Global appetite to boost oil prices
Patrice Hill, The Washington Times
WASHINGTON — The era of cheap oil is over, the government’s chief energy forecaster said yesterday as it nearly doubled its previous forecast for world oil prices in the next 25 years.
Oil will stay near today’s high levels largely because the oil-rich nations of OPEC are not investing in new supplies fast enough to easily meet growth in demand led by China and the United States, the Energy Information Administration said.
“It’s what we would call deferred investment,” said Guy Caruso, head of the respected forecasting agency, adding that he expects oil prices remaining well over $50 a barrel to spur consumers to purchase more fuel-efficient cars. If that does not occur, prices would climb even higher.
The sea change in the energy agency’s thinking also reflects the increased cost and technical difficulty of extracting what oil is available in remote areas such as the deep-water ocean and arctic Siberia, he said.
Also driving up oil prices are the impediments oil companies have been encountering in gaining access to reserves in many countries — including the United States, he said. Congress in the fall once again dropped legislation authorizing oil and gas drilling on federal lands offshore and in arctic Alaska.
(13 December 2005)
Blair faces organised rebellion on nuclear issue
Patrick Wintour, Guardian
A group of Labour MPs are organising to prevent Tony Blair pressing ahead with a new generation of nuclear power stations, claiming that ministers will have to subsidise the nuclear industry massively to make it viable. It is the first sign of parliamentary opposition to nuclear power since the prime minister announced an energy review in the autumn, and is backed by the environment minister Elliot Morley.
The group, brought together by a former minister, Alan Whitehead, is using the same tactic as the backbench opponents of government plans to establish semi-independent state secondary schools, publishing their own proposals in an effort to steer policy, rather than oppose it outright. Mr Whitehead is one of the authors of the alternative education white paper, which set out the terms on which the rebels would accept Downing Street’s reforms.
The new 9,000 word manifesto being drafted by the backbenchers will set out the case for continued investment in renewable energy, rather than taking “a dangerous leap with nuclear”. It will be published in February, as the government’s energy review gets under way with a consultation document in January.
Many Labour MPs fear that Mr Blair privately favours renewing investment in nuclear energy as the most secure way of combating climate change, in the face of evidence that global warming is speeding up and that domestic programmes to cut carbon emissions are failing. Ministers believe the economics of nuclear energy are improving as gas and oil prices rise.
(22 December 2005)
No way found to cut need for foreign oil
Congress can’t agree on methods
Justin Blum, Washington Post
The Senate decision yesterday not to allow oil drilling in Alaska’s Arctic National Wildlife Refuge marks the latest failure of lawmakers to form a consensus on a strategy to reduce U.S. dependence on foreign oil.
Congress has been unable to agree to the two most significant steps analysts cite for addressing the issue: allowing more domestic drilling and increasing automobile mileage requirements.
“The system suffers from complete paralysis because of this,” said Gal Luft, co-chair of the Set America Free Coalition, a bipartisan activist group that is neutral on the refuge but advocates other ways the nation can become less oil-dependent. “We don’t make any progress. The only thing that changes is the level of dependence — it increases every year.”
Luft is trying to shift congressional debate to other possible solutions, including increasing the use of alternative fuels and using electricity to power automobiles.
(22 December 2005)
The remarks of Gail Luft figure prominently in this story. Luft of Set America Free seems to be one of the more effective lobbyists publicizing the need for US energy independence for reasons of national security. For a list of supporters, see their About Us page. Luft is also co-director of the Institute for the Analysis of Global Security. -BA
Watch the price of gas explode
Lex Kerkovius, Financial Post (Canada)
Natural gas investors need only wait for the snow to fly to be able to frolic in the unprecedented winter wonderland that will be North American natural gas pricing for the heating season of 2005-2006. …
In Calgary, for example, gas for this past October was selling for about $12+ per gigajoule compared to about $5+ per GJ in October, 2004. Be forewarned! We do not believe, when all is said and done, that this will even scratch the surface of what consumers will likely have to pay this winter.
We have not changed our view of potential natural gas prices this winter since we last discussed our views in September, 2005. We believe that natural gas supplies are still very tight (too tight in our view). Consequently, gas consumers face the very real risk that gas prices could easily spike above $20.
So let’s summarize the key reasons why we think gas prices might hit these unheard of levels this winter. They include:
– Inadequate storage levels for a normal winter.
– Nearly 40% of Gulf of Mexico gas production is still shut down as a result of the fall hurricane season.
– Gas reserves and production are declining in North America.
– LNG prices will also be high due to similar gas shortages in Europe, and elsewhere.
– Long-range weather forecasts are calling for a relatively normal winter. …
(27 December 2005)
Critics of proposed Long Beach LNG port call it “One of the worst possible sites imaginable”
Bill Pearl, Long Beach Report
Three state agencies — the CA Public Utilities Commission (CPUC), the CA Coastal Comm’n and the CA Energy Comm’n — have filed comments critical of key portions of a FERC/PoLB-prepared draft EIS/EIR regarding a Liquefied Natural Gas (LNG) facility proposed in the Port of LB.
CPUC called the Port of LB site proposed for the 80+ million gallon LNG facility “one of the worst possible sites imaginable” and included new testimony from LNG expert Dr. Jerry Havens indicating that in a worst case scenario, a flammable LNG cloud could travel up to 6.5 miles, potentially igniting sources at shorter distances and triggering cascading damages.
(12 December 2005)
It doesn’t like like the proposed LNG port in Long Beach will be an easy sell; the LB Report has been running a crusade against it.
North Slope oil decline leaves Alaskans somber
Tarek El-Tablawy, Houston Chronicle
Alaskan North Slope crude oil production, once heralded as a domestic mother lode, has hit a new output low — embodying the precarious balance confronting the United States as it struggles for energy security in an era of volatility in the international oil market.
The decline in Alaska is led by a slump in output from the once-mammoth Prudhoe Bay field, which has been producing since 1969. At its height in fiscal 1988, the field produced an average of 1.6 million barrels per day; but in fiscal 2005, it was down to 381,000 barrels per day. Overall production in the North Slope has dropped to an average of 916,000 barrels per day from 2.01 million barrels in the same period. …
For Alaskans, Prudhoe’s decline in particular, and the North Slope’s in general, transcends politics and raises fiscal and emotional issues. Each year, state residents receive a substantial dividend from an investment account built over the year by a portion of oil tax revenues. Those dividends, based on market investment performance, have ranged from a record $1,964 per resident in 2000 to $845.76 in 2005. …
Prudhoe “was one of the last great fields in America,” said Bill Samuelson, an analyst with Houston-based consultancy Purvin & Gertz.
Projections for new fields slated to come on-stream over the next 10 years are expected to do little but temporarily offset the decline. North Slope output, according to the state, is pro- jected to drop to about 833,000 barrels per day by 2015, with 50 percent of that production coming from new fields. …
(17 December 2005)
Heathrow experiences fuel shortages
James Sturcke, Guardian
Airlines at Heathrow airport have been put on fuel rationing following the devastating Hemel Hempstead [Buncefield] oil depot explosions, it was confirmed today.
The rationing, imposed by airport operator BAA, means some long-haul carriers are having to make “pit stops” to take on more fuel. …
A BAA spokesman said: “The contingency plans have enabled us to stabilise supply and demand for fuel and continue near-normal airport operations for the 186,000 passengers that fly to and from Heathrow every day with minor disruption to some passengers and no cancellation of flights.”
On Sunday, a huge fire at the Buncefield depot, one of the country’s largest storage facilities, engulfed around 20 fuel tanks holding around 60m gallons of petroleum products.
(19 December 2005)
