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Oil hits $108 on pipeline blast
BBC
Oil prices went above $108 a barrel after one of Iraq’s main export pipelines was blown up.
A company official said damage would cut Basra’s exports by a third, adding to supply fears and increasing concern about stability in the region.
… The fighting in Basra escalated this week after a military operation was launched against militias in the city.
“We see events in Iraq as having taking a dangerous turn with the stability of the southern oil system now starting to become a potential concern,” said Barclays Capital analysts in a note.
Iraq is a member of producers’ cartel Opec and one of the world’s biggest oil exporters.
(27 March 2008)
Seeking Supply: Al Husseini interview (video)
CNBC
Insight on energy supply, prices and the pipeline explosion in Iraq, with Sadad Al Husseini, Saudi Aramco former head of exploration and CNBC’s Carl Quintanilla
(27 March 2008)
Summarized by at The Oil Drum:
Sadat Al Husseini, former ARAMCO Vice President, was on CNBC this morning. He said we have used about half global reserves and there is another half left out there. He said we are finding a lot less oil than we are consuming. Said the biggest future oil for the US is conservation. He was asked the peak oil question directly and he kind of danced around the question but, in my opinion, his answer made it quite clear that he was well aware of peak oil.
He said that it is costing $70 to $80 dollars per barrel to get at the new oil which is being brought on line now. He was talking about the very deep water stuff.
Mood in the hood
Sir Oolius, Gristmill
John Hofmeister, President of Shell Oil Company, was on Charlie Rose Tuesday night.
About 22 minutes into the segment, he says the following [my own transcription]:
If we don’t drill more in this country, I am quite concerned about civil disturbances in our urban areas because of the price of fuel.
…I was meeting in Los Angeles with mayor Villaraigosa and I asked him a specific question because I lived there during the Rodney King civil disturbances. [I] said, “How is the mood in the hood based upon the price of gasoline compared to the mood in the hood at the time of the Rodney King disturbances?” He said it’s threshold.
Let us drill or those people will act all crazy again! You know how they can be when it comes to things like this.
And they say environmentalists are alarmist.
(27 March 2008)
The discussion about energy at Charlie Rose was actually pretty good – long and in-depth. Too bad there was only one viewpoint.
About the future of oil supply, Mr. Hofmeister said that we have “100 years left of steady oil production” — assuming that unconventional sources are included. About US policy: “We are the only country in the world not practicing natural resource nationalism when it comes to energy.”
Hofmeister announced that he will be retiring from Shell in two months (after 10 years with them).
I wouldn’t make a cartoon character out of Hofmeister. He is one of the more reasonable spokespersons for an oil company – accepts global warming, says that Shell wants to do things in an environmentally responsible manner, etc.
He (and Shell) definitely do want to get access to areas that had been declared off-limits for environmental reasons.
The truth is that rising fuel prices are correlated with political turmoil. You may remember the protests in Burma a few months back when the government attempted to raise fuel prices (that is, remove subsidies). Many other governments want to remove fuel subsidies, but are afraid of the political repercussions – India, China, Iran, Venezuela.
I haven’t heard that inner-city ghettos would be the locus for protests against fuel prices. Poorer people in rural or suburban areas would seem to be the hardest hit. The Nation had an excellent article on the subject a few years ago: Running on Fumes.
In the U.S., people tend to express their anger in the poll booth. The other manifestation is protests by truckers (Truckers ‘going broke’ and threatening to strike). In 2000, Europe was the scene of protests by lorry drivers, farmers and others
As the price of fuels continues to go upward, environmentalists will be one of the groups scapegoated (along with OPEC and Big Oil). It would be wise to have a sophisticated position from which to respond.
-BA
