Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Steve Forbes contradicts oil price claim in latest investor newsletter
Kerry Nettle, press release (Australia)
Greens Senator Kerry Nettle today accused Steve Forbes, host of the CEO conference at the Opera House, of playing deceptive games with the Australian public over oil price claims.
Steve Forbes told the Prime Minister and media on Tuesday that oil prices will come back down to around $35 a barrel within a year, and that high prices are a speculation ‘bubble’. Overnight his investor newsletter has advised the opposite.
The subscriber only Forbes Professional Timing Service states:
“THE MOST IMPORTANT ADVICE I HAVE GIVEN IN 20 YEARS”
“expect to see crude move to $65.00 this summer and to $76.00 by early next year.”
“..the so-called terror premium in crude prices – which will remain until we see at least three years of peace in the fertile crescent”.
And,
“We are at the point where the rubber hits the road, and the only rationing mechanism for whomever gets the available supply will be higher prices.”
(1 September 2005)
Let Katrina Be a Warning
John Carey, Business Week
Here’s what the hurricane can teach about handling natural disasters and energy policy better
————
It is a natural disaster of unprecedented proportions for America. But the irony and the tragedy of the killer storm called Katrina is that the hurricane’s devastating effects were entirely predictable — and largely preventable.
Engineers have known for years that New Orleans levees couldn’t withstand anything above a Category 3 hurricane. Ecologists had long warned that the loss of protective barrier islands and coastal wetlands made everything along the Gulf Coast, from refineries to vacation homes, far more vulnerable to major storms.
Scientists have been learning that, for whatever reasons, hurricanes have become more destructive over the past 30 years. And with the world’s oil-producing and gasoline-refining capabilities strained, it has been clear that storm-related damage to the highly concentrated Gulf Coast energy industry could be hugely disruptive to the nation’s oil, gasoline, and natural gas supplies.
HELPFUL PROGRAMS ERODED. Yet not only have these warnings gone largely unheeded but for years government policies have been putting the country at a greater risk of both natural disasters and energy shocks. Along the Gulf, “we’ve had a tremendously irresponsible policy, destroying protective natural features while encouraging risky and precarious development,” says Frederick Krimgold, director of Virginia Tech’s disaster risk reduction program. And although Congress passed an energy bill in August, it does almost nothing to solve the problems exposed by Katrina.
The major lesson policymakers should draw from the catastrophe is just how vulnerable the U.S. is becoming to natural disasters and energy disruptions. In fact, some experts say, Americans have been mistakenly lulled into thinking terrorism is the most pressing threat — and they argue that the relentless focus on staving off suicide bombers has left crucial gaps elsewhere.
(1 September 2005)
Hard hitting commentary from Business Week. Recommended by Dave Roberts at Gristmill.
Economy Was Showing Strain Before Storm
Jennifer Bayot, NY Times
Rising energy prices were taking their toll on businesses and consumers even before Hurricane Katrina struck the Gulf Coast’s oil rigs and refineries, industry surveys and government data showed yesterday.
“Business is extremely strong, but energy volatility is playing havoc with planning and pricing scenarios,” the survey quoted a chemical industry supply manager as saying.
Now the energy-related concerns that have been clouding the economy over the summer could loom much larger in the weeks to come, economists said.
“Even before the hurricane hit, rising energy prices were having a dampening effect on the economy,” said Nariman Behravesh, chief economist of Global Insight, an economic research firm in Lexington, Mass. “And so you have to believe that after the hurricane, with energy prices going even higher, that this could create serious problems for the economy, especially in the next three months.
“The higher energy costs will put a squeeze on both businesses and households. They’re spending so much on energy – the households on gasoline, the airlines on jet fuel, for example – that they’ll have to curtail elsewhere.”
(2 September 2005)
Big Oil’s Bigtime Looting
Derrick Z. Jackson, Boston Globe
President Bush yesterday told ABC-TV, ”there ought to be zero tolerance of people breaking the law during an emergency such as this, whether it be looting or price-gouging at the gasoline pump or taking advantage of charitable giving or insurance fraud.”
Zero tolerance is meaningless when the White House lets the biggest looters of Hurricane Katrina walk off with billions of dollars.
…No such sympathy is to be extended to big oil. The nation has on its hands a disaster so profound that we have not even begun to seriously count the bodies in the floodwaters. It brings us as close as we may get in our lifetime to places like Bangladesh.
New Orleans is under martial law and will not return to normal for years. Members of the Red Cross, the Coast Guard, the National Guard, police agencies, and firefighters are sacrificing time and risking lives to save lives. Texas is opening up its school systems for homeless Louisiana children. Generous food wholesalers are giving away their stocks to passersby. The Astrodome is taking in the refugees of the Superdome.
In the midst of this charity, big oil looted the nation. The pumps instantly shot past $3 a gallon, with $4 a gallon well in sight.
In a thinly disguised attempt to act as if it cared about the people wading in the water, Chevron has pledged $5 million to relief efforts. ExxonMobil and Shell have pledged $2 million apiece. British Petroleum and Citgo have pledged $1 million each.
This is nothing next to their wealth. Of the world’s seven most profitable corporations, four are ExxonMobil, Royal Dutch Shell, BP, and Chevron. ExxonMobil is the world’s most profitable company, making $25.3 billion last year. It and the other three corporations had combined profits last year of $72.8 billion. ExxonMobil is also the world’s most valuable company, with a market value, according to Forbes magazine, of $405 billion. The combined market value of ExxonMobil, BP, Royal Dutch Shell, and Chevron is nearly $1 trillion.
(2 September 2005)
The Real Gas Gougers
John Nichols, The Nation
How convenient for the oil industry that Hurricane Katrina hit just before the traditional Labor Day-weekend hike in gas prices. Now, instead of having to fake up some absolutely absurd excuse for jacking up gas prices, the industry can try and dupe Americans into thinking that they are suddenly paying $3.25 a gallon because of a storm.
The oil industry’s response to Katrina has provided a reminder of why it is so exceptionally profitable.
Even before a start had been made on assessing the damage caused by the tropical storm, energy corporations were cashing in. And every indication is that they plan to continue doing so–perhaps taking prices over the $4-a-gallon mark, according to James DiGeorgia, editor and publisher of the Gold & Energy Advisor and author of The Global War for Oil.
No one debates the fact that the hurricane has done significant damage to oil rigs, refineries and delivery systems along the Gulf Coast, a region that accounts for roughly 10 percent of US refining capacity. But roughly 90 percent of US refining capacity remains fully functional and, it should not be forgotten, the US has not stopped importing oil.
(2 September 2005)
£1 litre looms as US oil firms target European fuel supplies
Carl Mortished, London Times
THE economic damage from Hurricane Katrina will soon be felt in Britain with petrol prices possibly soaring as high as £1 per litre.
Flood-damaged American oil companies are expected to turn to European refineries for alternative supplies of road fuel, forcing up the price of petrol and diesel in Britain.
(1 September 2005)
Fadel Gheit on the rapid rise in gas prices (AUDIO)
Ian Masters, Background Briefing
Radio Interview: Fadel Gheit on the rapid rise in gas prices, which he sees resulting from a “perfect storm” of factors, but most primarily George Bush and his ill-conceived and prosecuted war on Iraq. Gheit also criticizes Bush on his manner of dealing with Venezuela and how he has destabilized the Middle East on which the world depends for energy, seeing Saudi Arabia as increasingly vulnerable.
Mr. Gheit was described in a New York Times profile published last Friday as “an elder statesman among oil analysts,” with more than 30 years of experience in oil and gas research and analysis.
(28 August 2005)
