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Iran issues stark warning on oil price
Robert Tait, Guardian
War of words over trade sanctions
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Iran stepped up its defiance of international pressure over its nuclear programme yesterday by warning of soaring oil prices if it is subjected to economic sanctions. As diplomats from the US, Europe, Russia, and China prepared to meet today in London to discuss referring Tehran to the UN security council, Iran’s economy minister, Davoud Danesh-Jafari, said the country’s position as the world’s fourth-largest oil producer meant such action would have grave consequences.
“Any possible sanctions from the west could possibly, by disturbing Iran’s political and economic situation, raise oil prices beyond levels the west expects,” he told Iranian state radio.
(16 January 2006)
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Russia reports $300 million net inflow
Associated Press
MOSCOW – More money entered Russia than left it last year for the first time in the country’s post-Soviet history, Deputy Prime Minister Alexander Zhukov said Monday.
After a year of record foreign borrowing by Russian companies, Zhukov told a Kremlin meeting that the net inflow of $300 million reported in Central Bank data was “evidence of a positive change in the investment climate in Russia.”
In 2004, when a politically charged tax probe against the Yukos oil company was reaching its climax, capital flight jumped from $1.9 billion in 2003 to $8 billion. In previous years Russia has reported capital flight as high as $25 billion. …
At the televised Cabinet meeting during which Zhukov spoke, President Vladimir Putin noted that the health of the stock market, which has continued to rise since the start of the year, was a “good growth indicator.”
(16 January 2006)
UK Union pushed clean coal and nuclear
Evening Standard via This is London
The UK faces a “mounting energy crisis”, which could lead to blackouts, job losses and rocketing fuel bills, the leader of one of the country’s biggest unions warned.
Derek Simpson, general secretary of Amicus said urgent action was needed after successive governments had “shied away” from taking decisions on future supplies of energy. Amicus officials will meet to plan a campaign seeking public support for nuclear power and clean coal technology.
Mr Simpson said: “The debate on the energy crisis is in limbo and we need urgent action or Britain will face the prospect of blackouts and soaring utility bills over the next five years.
“The nation’s energy needs will be hostage to politically unstable states unless the Government’s energy policy promotes clean coal technology and new nuclear power build.”
The union warned that gas shortages and rising energy costs were a growing threat to many UK companies, threatening job cuts. “As a nation we are hostage to the supply of gas from politically unstable countries to heat our homes and power our factories,” added Mr Simpson.
(16 January 2006)
Food as commodity
Tom Philpott, Gristmill
In business terms, a commodity is a useful item, produced in bulk, with no characteristics that distinguish it from others of its kind. What brand of DVD player do you own? Few people know. DVD players have become a commodity; they’re all pretty much the same.
In commodity markets, prices tend to drop over time. Personal computers, for example, have steadily fallen in price over the past 15 years. Remember when “IBM or McIntosh?” meant something? Now it’s “PC or Mac,” and PC controls upwards of 90 percent of the market. In commodities markets, the producer that can churn out the most product at the cheapest price wins. Dell clawed its way to the top of the PC market by streamlining production and squeezing its suppliers for price breaks as it gained heft. Producing a great, innovative product had nothing to do with it.
It’s counterintuitive to me that we would surrender something as sensual and poetic as food production to the brutal economics of commodity markets. Food a commodity? Nonsense!
Well, it is. Last year, the UN’s Food and Agricultural Organization released a report called “State of Agricultural Commodity Markets.” It provides an interesting look at what happens when food is treated as a commodity, and what role international aid organizations play in propping up the system.
The report brims with interesting information. For example…
(16 January 2006)
A Gas Gobbler That’s Worth Keeping
Michelle Singletary, The Washington Post
An example of the kind of arithmetic that causes people to keep gas guzzlers. The columnist calculates costs for someone to keep a 2000 Ford Expedition vs. buying a new, smaller SUV. The conclusion, without considering any other alternatives and assuming constant gas prices, is to keep and drive the Expedition. …
(15 January 2005)
Rocky road for auto companies
Deborah Dundas, Belfast Telegraph
The cost of filling up my SUV – a Subaru Forester – jumped from $$35 in early 2005 (that is, before Hurricane Katrina) to $$50 in January 2006.
I haven’t changed the way I drive, but surveys show many North Americans are thinking twice about that trip to the corner store in a bid to curb the inflationary effect of expensive petrol on their disposable income.
Bill Ford, head of the business founded by his great grandfather Henry, believes oil reserves are in decline and the future of the auto industry is in alternative fuel vehicles, whether oil prices level out or drop in the near future.
GM aims to produce about 250,000 hybrid vehicles by the end of the decade. …
(16 January 2006)
Interview with oil tycoon T. Boone Pickens (AUDIO)
Steve Inskeep, Morning Edition (NPR)
As part of Morning Edition’s series The Long View, we hear from oil tycoon T. Boone Pickens. Pickens says he still gets his hands dirty and doesn’t plan to retire until he dies.
(16 January 2006)
Seven-minute interview has Pickens predicting lower oil prices in the short term, but triple-digit prices in the long term. “I don’t think you can increase [oil] production, more than what it is right now.” Nothing new for followers of Peak Oil, but interesting to hear it from an long-time oilman.
Limit fertilizer to control costs, farmers urged
Jenni Glenn, The Journal Gazette (US)
Farmers who save on fertilizer could reap higher profits, even if their harvest is reduced as a result, a Purdue University agronomy professor said Wednesday.
High fertilizer prices are making it costly for corn growers to shoot for the largest possible harvest, professor Brad Joern told farmers during a workshop at Purdue University’s Columbia City research farm, about 10 miles west of Fort Wayne. More than 40 farmers attended Purdue’s nitrogen management workshop Wednesday. If farmers apply too much nitrogen fertilizer, the size of the harvest will not increase enough to cover the rising cost of fertilizer, Joern said.
Fertilizer prices have nearly doubled in the past two to three years, said Lynn Reinhart, a DeKalb County farmer who raises crops on about 1,400 acres of land. The price of natural gas – a key ingredient in nitrogen fertilizer – is rising and fueling the high cost of fertilizer. Reinhart expects to pay about 35 cents a pound for the cheapest type of nitrogen fertilizer, anhydrous ammonia, this year. …
With fertilizer costs at near-historic highs, farmers need to be careful not to overuse the chemicals, Joern said. Instead of trying to maximize the farm’s harvest, farmers should try to strike a balance between applying enough fertilizer to the corn so it will grow but not so much that it will hurt profits. …
(12 January 2006)
Many Australian farmers are currently not allowed to buy any fertiliser, thanks to the wisdom of ‘national security’. -LJ
