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Belarus cuts off Russian oil to Europe

Fred Weir, Christian Science Monitor
For the second time in just over a year, a political squabble between Russia and one of its ex-Soviet neighbors has cut off energy supplies to Europe, triggering anxieties about Moscow’s reliability as an economic partner.

On Monday, Russia accused Belarus of shutting down the northern leg of the 2,500-mile-long Druzhba pipeline, which carries up to 2 million barrels of Siberian crude daily to European customers, causing shortages in Poland, Germany, and Lithuania.

The disruption is reminiscent of last year’s shutdown of Russian gas supplies to Ukraine, which caused similar energy jitters in Europe. Though Poland and Germany have ample reserves on hand to ride out any temporary squeeze, the dispute underscores increasing concerns about Europe’s dependency on Russian energy
(9 Jan 2007)
Commentary by Heading Out at TOD.

International oil groups face new terms in Venezuela

Ed Crooks, Financial Times
The four heavy oil upgrader projects have been described as the “crown jewels” of the Venezuelan oil industry.

The government said last year that it wanted to bring them under state control; back in power with his mandate reconfirmed, Hugo Chávez is apparently determined to press ahead with that plan.

The heavy oil in Venezuela’s Orinoco belt gives the country the world’s biggest oil reserves, ahead even of Saudi Arabia. But the oil comes out of the ground as sludge, with the consistency of peanut butter when it is cold, and needs to be upgraded before it can be used.

The process is not enormously expensive – it has been calculated at about $1 per barrel of saleable syncrude, as the product is known – but it has required an estimated $12bn of investment by international oil companies.
(9 Jan 2007)

Energy independence is South America’s big dream

Alan Clendenning, The Associated Press via The Gazette (Canada)
Aiming to leverage their huge natural gas reserves, leaders across South America are talking about building a network of pipelines stretching thousands of kilometres to feed demand and wean themselves from being so dependent on big U.S. and European energy companies.

But their show of brotherhood could backfire if this expensive dream becomes reality, since the network they hope to build would also likely turn the continent’s neighbours against each other as they compete for clients.

In Brasilia on Thursday, the presidents of Brazil, Argentina and Venezuela discussed plans for an 8,000-kilometre pipeline from Caracas to Buenos Aires through Brazil’s Amazon rainforest, complete with a link to Bolivia.
(8 Jan 2007)

Resource Wars

William K. Tabb, Monthly Review
The close relation between war and natural resources is of long standing. What else was colonial conquest about? Vast estates held by the Dutch East India Company came under direct control of the Crown as did the lands conquered by the British East India Company. What was in demand in Europe dictated the commodities produced and the natural resources that were ripped from the earth.

…Resource extraction in the contemporary era continues to spur extremes of violence and war. In a 1997 study Jeffrey Sachs and Andrew Warner examined the economic performance of ninety-five countries between 1970 and 1990.2 They found the higher a country’s dependence on natural resource exports the slower their economic growth rate. Paul Collier and co-authors analyzed fifty-four large-scale civil wars that occurred between 1965 and 1999 and found that a higher ratio of primary commodity exports to GDP “significantly and substantially” increases the risk of conflict.3 High levels of oil dependence correlate especially strongly.

…Paul Collier and co-authors analyzed fifty-four large-scale civil wars that occurred between 1965 and 1999 and found that a higher ratio of primary commodity exports to GDP “significantly and substantially” increases the risk of conflict.3 High levels of oil dependence correlate especially strongly.

Ted Koppel, writing in the New York Times (February 24, 2006), responded to what he described as the Bush administration’s “touchiness” about the charge that we are in Iraq because of oil by stating the obvious, though often unsaid, truth, “Now that’s curious. Keeping oil flowing out of the Persian Gulf and through the Strait of Hormuz has been bedrock American foreign policy for more than half a century.” Today control over the world’s oil supply is at the forefront of Washington policy makers’ thinking, even if the president and his team deny any such intent and talk publically of reducing dependence on Middle East oil by three-quarters of present levels, an absurdly impossible goal. Two-thirds of the oil in the world is in the Middle East, much of it under Iraq and Iran, the axis of oil, the current targets of the U.S. war on terrorism. Control of oil is integral to Washington’s official goal of world domination, a goal stated this baldly in national security documents.

…In the United States, too, military planners and the CIA spin out scenarios of wars for desperately needed natural resources and the need to deal with the mass migrations of desperate people as entire societies disintegrate. Climate change, these forecasts suggest, will bring on new and even greater resource wars. The United States with its overwhelming advantage in all things military is likely to see saber rattling, shock, and awe as the best responses. “When you are a hammer, everything looks like a nail,” seems the appropriate metaphor for the petro-political situation. Some Americans, afraid of not being able to heat their homes and fill the tanks of their gas guzzling cars, may unthinkingly offer support for new foreign adventures-but Iraq has shown such oil comes at a high cost in blood and treasure.

It seems it is not all that easy to shock, awe, invade, and occupy countries.

…It is analysis rather than an apology for Big Oil that tells us that the situation has changed since the end of the Second World War when the so-called seven Sisters dominated the world oil market. Today Exxon-Mobil produces less than 3 percent of world output and the seven largest oil companies control less than 5 percent of world reserves. This does not mean that Exxon-Mobil is not the world’s most valuable and most profitable company nor that the oil giants do not benefit from high oil prices. They do however face more sophisticated national oil companies from China, India, Brazil, and elsewhere who compete for supply which is increasingly under the control of state-controlled producers.

…As to peak oil, predictions of the end of oil have been made often in the past and it is not clear that frightening scenarios will play out in the short run that some suggest. There are complex issues of geology, technology, and prospective efficiency considerations.

William K. Tabb taught economics at Queens College for many years, and economics, political science, and sociology at the Graduate Center of the City University of New York. His books include Economic Governance in the Age of Globalization (Columbia University Press, 2004)…
(Jan 2007)
Another article in the Marxist Monthly Review (MR) which tries to integrate traditional leftist analysis with the growing awareness of resource constraints. MR is probably the best journal of leftist analysis and has been published for more than 50 years. -BA

France consumes less electricity in 2006

Nouvel Observateur
The drop of 1% is the first drop for nine years. Principal cause: less extreme temperatures.

French consumption of electricity decreased in 2006. André Merlin, president of RTE [French transmission system operator] commented on Sunday, Jan 7 on France Info, that the reduction in “the order of 1% per year,” is the first in nine years.

This reduction is “not enormous,” but “it has been nine years since one has seen such a change in consumption,” he emphasized. Merlin explained the change as primarily caused by the weather: “It was not very cold during 2006.”

He also a noticeable reduction in consumption by large industry, due to the “rise in the price of energy which has encouraged conservation, but has also caused some translocation to other countries in Europe and doubtless outside of Europe.”

Thus, one observes after 2005 a reduction in consumption of large industry, “particulary in three sectors: automotive, chemical and paper/paperboard, which are large consumers of electricity.”

Original French: Les Français consomment moins d’électricité

Cette baisse de 1% est une première depuis neuf ans. Principale cause: la douceur des températures.

La consommation française d’électricité a diminué en 2006. André Merlin, le président de Réseau de transport d’électricité (RTE), a indiqué dimanche 7 janvier sur France Info que la baisse, de “l’ordre de 1%” sur un an, est une première depuis neuf ans.

Cette baisse n’est “pas énorme”, mais “cela fait neuf ans que l’on n’avait pas connu une telle évolution de la consommation”, a-t-il souligné. André Merlin explique cette évolution en premier lieur par les conditions climatiques: “Il n’a pas fait très froid au cours de l’année 2006”, a-t-il dit.

Il a également mis en avant “une baisse très sensible de la consommation des grands industriels”. Ce phénomène est dû à “l’augmentation des prix de l’énergie qui a poussé à faire des économies mais a aussi provoqué un certain nombre de délocalisations vers d’autres pays en Europe et sans doute en dehors de l’Europe”.

Ainsi, on observe depuis 2005 une baisse de la consommation des grands industriels, “particulièrement dans trois secteurs: l’automobile, la chimie et le papier-carton qui sont de gros consommateurs d’électricité”.
(8 Jan 2007)
Contributor David Landgren writes:

This item was widely reported in the French media (radio and print). Searching for the terms “demande éléctricité” on Google News France turns up many similar hits.