Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Big oil’s waiting game over Iraq’s reserves
Ed Crooks and Sheila McNulty, Financial Times
In Iraq, oil companies face a dilemma. They can wait for the central government in Baghdad to agree a new oil law that will give them a legal framework in which they can operate, and for the security situation to become manageable.
Or they can press ahead and sign agreements with the Kurdistan Regional Government, the authority in the autonomous north of Iraq, at the risk of souring relations with Baghdad and shutting themselves out of deals in the rest of the country.
It is a decision that has so far divided the smaller operators from the majors.
(18 September 2007)
After Iraq, no one should bank on cheap oil
Editorial, The Age
OIL is the fuel that, by powering the industrial revolution, changed the world. The global economy’s need for a secure oil supply is so obvious that former US central bank chief Alan Greenspan has expressed exasperation in his new memoir that “it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil”. He does not mean an outright grab for Iraq’s oil. Instead, he writes that Saddam Hussein could have brought “the industrial world to its knees” had he gained control of the Strait of Hormuz and thus of oil shipments out of the Gulf. “I cannot understand why we don’t name what is evident and indeed a wholly defensible pre-emptive position,” he told The Guardian.
In July, Defence Minister Brendan Nelson admitted the obvious link between the war and oil, before making a hasty retreat, and Prime Minister John Howard also cited “energy demand” as one of the strategic reasons for stabilising Iraq. The resulting controversy explained the politics of denying the oil link, but this denial has unfortunately extended to public neglect of the broader and increasingly urgent issue of energy security.
The rise in the crude oil price last week to a record $US80 a barrel, even after OPEC agreed to increase production, reflects concern that skyrocketing demand will exhaust accessible reserves of oil, as well as other energy sources such as gas and uranium. A state of the region survey released at this month’s APEC forum found high energy prices were seen as the greatest threat to growth. Energy security was rated a more urgent priority than climate change.
Australia’s huge gas and uranium deals with China and Russia are part of a race to secure energy sources. But what is Australia doing to reduce the vulnerability associated with its oil dependency? By contrast to the costs of war, this country has underinvested in alternative fuels and forms of transport – public transport offers one of the best ways to guard against any oil shock (and cut greenhouse gas emissions too). The reliance of policy on a secure supply of cheap oil for years to come is as deluded as the claim that the Iraq war has nothing to do with oil.
(18 September 2007)
Contributed by Jenny Bain.
A reminder that Alan Greenspan was not the first mainstream figure to draw attention to the obvious – and to get his hands slapped for doing so. -BA
UPDATE: Comment by Louis Proyect: Greenspan, oil and Marxism.
Greenspan: Euro Gains As Reserve Choice
Former U.S. Federal Reserve chairman Alan Greenspan said it is possible that the euro could replace the U.S. dollar as the reserve currency of choice.
According to an advance copy of an interview to be published in Thursday’s edition of the German magazine Stern, Greenspan said that the dollar is still slightly ahead in its use as a reserve currency, but added that “it doesn’t have all that much of an advantage” anymore.
(17 September 2007)
Interview with Chris Cook, inventor of the Iran Oil Bourse
Angelique van Engelen, OhmyNews
The next few days, the world will be holding its breath as the U.S. is drumming up support for highly controversial sanctions against Iran. The implications of such a move could be potentially disastrous and it’s likely we’ll see a showdown of who holds what kind of power and where on the planet. In a bizarre twist of fate, a UK consortium that is involved in developing the Iran Oil Bourse (IOB), might stand to benefit from sanctions.
Chris Cook, 52, the former director of the International Petroleum Exchange, is the originator of the idea behind the IOB. He’s planning to go back to Iran, from his native England, after Ramadan, and set to work again on the launch of this bourse which cuts out the dollar as a currency in which to trade oil.
…He is part of the Wimpole Consortium that’s commissioned by the Iranian government with creating the IOB. Cook’s been plodding on in Iran for the last three years. Without success. He wasn’t even paid for his work for over two years. The platform’s launch, much hyped in the media, has been delayed time and again. Iranian oil ministry officials have been hampering his work. In utter desperation, he decided a while ago to write to President Ahmedinejad. Who soon afterwards finally managed to brush off some of his own enemies in the Majlis and ordered a drastic shake up of the Oil Ministry.
Three oil ministers he’d appointed since he first took office in 2005 had all virtually no backing from hardline politicians. That’s public knowledge, yet Cook’s letter to the President wasn’t pointless. As a matter of fact, he might have inadvertently been instrumental in providing President Ahmadinejad the backing he needed.
To date, he hasn’t received a reply “[…] but we know (through top level contacts) he read it. We know he put the Oil Minister on the spot with it, and we know it was a major reason why he was able to sack the Oil Minister recently, who is busily sacking some of the oil mafia, while he can.”
Cook has been an oil/energy insider for way longer than the past three years. The Iranian connection was established in 2001, when he “blew the whistle” about investment banks’ greedy immoral market manipulation and pointed out the nasty effects on producers and consumers. A well-connected Iranian introduced him to the Iranian Central Bank Governor, who was convinced of the necessity for a Middle Eastern oil exchange which was not susceptible to speculator driven volatility and manipulation by middlemen. “A couple of years later [the Wimpole Consortium was] invited to draw up blueprints for the “IOB” project,” says Cook.
So what is the Iranian Oil Bourse about, if it’s not a deliberate attempt to kick the U.S. dollar in the goolies, as is so often suggested? “The currency of the IOB contracts was never a consideration,” says Cook.
(1X September 2007)