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Politics & economics - Feb 8

Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage


Cuba's oil bid angers U.S.

Eliza Barclay, Houston Chronicle
A move by Cuba to interest American energy companies in investing in the communist nation resulted in a quick rebuke by the U.S. government. ... The Americans were non-committal about the opportunities in Cuba if the embargo is ever lifted.

"We're just here gathering information," said Joseph Newhart, with Exxon Mobil Exploration's new venture special project's division.

Newhart said the presentations left many questions, including whether there is credible evidence backing the Cuban government's claim that there are big oil deposits offshore.
(4 Feb 2006)

Bush wants new fuels, but cuts energy-saving program
Reuters via New Kerala (India)

WASHINGTON: While President George W Bush kept his promise to put more money in his proposed 2007 budget for research to develop alternative energy sources, the administration also wants to cut a government program proven to save energy.

The Energy Department's budget would increase funding by millions of dollars for solar, wind, ethanol, hydrogen fuel and nuclear research to help fulfill Bush's pledge in his State of the Union speech to slash US oil imports from Middle East suppliers.

However, the department's budget would also cut 32 percent of the money for weatherization assistance grants, which help low-income families buy storm windows and insulation for their homes to make them more energy-efficient.
(7 February 2006)


Farmers try to limit pain of high fuel prices

Peter Harriman, Argus Leader (Sioux Falls, S. Dakota)
...Typically, fertilizer accounts for 30 percent of the cost of growing a corn crop, according to Guthmiller. It is the largest single cost. The next largest production input is seed, at 28 percent.

North American fertilizer production nosedived when hurricanes last fall flooded natural gas and petroleum wells and pipelines in the southeast and put a serious crimp in the flow of natural gas, which is needed to make fertilizer.

The interruption in natural gas supply drove up the price, according to Jeff Cleveland, agronomy manager for Farmer's Alliance, a Mitchell agricultural chemical dealer that also operates in Corsica, Ethan, Alexandria and Storla.

"A lot of production was shut down between Canada and the U.S. when natural gas got so high," Cleveland said. Fertilizer producers who had locked in gas at one price would sell it back to the companies from which they bought it, "make money and shut down production," he said.

While the fertilizer supply is recovering and should be adequate for farmers on the Northern Plains this year, Cleveland says the higher cost of making it because of the price spike in natural gas is being passed on to farmers.

That sends the pens of many South Dakota farmers flying across the backs of envelopes and other available paper with calculations that attempt to determine what makes the best financial sense in 2006: Spend more money planting high-yielding corn, or reduce production costs and plant lower-yielding soybeans?
(5 February 2006)


Budget doesn't allocate funds to build oil reserve

Reuters via CNMMoney
WASHINGTON - Congress is requiring the Bush administration to add almost 300 million barrels to the nation's emergency oil stockpile, but the White House on Monday did not seek money to buy the crude in its proposed budget for the 2007 spending year sent to Congress.

In sweeping energy legislation signed into law last year, Congress required the administration to boost capacity of the Strategic Petroleum Reserve to 1 billion barrels from its current 727 million barrels.

The stockpile was created by Congress in 1975 after the Arab oil embargo. It currently holds about 684 million barrels of crude in underground caverns at four sites in Texas and Louisiana.

The administration loaned 9.8 million barrels of crude to oil refineries and sold another 11 million barrels last autumn after Hurricane Katrina disrupted supplies.
(6 February 2006)


The Geopolitics of Natural Gas

Michael T. Klare, The Nation
In the high-stakes arena of energy geopolitics, natural gas is rapidly emerging as the next big prize. What oil was to the twentieth century, natural gas will be to the twenty-first.

...The United States is becoming increasingly dependent on natural gas. This country now relies on natural gas for approximately one-fourth of its total energy supply, more than from any source except oil. As a result, the economy has become more and more vulnerable to fluctuations in gas supply and pricing--a vulnerability that should be especially evident this winter as gas prices hit record levels, with painful effects on the poor. Natural gas provides approximately 14 percent of the energy used to generate electricity in this country, 45 percent of home heating fuel and 31 percent of the energy and petrochemicals consumed by agriculture and industry. Gas is also used as a feedstock for the manufacture of hydrogen, a promising new entrant in the race to develop alternative fuels.

The United States currently relies on North American supplies for most of its gas, but with those reserves being depleted at a rapid pace and few untapped fields available for exploitation, need for gas from other regions is growing and energy plants seek more gas from foreign suppliers like Qatar, Nigeria and Russia. As with oil, America could become heavily dependent on foreign suppliers for essential energy needs, a situation fraught with danger for national security. Many of America's key allies, including the NATO powers and Japan, are dependent on imports.

...Whether the benefits of cooperation in procuring natural gas will come to be seen as more appealing than the rewards from unilateral action remains to be seen. One thing is certain: The world's growing demand for natural gas will play an ever more significant role in shaping the relations between major supplying and consuming nations. The need for energy will increasingly set the agenda of the major powers, and natural gas--long in the shadow of petroleum--is about to claim center stage.
(4 January 2006)
A long analytical piece. Recommended by David Roberts at Gristmill

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