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Politics & economics - Mar 1

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Rep. Joe Barton goes after Citgo
Juan Gonzalez, New York Daily News
Rep. Joe Barton, the powerful Texas Republican who is chairman of the House Energy and Commerce Committee, launched a bizarre investigation last week into possible antitrust violations by a major oil company.

You will be surprised to learn that Barton, one of the top recipients in Congress of campaign donations from the energy industry, is not probing whether ExxonMobil or Chevron or any of the other oil giants engaged in price gouging when gasoline and heating oil costs skyrocketed the past few years.

No, the good congressman has set his sights on the only oil company that actually dared to lower its prices last year - at least for the poorest Americans.

In a Feb. 15 letter to Citgo, the Houston-based company owned by the Venezuelan government, Barton demanded that company officials produce by tomorrow all records, minutes, logs, e-mails and even desk calendars related to Citgo's novel program of supplying discounted heating oil to low-income communities in the United States.

The Citgo program, which kicked off late last year in Massachusetts and the South Bronx, provides oil at discounts as high as 60% off market price.
(23 Feb 2006)

China paves way for £14bn BP oil stake
Nick Mathiason, The Observer
BP has been given the green light to make the largest investment by an overseas company in China.

The Observer has learnt that in recent days Beijing has agreed to allow BP to enter into a joint venture with Sinopec, the foreign-listed arm of China Petroleum Chemical Corporation, which is China's biggest oil producer and refiner.

This could see BP take a $14bn stake - equivalent to 25 per cent of Sinopec's shares.

The signal from senior Chinese government figures that it has sanctioned an investment into one of its most important energy firms represents a spectacular breakthrough for the UK energy giant, though it appears to rule out a total takeover of the Chinese firm by BP.

But a deal will put BP at a strategic advantage, making it the most significant overseas player in what will shortly be the most voracious energy-consuming country in the world. If successful with a tie-up, BP will rival Exxon as the world's biggest energy firm. For Sinopec, a deal with BP will help with its exploration activities - an area where it currently lags behind its two national rivals.
(26 Feb 2006)

India: 'N-Deal will help launch thorium reactors'
Press Trust of India
...The basic reason why thorium is ignored world over is that it has to be externally fed with some man-made fissile material like plutonium to get ignited and start producing power, he said.

According to the designer, if India on its own, wanted to accumulate sufficient plutonium for its fast breeder programme and the thorium reactor research, it has to wait for at least 30 years.

"On the other hand, the Indo-US deal provides India a window of opportunity to get the plutonium and build thorium reactors today", he said.

There is at least 3000 tons of plutonium waiting to be reprocessed from spent fuel discharged globally from uranium-based reactors. For the first time after 30 years of freeze, the US is reconsidering plutonium use for energy generation and, together with Russia, is wanting to set up the GNEP (Global Nuclear Energy Partnership) for plutonium recovery. It has invited India to become a partner.
(25 Feb 2006)


Iranian oil bourse

John Quiggin, Crooked Timber
I got an email asking me about the Iranian Oil Bourse, which is causing great excitement among the Peak Oil crowd. Here’s my draft response. Comments appreciated.

“Bourse” is just another word for “exchange”, and the creation of one in Iran is an attempt to capture more of the economic activity associated with international oil markets and also perhaps to exert more control over oil markets.

The US gains directly from the fact that people hold US currency (since it costs almost nothing to print, but can be used by the US government to buy goods and services – this is called “seignorage”) and indirectly in terms of perceived power and influence from the fact that the $US is the dominant world currency. The switch to euros threatens both. However, the total benefits are not that great. The seignorage benefit to the US from overseas holdings of $US is between $15 billion and $50 billion per year, and the United States has many more important sources of power and influence than the $US.
(28 February 2006)
Many comments at the original. Recommended by Big Gav.

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