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Consumption reform only way to curb oil price
Ryan Harrison, Business 24/7 (United Arab Emirates)
Amid the current climate of supply-side oil disruptions, Taqa [Abu Dhabi National Energy Company] Chief Executive Peter Barker-Homek said the price of fuel could reach $150 this year, with oil consumption showing no sign of slowing down.
As demand for oil increases by more than half in 2015, the current commodity price pinch is set to continue for at least another two years as the world adapts to new forms of energy efficiency, he said.
Changing the world’s consumption habits and not waiting for oil prices to fall is the solution to the current food price crisis, said Barker-Homek.
… Barker-Homek: The way to decrease the strain on commodities is not necessarily by bringing oil prices down, but by the world consuming differently. That is going to take a couple of years of growing pains, while the world adapts to not seeing oil as a cheap commodity. That adaption will create some disruptions but within the next five to seven years it will have worked itself out.
Q: What is the future of oil supply?
Barker-Homek: The surplus capacity and demand ratio is going to remain tight – whether it is power grids or oil – and you are going to see some instability and volatility. The key driver to easing this pressure is whether we are past peak oil. And the answer is we are past cheap oil, but not past peak oil. A good portion of this planet is yet to be explored.
PROFILE: Peter Barker-Homek, Chief Executive, Taqa
The Abu Dhabi National Energy Company, or Taqa, was originally tasked with providing the majority of the emirate’s power and water needs but has made quick work of snapping up foreign assets in a bid to diversify the local oil economy.
(3 May 2008)
The Oil Conundrum
Robert Bryce, Texas Observer
Excerpts from Gusher of Lies: The Dangerous Delusions of “Energy Independence”
… American energy companies are still big players in the global market, but they are no longer the dominant players. Instead of dictating terms, American energy companies and other international energy companies must now court the national oil companies who sit atop the vast majority of the world’s remaining oil and gas deposits. That means that state-controlled outfits like Saudi Aramco, Russia’s Gazprom and Venezuela’s Petróleos de Venezuela (PDVSA), are, in many cases, able to dictate the rules by which the major oil companies must play.
At the same time that the big oil companies are losing their negotiating strength, rising demand from China, India, and other developing countries is allowing the national oil companies to change their focus. Instead of looking first to export their products to Western consumers, they are looking east.
Long before the rise of OPEC, and years before Saudi Arabia became the key player in the global oil business, the world’s most important oil cartel was based in downtown Austin, Texas.
Between the 1930s and the early 1970s, the three members of the Texas Railroad Commission were the most important people in the global oil business.
… Texas’ dominance of the industry went far beyond legal issues and oil prices. That oil was a strategic weapon during times of war and crisis. Texas oil provided a critical advantage in World War II. The Big Inch and Little Big Inch pipelines, both of which were built in record time during the war, provided huge quantities of fuel to the East Coast and became key elements of the American war effort.
… America’s dominance of the global oil business couldn’t last forever. And the end of its dominance can be traced to a specific date: March 16, 1972
… Huber and Mills were not the first to conclude that efficiency does not reduce consumption. In 1865, a noted British economist, William Stanley Jevons, published a book that would become his most famous work, The Coal Question. Jevons’ book was the beginning of what is now known as the field of energy economics.
Robert Bryce is a contributing writer for the Observer.
(2 May 2008)
Big Oil’s widening profit gap
Jim Jelter, MarketWatch
Commentary: Resentful public can’t grasp tight refining margins
Chevron Corp. reported first-quarter earnings Friday, rounding out results from the top five oil companies operating in the United States. And the verdict is unanimous: They all posted sharply narrower refining margins as a result of skyrocketing crude-oil prices.
This hurts. It means they aren’t passing down the full cost of higher crude prices to the motoring public.
It means constrained cash flow in their downstream operations, leaving less for capital expenditures. If unchecked, this trend will pressure dividends, and that worries Wall Street.
But let’s look at the overall numbers.
… Industry apologists will argue [that these figures don’t represent] stellar growth. … And no one is screaming about obscene profiteering.
So why the intense public anger aimed at oil companies? Simple. Most Americans are not measuring profits in percentages. All they see is the bottom line and lumped together, the top five oil companies raked in a staggering $37 billion during the March quarter.
Such numbers obscure the hard work, expenses, expertise and huge risks these companies face to keep us supplied with fuel.
Expecting public sympathy for tough times in the refining side of the business is futile. Not as long as people feel the industry has them over a barrel.
(2 May 2008)
Dead ducks a boon for oil-sands opponents
Unnati Gandhi, The Globe and Mail
Over the decades, Ruth Kleinbub has nursed dozens of wounded snowy owls back to health. Injured diving ducks have splashed around in her bathtub.
In the same vein, the 56-year-old environmentalist, conservationist and bird enthusiast from Fort McMurray, Alta., has been trying – without much success – to direct Canadians’ attention to what she says are hundreds of birds that die every year at heavy oil plants in Alberta and the tailings ponds that come with them.
… Then on Monday, a flock of more than 500 mallards landed on a Syncrude tailings pond, which sits along a major flyway for migrating waterfowl.
Only five were rescued. Two of those have since died, an Alberta Environment spokeswoman confirmed yesterday.
In a matter of hours, images of dead ducks smothered in oil made news around the world.
The stories have shone a harsh light on Alberta’s oil sands, and sparked public furor – something Ms. Kleinbub said she’s worked so hard to do herself since 1988.
The incident, according to one expert, has also played a part in temporarily derailing a $25-million, three-year public relations campaign the Alberta government recently launched to “brand” Alberta and persuade domestic and international critics that production in the province’s oil sands is environmentally friendly.
(3 May 2008)
Contributor Scott Chisholm Lamont writes:
There have been other wildlife deaths related to oil sands processing, but this is the first to garner real attention.