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Next steps on energy
Editorial, NY Times
… The real question is not whether Mr. Bush’s proposals are going to make life difficult for some people but whether they are tough and adventurous enough. The answer is plainly no. All the president has done is to give prominence to ideas about alternative fuels and new technologies that were mere afterthoughts in the 2001 Cheney energy report. This is progress of a sort; at least we are no longer talking about drilling our way out of dependency.
Yet his actual budget proposals were pitiful. The $150 million the White House said it would commit to making biofuels more competitive, for instance, turns out to be $50 million less than the amount authorized by last year’s energy bill. And while the president talks about a new generation of vehicles, he offers virtually nothing meaningful to help Detroit get there.
These little gaps have been widely noted. But the biggest shortcoming is the total absence of a program that would deliver any of these dandy new technologies to the marketplace. By program we mean a uniform set of incentives – what the economists call market signals – that would drive American industry to build the more fuel-efficient vehicles and the cleaner power plants that we need.
(6 February 2006)
The end of denial on oil imports (Portland Oregonian)
Our Addiction by James Howard Kunstler
This 12-Step Program Can Break U.S. Oil (Madison Capital Times, Wisconsin)
Roundup of articles on the SOTU (Gristmill)
Cuba invites American oil companies to invest and to fight trade embargo
Julie Watson, Associated Press via Sun-Sentintenl (Florida)
MEXICO CITY · Cuban officials invited U.S. corporations Friday to lobby against the U.S. trade embargo and invest in the communist nation’s energy sector, as they announced plans to double their drilling capacity and explore for oil in the island’s Caribbean waters.
In the first private-sector oil summit between the two countries, executives from U.S. giants like ExxonMobil Corp., Caterpillar Inc. and Valero Energy Corp. were meeting with Cuban government officials in Mexico City this week to learn about Cuba’s potentially lucrative oil reserves.
“We would be happy if North American companies also participated in future projects,” said Raul Perez de Prado, Cuba’s vice minister of basic industry.
(4 February 2006)
Stranger and stranger… More at Marxmail.
Ukraine Gas Deal Draws Attention to Secretive Importer
A.E.Kramer, New York Times
MOSCOW – Four weeks after Ukraine cut a deal to import natural gas through RosUkrEnergo, a shell entity based in Switzerland, the obscure company is facing an uncomfortable amount of attention.
After becoming one of Europe’s biggest energy traders overnight with the Ukraine deal, the company promised changes to become more open about its operations. Gazprom, the Russian gas giant, owns half of the company; its other owners have not been disclosed. The plush terms the company has received in the past from Gazprom are also a matter of much speculation.
RosUkrEnergo’s secretive nature has driven the Parliaments of both Ukraine and Russia to open investigations; meanwhile, Russian journalists have tried to untangle the skein of shell companies and subsidiaries in the ownership structure. …
“We have an image problem,” Wolfgang Putschek, a member of the board of RosUkrEnergo said. Mr. Putschek represents the unnamed investors on the board.
(31 January 2006)
High Profits, Sluggish Investments
Floyd Norris, New York Times Select
As oil company earnings soar, there is talk of excess profits and a new windfall profits tax. The real issue, though, is not how much the oil companies are making, but what they are doing with the money. In too many cases, they seem to have only a limited interest in investing it in projects that might help prevent or ameliorate a new energy crisis. …
I checked back to 1976, and found that until 1997, Exxon always invested more than it made. Now it invests less than half of profits.
One way to monitor what Exxon Mobil does with its money is to compare the amount it distributes to shareholders, via share repurchases and dividends, with the amount it invests in capital spending, exploration and research and development.
A decade ago, Exxon invested more than $2 for every dollar it distributed to shareholders. Last year the figure was 70 cents.
In 2005, it reduced the number of shares outstanding by 4 percent.
There is a phrase for that strategy: gradual liquidation. It is an excellent strategy for a company in a declining industry with few investment opportunities. Let us hope that is not the case here. …
(3 February 2006)
Full article is subscriber only, above are most of the best of it.
British fuel rationing threatens U.S.-London flights
Barbara De Lollis, USA Today
U.S. airlines are chafing under the added costs of a jet fuel shortage at London Heathrow airport, and travelers to Great Britain may face fewer flight options as a result.
James May, head of the U.S. airline trade group Air Transport Association, said Thursday that No. 2 United Airlines has delayed introduction of a second daily flight from Los Angeles to Heathrow because of fuel issues. Further, May says, United and No. 1 American, the other U.S. airline to fly to Heathrow, may need to curtail service. “There could be very serious disruptions” in the not-too-distant future, May says.
A Dec. 11 explosion and fire at Buncefield, one of Britain’s biggest fuel depots, has reduced jet fuel supplies to Heathrow. Buncefield normally supplies 30% of the fuel sold at Heathrow, the world’s busiest international airport. In response to the supply disruption, privately held airport operator BAA imposed rationing rules that U.S. carriers and the U.S. government call unfair. BAA officials couldn’t be reached Thursday. …
(4 February 2006)
Smart meters slash power bills
Wendy Frew, Sydney Morning Herald
“SMART” electricity meters in Sydney homes have cut many power bills by between 10 and 30 per cent – but heavy users, such as people with air-conditioners, are now paying dearly for their drain on the system, EnergyAustralia says.
The energy supplier has installed more than 200,000 new meters across its network since mid-2004, and 25,000 of those customers are being billed for time-of-use. This system is based on how much electricity they use in peak, shoulder and off-peak pricing periods, as opposed to a flat tariff. ..
(28 January 2006)