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Politics & energy - Feb 25

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

Many more articles are available through the Energy Bulletin homepage


Oil jumps after attempted attack on Saudi processing plant

Mark Shenk, Bloomberg
Crude oil jumped after Saudi Arabian forces repelled a suicide attack on the Abqaiq processing center, which handles about 7 percent of world supply.

At least two bombs exploded after shooting began outside the complex when guards stopped two cars at the gates, Interior Ministry spokesman Mansour al-Turki said in Riyadh. The occupants were killed and two of the guards were injured, he added. The state oil company, Saudi Aramco, said production and exports weren't affected.

``This forces us to focus on the worsening security situation in that part of the world,'' said Michael Fitzpatrick, vice president of energy risk management at Fimat USA Inc. in New York. A facility such as this is ``a very tempting target for any opponent of the regime.''
(24 February 2006)
UPDATE Feb 26
Many articles are online about this incident. Big Gav at Peak Energy has a page of links.


Shell told to pay Nigeria $1.5bn

BBC
A Nigerian court has ordered oil giant Shell's local operation to pay $1.5bn to the Ijaw people of the Delta region. The Ijaw have been fighting since 2000 for compensation for environmental degradation in the oil-rich region.

They took the case to court after Shell refused to make the payment ordered by Nigeria's parliament. Ijaw militants have staged a spate of attacks against Shell facilities recently and are holding seven foreign oil workers hostage.

Following the violence, Shell - the biggest oil producer in Nigeria - has halved its output from the country. Shell says it believes there is no evidence to support the claim, and will appeal against the ruling.

A statement said: "We remain committed to dialogue with the Ijaw people."
(24 February 2006)
Related: MSNBC.


Niger Delta crisis affecting crude oil prices and supplies to US, China, Japan and Europe

Joe De Capua, Voice of America
With the current hostage crisis in the Niger Delta and renewed threats by militants to attack more Nigerian oil facilities, crude oil prices have risen for a second time in a week. Analysts say there’s concern over disruption of Nigerian oil supplies, as well as lower oil production in Iran.

Julian Lee is the senior energy analyst at the Center for Global Energy Studies. From London, he told English to Africa reporter Joe De Capua that problems in the Niger Delta are significant for the oil industry: “Nigeria may not be the only oil producer in the world, but it is one of a relatively small number of producers who have, I suppose, the dual blessing or the dual curse of being located on the shores of the Atlantic Ocean and also producing very high quality crude oil that is good for making the low sulfur transport fuels that are driving demands in the Atlantic markets.”
(24 February 2006)
Audio interview available at original article.


Will fight for oil-but we won't debate
(Ted Koppel maintains oil drives foreign policy)

Patrick Doherty, TomPaine.com
Will Ted Koppel's frontal assault on one of Washington's most unspeakable open secrets open the door to a real debate over national security? In today's New York Times, Koppel lays out the argument that if oil wasn't the main element of the "the Bush administration's calculations when the president ordered the invasion of Iraq in 2003, it would have been the first time in more than 50 years that the uninterrupted flow of Persian Gulf oil was not a central element of American foreign policy."

Koppel systematically goes back fifty years to show how the Eisenhower, Nixon, Carter, Reagan and Bush administrations all intervened in the Persian Gulf because of oil. He even has a great quote from then-Secretary of Defense Dick Cheney, explaining the rationale for reversing the Iraqi invasion of Kuwait in 1990:

We're there because the fact of the matter is that part of the world controls the world supply of oil, and whoever controls the supply of oil, especially if it were a man like Saddam Hussein, with a large army and sophisticated weapons, would have a stranglehold on the American economy and on - indeed on the world economy.

Nothing, Koppel notes, has changed.
(24 February 2006)
The article by Ted Koppel in the NY Times, Will Fight for Oil is subscribers-only. It begins: "The reason for America's rapt attention to the security of the Persian Gulf is what it has always been. It's about the oil.". There's a discussion at peakoil-dot-com with more quotes from the article.
UPDATE: Related article in Editor and Publisher.
UPDATE (Feb 26):
The text of Koppel's column is now online at donkey o.d.
Comment on Koppel from the left at Znet.


Ports & petrodollars

Jeff Vail, A Theory of Power
I've been amused and intrigued by the recent flap over the sale of P&O, and with it the operations of several major US ports, to the UAE company Dubai Ports World. For a change, I fully agree with President Bush--well, at least with what he is saying to the media--that this is not a security concern, and that the sale shouldn't be blocked. The US government is still in charge of the security, and to borrow from John Stewart, our ports will enjoy the same incompetent government security no matter who we sell them to. The bi-partisan opposition to this smacks of nothing but racist, reactionary populism.

...But the real question here is why Bush is making such a stand on this issue, when it would be much easier, and more beneficial to his "public agenda," to stand behind his campaign promise and be "a uniter." There are several theories, each of which deserves some thought:
(24 February 2006)


Let me kill off once and for all the Iranian oil bourse story

Jerome a Paris, Daily Kos
Crazy scenarios involving Iran's purported attempts to create an oil bourse to start selling oil in euros make the rounds regularly, and even get recommended with alacrity on DKos.

These things WILL NOT HAPPEN, and we have, as a supposedly reality-based community, to focus on real issues and not imaginary ones.

So let me explain why an Iranian oil bourse will not work for the foreseeable future. I hope that this diary can be used as a handy reference when this crops up again in the future.

...So, say that Iran decides to sell its oil in euros. Fine. Both the Iranians and their clients will determine the price for the transaction in dollars, on one of the established markets, and will trade these dollars for euros for the actual payment operation. It will give banks active on the forex markets a little bit of income, but will change nothing to how oil is traded.

If they open a bourse, who will come? The answer is, no one, unless it is nothing more than the new place to buy oil from them and the transaction, whether in euros or in any other currency, will be negotiated in dollars, using existing market standards expressed in dollars, because there is no way that anybody will be able to express and clear the transaction in any other way.
(24 February 2006)

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