Politics & economics - Nov 28
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Many more articles are available through the Energy Bulletin homepage
What your Mama never told you about NAFTA
A look at Canada’s oil, Chapter 11 and how it affects you
Signy Holmes, Staff, The Manitoban Online (Univ of Manitoba student newspaper)
...What came with NAFTA and the FTA (a Canada-U.S. free trade agreement) was the obligation to sell over 60 per cent of the fuel produced in Canada to America. Our oil prices are also tied to theirs — we are unable to charge Americans a different price for our oil than we charge Canadians. We have surpassed Saudi Arabia to become America’s main supplier, but we exert nowhere near the influence over oil prices that OPEC countries do.
Saudi Arabia and Venezuela, along with other oil exporting countries, give their own citizens a better price for oil and gas than they charge for export. The fact that we are unable to do the same started to become a nuisance around the time gasoline prices first pushed over the dollar mark.
The great American energy drain could pose an even greater problem in the future. “Peak oil,” the point at which the demand for fossil fuels such as oil is greater than the capacity to produce it, is a growing concern, both nationally and globally. The United States — having reached this point with domestic production in the 1970s — is currently the world’s largest net oil importer.
So what will happen when Canada reaches this point? We will still owe the Americans over 60 per cent of our oil production, even if we need that oil for ourselves. Canada could be forced into a shortage situation even if we were producing enough oil to meet our needs, simply because of agreements signed by past governments.
(26 November 2005)
Russia pressing for world energy market transparency
RIA Novosti (Russian news and information agency)
NEW DELHI - Russia views a transparent and predictable global oil and gas market as the foundation of global energy security, the Russian minister of industry and energy said Friday.
"We do not conceal information about [our] plans to develop the energy sector, the volumes and regions of production, and our other activities that can affect the global and regional energy situation," Viktor Khristenko told an energy conference in New Delhi.
The minister added that Russia, which is one of the world's biggest energy suppliers outside the troubled Middle East, did not indulge in intrigue and wanted the same from its partners.
Khristenko said energy security was the main problem Russia wanted to tackle during its presidency next year of the G8, the club of the world's richest nations. He also said that the G8 could not ensure global security without proactive interaction with major Asian energy producers and exporters.
"Therefore, we propose setting up permanent task forces under the G8, which will include representatives of energy supplier and consumer countries, first of all Asian ones," Khristenko said.
(25 November 2005)
Chile's Bachelet says greens back her energy plan
Fiona Ortiz, Reuters via Alertnet
SANTIAGO, Chile - Leading presidential contender Michelle Bachelet said on Saturday she has the endorsement of Chile's biggest environmental groups for her energy and mining policies including creating a minister of the environment.
Bachelet, seen as a fiscal conservative with liberal social policies, pledged to make 15 percent of the country's energy come from renewable resources by 2010.
...Chile's energy needs are surging at a pace of about 7 percent a year, outpacing economic growth, which could come in about 6 percent this year. Chile has tiny oil reserves and imports almost all its fossil fuel needs.
Bachelet said her government would work with environmentalists to develop small wind and solar energy projects in different parts of the country.
"During my government I'm not going to develop nuclear energy," she said. President Ricardo Lagos, Bachelet's socialist party mate, has proposed exploring nuclear alternatives.
Bachelet said that by 2009 Chile would have a regasification plant to import liquid natural gas and that she would push for a natural gas ring that would connect Chile, Argentina and other countries to the rich natural gas fields in Peru and Bolivia.
(26 November 2005)
Labour to ease pollution rules if gas runs short
Heather Stewart, UK Observer
Industry has been promised that the government will be 'flexible' about enforcing environmental rules on firms forced to switch to dirty fuels this winter if their gas is cut off.
...Tony Juniper, executive director of Friends of the Earth, said: 'Instead of encouraging industry to think environmental standards are flexible, the government should be helping businesses to save energy.'
With predictions of a cold winter, and gas prices at record highs, industry has repeatedly warned that users could run short. The 'spot' price of gas - the price for immediate delivery - doubled last week.
(27 November 2005)
Crude designs: the rip-off of Iraq's oil wealth
Greg Muttitt, Znet
[This is the executive summary of a November 2005 report sponsored by PLATFORM with Global Policy Forum, Institute for Policy Studies (New Internationalism Project), New Economics Foundation, Oil Change International and War on Want. The full text of the report is available in pdf and html.]
While the Iraqi people struggle to define their future amid political chaos and violence, the fate of their most valuable economic asset, oil, is being decided behind closed doors.
This report reveals how an oil policy with origins in the US State Department is on course to be adopted in Iraq, soon after the December elections, with no public debate and at enormous potential cost. The policy allocates the majority of Iraq's oilfields -- accounting for at least 64% of the country's oil reserves -- for development by multinational oil companies.
Iraqi public opinion is strongly opposed to handing control over oil development to foreign companies. But with the active involvement of the US and British governments a group of powerful Iraqi politicians and technocrats is pushing for a system of long term contracts with foreign oil companies which will be beyond the reach of Iraqi courts, public scrutiny or democratic control.
(27 November 2005)
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High fuel costs projected to slash farm incomes
Roxana Hegeman, Associated Press via the Witchita Eagle
WICHITA, Kan. - High costs for fertilizer, fuel and irrigation are expected to take a heavy toll on Kansas farmers next year, with agricultural economists projecting net incomes to plummet nearly 37 percent from 2004 for dryland farms across the state.
The forecast is even more grim for irrigated crop farms, where high energy costs to pump water are expected to cut net farm incomes by nearly 91 percent in 2006, a study shows.
"This is a dire situation facing production agriculture," said Dusti Fritz, chief executive officer for the Kansas Wheat Commission. "Where production agriculture is unique is that producers cannot pass on these additional costs they are seeing in their inputs to anybody else."
Kansas State University economists worked up the projections on Oct. 31 to show lawmakers in Washington, D.C., the magnitude of the impact of high energy costs on agriculture as more farm states clamor for an emergency farm energy assistance package. The university's forecast is based on farms in the Kansas Farm Management Association, typically the state's larger, full-time operations.
(25 November 2005)
Finding new ways to fuel the farm
Mikkel Pates, Grand Forks Herald
FARGO - Should the United States ditch the commodity export business and shift all of its surplus corn and soybeans into the production of biofuels?
That was just one of the widely varying ideas put on the table at the second and final day of an ag summit in Fargo on Monday. The summit, titled "21st Century Farm Policy," was sponsored by North Dakota State University and Sen. Kent Conrad, D-N.D.
Some of the more provocative ideas came from Rep. Collin Peterson, D-Minn. Peterson is the ranking Democrat in the House Agriculture Committee, who could become chairman if the Democrats retake the House of Representatives in 2006.
...Peterson said exports aren't the "nirvana" for farmers that they've been promised.
"Given all the trouble we have with the WTO, all the trouble with the budget, maybe what we ought to be thinking about is not trying to stop exports or necessarily give up, but shift our thinking," Peterson said. "Maybe we ought to take all of the corn and soybeans we now export, and maybe our goal ought to be that instead of exporting those bushels we should make them into fuel."
(2 November 2005)
Oil-rich Venezuela covets nuclear power
Larry Rohter and Juan Forero, NY Times via IHT
BRASÍLIA With his country sitting on top of some of the world's largest oil and gas reserves, and with his constant talk of socialist revolution and criticism of the Bush administration, President Hugo Chávez of Venezuela has acquired a certain notoriety in Washington and with some of his Latin American neighbors.
But he has seldom sent eyebrows so high as when he recently announced plans to start a nuclear energy program with the help of Brazil and Argentina. Coupled with his talk of a spending binge on weapons like rifles, ships and combat aircraft, and his support of Iran's right to develop a nuclear program, his moves have set off a debate about his motives.
Chávez and his government dismiss the concerns, saying the world should worry less about what is happening in Caracas than in Washington.
"It cannot be that the countries that have developed nuclear energy prohibit those of the third world from developing it," Chávez argued recently in an interview with a Brazilian newspaper. "We are not the ones developing atomic bombs, it's others who do that."
...Chávez first broached the subject of nuclear power in May, saying that he was interested in starting negotiations with Iran to diversify Venezuela's energy supplies. He returned to the theme early in October, but this time named Brazil and Argentina as his preferred partners.
(27 November 2005)