oil and democracy, according to former deputy prime minister Boris Nemtsov.
...As for ordinary Russians, few expect to see much benefit to themselves. "In Russia now, it's common to think that oil profits will be stolen and shared among bureaucrats," says Irina Pavlilova at the Levada polling center. Never mind that polls show that 69 percent of Russians believe the new oil wealth should be spent on social programs, or that President Vladimir Putin is expected to announce $4 billion worth of new social expenditures later this month. In today's Russia, oil has brought wealth-but only to a relative few.
(12 September 2005 issue)