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Venezuela Expects Oil Exports to China to Soar
Peter Wilson, Bloomberg
Petroleos de Venezuela SA, South America’s largest oil company, expects its exports to China to rise fivefold by 2012 as it seeks to lessen its dependence on the U.S. market.
Sales of crude oil and petroleum products to China may top 300,000 barrels within years, the state oil company said in a press statement. In an interview, Petroleos de Venezuela board member Asdrubal Chavez said the company expects to reach the 300,000-barrel a day mark by 2012.
(22 August 2005)
Foolishness on Fuel
Editorial, NY Times
Senator Dianne Feinstein offered an amendment to strengthen fuel economy standards for S.U.V.’s, minivans and pickups. When James Talent, a Missouri Republican, opposed the amendment with an argument about potential lost jobs, he drew a sharp response from Pete Domenici, the committee chairman. What’s really costing jobs, Mr. Domenici said, is Detroit’s failure to make the fuel-efficient cars that can compete on world markets.
Mr. Domenici then voted against Ms. Feinstein’s amendment. So did most of his colleagues.
This contradiction between the ability of smart people like Mr. Domenici to recognize an obvious problem and their failure to embrace an obvious solution is traceable to the political influence of the automakers and their unions, to ideological hostility to regulation, and to inertia. Congress has voted so often against improved fuel economy standards that it seems incapable of doing anything else.
(21 August 2005)
Whatever the economic system, oil is a shock
Editorial, Sacramento Bee
As the free market in the United States sends gasoline prices toward the $3-a-gallon milestone, a different problem is unfolding in the country with the biggest growing thirst for oil, China. While the Communist government controls (which is to say, subsidizes) the retail price of gas, it seems to be buying less on the world market to deal with the rising cost that the government and affiliated companies pay for fuel. In southeastern China, gas stations have run out of gas. Cars, six rows abreast and lined up a block, were waiting for stations to reopen. The situation looks uglier than the U.S. oil shortages of the 1970s.
Both countries’ economies and political structures assume unlimited oil, somewhere in the $40-a-barrel range. The wholesale price is about $65 a barrel, and as China’s economy sucks up more fuel and as Americans continue their six-cylinder lifestyle, demand will outstrip supply.
(21 August 2005)
Ten Things Congress Could Demand from Bush on Iraq
Juan Cole, Informed Comment
…And as I have argued before, an Iraq civil war will likely become a regional war, drawing in Iran, Saudi Arabia, Jordan, Syria and Turkey. If a regional guerrilla war breaks out among Kurds, Turks, Shiites and Sunni Arabs, the guerrillas could well apply the technique of oil pipeline sabotage to Iran and Saudi Arabia, just as they do now to the Kirkuk pipeline in Iraq. If 20% of the world’s petroleum production were taken off-line by such sabotage, the poor of the world would be badly hurt, and the whole world would risk another Great Depression.
People on the left often don’t like it when I bring this scenario up, because they dislike oil; they read it as a variant of the “war for oil” thesis and reject it. But working people, whom we on the left are supposed to be supporting, get to work on buses, and buses burn gasoline. If the bus ticket doubles or triples, people who make $10,000 a year feel it. Moreover, if there is a depression, the janitors and other workers will be the first to be fired. As for the poor of the global South, this scenario would mean they are stuck in dire poverty for an extra generation. Do you know how expensive everything would be for Jamaicans, who import much of what they use and therefore are sensitive to the price of shipping fuel? It would be highly irresponsible to walk away from Iraq and let it fall into a genocidal civil war that left the Oil Gulf in flames.
…So here is what I would suggest as a responsible stance toward Iraq. Others, including Iraqi politicians, have already suggested most of these things, but I think the [ten steps listed] below hang together and could avert a tragedy while allowing us to get out.
(22 August 2005)
Middle East expert Juan Cole argues against immediate US withdrawal from Iraq, partly on the grounds of what instability would do to the price of oil. -BA
The Oil Effect
Editorial, NY Times
Just when it was starting to seem as if consumers were really shaking off high energy prices, Wal-Mart announced this week that its profits stumbled in the second quarter, rising at their slowest rate in four years. Forced to choose between their closets and their gasoline tanks, Americans unsurprisingly chose their tanks. Wal-Mart warned that future sales would be curtailed as well, and no wonder: gasoline is now averaging $2.60 a gallon nationwide, nearly a 39 percent increase from last year. At the same time, natural gas prices are up 60 percent to 90 percent around the country, presaging steep home-heating bills in the months ahead on top of high prices at the pump.
With most other prices relatively tame, consumers could weather the energy squeeze if they had a cushion. They don’t.
Wage gains for most Americans are barely keeping up with inflation. And according to a recent Commerce Department report, Americans, on average, are now saving nothing each month, so they obviously cannot pay higher energy bills by reducing the amount they save.
(20 August 2005)
Soaring petrol prices make farms target for theft
NZPA, New Zealand Herald
Police are warning farmers that the rising cost of petrol could result in thieves targeting rural properties.
A litre of unleaded petrol was selling at $1.44 at the pumps last week, sparking speculation the price may reach $2 a litre by Christmas.
Many farmers have already taken measures to protect their properties, including installing security systems. A Pendarves farmer, sick of thieves targeting a shed on his property, used sugar and soap to spike petrol he knew would be stolen.
(22 August 2005)
Electricity Cut Halts Iraq Oil Exports
AP, CRI Online
Iraq’s oil exports were shut down Monday by a power cut that darkened parts of central and southern Iraq, including the country’s only
functioning oil export terminals.
Exports through the country’s other main route, the northern export pipeline to Turkey, have long been halted by incessant sabotage.
Iraqi officials said sabotage was also responsible for Monday’s blackout, which prevented oil from being pumped into tankers waiting at berths.
Electricity was cut across Baghdad and many parts of Iraq early Monday after an attack on a major electricity feeder line between Beiji, 155
miles north of Baghdad, and the capital.
Government spokesman Laith Kubba said Sunday the attack occurred two days ago and repairs were under way.
(22 August 2005)
Higher gas prices finally curb demand
Celia Lamb, Sacramento Business Journal
California gasoline sales leveled off early this year, probably because people drove less to save money as gas prices shot up. And that was before the average price climbed another 25 cents a gallon, sending the price to more than $3 at some Sacramento stations for the first time. Californians cut their year-over-year gasoline use in the first four months of this year by 0.5 percent, said state Energy Commission spokesman Rob Schlichting, even as the state’s population rose about 1.5 percent. …
“I would say there’s a slight decline in retail gasoline sales,” said Brent Andrews, vice president of InterState Oil Co. of Sacramento. His company supplies fuel to about 150 gas stations, including three owned by the company and 11 with other owners that use the InterState brand name. InterState also supplies fuel for commercial customers through cardlock stations — where drivers use a security card to pay for fuel — and a mobile refueling service. “We haven’t seen a real drop-off there at all,” Andrews said. “Business must continue.” …
Particularly hard hit are businesses that can’t pass on the higher fuel costs, such as processing-tomato growers whose fall crop prices are determined in the spring through contracts with processors, Andrews said.
Higher gas prices may have changed car buyers’ preferences in the first quarter of this year, said Dave Rodgers, general manager and senior vice president of the John L. Sullivan Automotive Group. Toyota Camrys and Corollas and six-cylinder pickups sold well in the first quarter, he said. Hybrid gasoline-electric cars have been so popular that dealerships haven’t been able to keep them in stock.
“Chevrolet Suburbans, Tahoes and full-size (pickup) trucks just were not moving,” he said. Sales of those models rose slightly in the second quarter because of price reductions, he added. “It’s going to take awhile for more fuel-efficient cars to work their way into the system and make a difference” in fuel use, Schlichting said.
(22 August 2005)
