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India: Left threatens protest against oil price hike
Business Standard
New Delhi – Prime Minister Manmohan Singh seems to have got only partial success in his efforts to secure the endorsement of the Left parties for a petroleum and diesel price hike, as the Left parties announced today that the government had not acted on their directions on the issue and therefore they were launching a countrywide protest against the hike.
In what was seen as an attempt to persuade the Left parties into agreeing to an oil price hike – which the government for some time has been saying is inevitable – Prime Minister Manmohan Singh met Left leaders last evening and nudged CPI leader AB Bardhan into virtually admitting after the meeting, that the government had been forced to raise prices. Thus, it was made to look like the Left had reluctantly but willingly endorsed the move.
The Left today tried to cover up its track by announcing vigorous protests against the move. “This move could have been avoided if the government had listened to alternate suggestions given by the Left parties. It is a small mercy that LPG and kerosene, which are the fuel of the poorer and middle classes, have been spared,” the CPI said in a release.
The party warned that the increase in diesel prices will have a cascading effect on prices all round.
(7 September 2005)
India and Indonesia react to oil price rises
Shawn Donnan, Anita Jain and Farhan Bokhari, Financial Times
India on Tuesday made a long-awaited move to increase retail prices of diesel and petrol. Indonesian officials also indicated they were considering bringing their own price rise forward to as early as October 1, following disappointment in financial markets over a vague plan unveiled last week.
The shift by two of Asia’s biggest economies signals the growing impact of high oil prices on the region and the heavy cost being borne by governments that subsidise fuel prices.
The president of the Asian Development Bank on Tuesday said it was critical for all countries in the region to phase out subsidies on petroleum products.
In an interview with the Financial Times in Islamabad, Haruhiko Kuroda also warned that developing countries in the region needed to improve energy efficiency and develop alternatives to oil such as hydro-electricity or risk losing economic momentum in the face of high global oil prices.
India’s move on Tuesday to raise retail diesel and petrol prices by 7 per cent in spite of opposition from Communist members of the cabinet of Manmohan Singh, prime minister came after a similar rise in June.
But JPMorgan warned the increase was less than half what was needed to bring India’s fuel prices in line with international benchmarks and would bring ongoing pressure on state oil companies.
(6 September 2005)
Eurozone ‘at risk from oil price shock’
Ralph Atkins, Financial times
The eurozone economy is suffering chronically weak demand, is more vulnerable than the US to an oil price shock, and could be at risk from deflation, the Organisation for Economic Co-operation and Development warned yesterday.
In his latest global economic assessment, Jean-Philippe Cotis, the OECD’s chief economist, said signs of a pick-up in European economic activity could not be described as “anything other than a technical recovery at this stage”, although some recent German investment data had been more encouraging. Monetary policy needed to be “highly accommodative”, he said.
(7 September 2005)
US warns China on Iran oil
Reuters, Financial Express
China will be increasingly in conflict with the United States if it continues to pursue energy deals with countries like Iran and is unlikely to gain the energy security it seeks, a senior US official said on Tuesday.
Deputy Secretary of State Robert Zoellick said he was not sure how much of Beijing’s energy drive was propelled by new Chinese oil companies or by a government “strategic plan.”
But he told a group of reporters it was unlikely that Beijing could guarantee its own energy security through contracts with countries which Washington and other states consider troublesome “because you can’t lock up energy resources” in a global marketplace.
(7 September 2005)
As has been demonstrated with Iraq’s pre-invasion contracts with China, Russia and a number of European countries.-LJ
Is Castro Still Relevant?
Jeff Vail, A Theory of Power
I’m reminded of the classic Monty Python lines: “Look, I’m being repressed! See the violence inherent in the system.” But seriously, is this Cold War-era holdout still a relevant force in today’s world? Yes, and here’s why:
Cuba offered 1,100 doctors to help out with the relief effort after Hurricane Katrina, that could have been in place last Wednesday. The US State Department said “no thanks.” Sure, we could construe this as political manuevering on Castro’s part, but he has accepted US post-hurricane aid in the past few years, so that argument doesn’t hold much water. This is the same Castro who is dealing remarkably well with the huge loss of subsidy from the former USSR, and is on the cutting edge of adapting to a post-peak oil world. Is he a repressive and autocratic figure? Sure. Is he turning away a thousand desparately needed doctors because he thinks that politics take priority over the welfare of poor, black people? No, but the US government is.
…Castro and Chavez are relevant, and a significant threat to Bush, Kerry & Bros. because they represent an alternative. An alternative solution to government, to economics, to peak oil, etc. Do I think that they are necessarily an example that we should adopt? No, but the very existence and visibility of a real alternative is potentially devastating to our system that pretends that our only “choice” is between Republicans and Democrats…
(6 September 2005)
UK: Organisers of the 2000 fuel protest, which caused severe disruption when refineries were blocked, say they will act again if fuel tax is not cut.
BBC
Fuel Lobby made the announcement as the price of unleaded petrol rose to more than £1 a litre in parts of the UK as a result of Hurricane Katrina.
The group says all UK refineries will be blocked from 0600 BST on 14 September unless price cuts are made. The Treasury said cutting tax would not solve the problem of high oil prices.
A week-long campaign of picketing refineries and depots by thousands of hauliers and farmers in 2000 caused major shortages and was thought to
have cost British business £1bn.
There was panic buying of fuel and even food during the week-long protest.
(7 September 2005)
For an account of the 2000 fuel blockades from a Peak Oil perspective, see Norman Church’s article
Systems, Interdependencies & Peak Oil on the PowerSwitch website.
The story of a hurricane
Dale Allen Pfeiffer, Online Journal
This is the story of how a storm brewed in the Atlantic Ocean could spell the end of the most powerful nation in recorded history. It is a story that will continue long after the storm that started it has lost all of its fury. It is the story of untold tragedy and destruction. And it is a story that would have been totally unnecessary, had we simply acted more responsibly in the past.
On August 29, 2005, Hurricane Katrina came ashore east of New Orleans, and forever changed the history of the United States.
Dale Allen Pfeiffer is a geologist, a novelist, and a science journalist. He has written extensively on Peak Oil and the North American Natural Gas Cliff. His published works include “The End of the Oil Age” (nonfiction) and “Giants in Their Steps” (fiction).
(7 September 2005)
A long view from the left.
Amnesty Accuses Oil Firms of Overriding Human Rights
Ewen MacAskill, Guardian
…A consortium of western oil companies, led by ExxonMobil, has drawn up legal agreements with African governments that potentially override the human rights of the local populations, according to a report published today by Amnesty International.
The agreements relate to a 665-mile pipeline running from the Doba oilfields in Chad to the Atlantic terminal at Kribi in Cameroon.
Andrea Shemberg, an Amnesty legal adviser, said: “The ExxonMobil-led consortium that operates the pipeline is effectively sidestepping the rule of law in Chad and in Cameroon. Human rights are not negotiable items that companies and governments are permitted to eliminate by contract.” ExxonMobil rejected the accusations, insisting that the company has a record of condemning human rights violations.
Amnesty’s 54-page report claims the agreements could require Chad and Cameroon to give precedence to the interests of the oil companies over the rights of those living near the pipeline or oilfields. Both governments could face financial penalties if they interrupt the workings of the oilfields or pipelines.
Amnesty expressed concern that the ambiguity of such legal contracts – known as host country agreements – create dangerous precedents.
(7 September 2005)
India’s appetite for energy is unlikely to be curbed soon
Professor Sumit Ganguly, rediff.com
Professor Sumit Ganguly, Professor of Political Science and Director of the India Studies Program Indiana University, Bloomington, made this speech as an expert witness at a Senate panel hearing convened by Senator Richard Lugar on the energy needs of India and China and its implications for the US. He was recently named head of the CIA’s South Asia arm.
Without external prodding, however, it is unlikely that India’s policy makers will tackle the structural problems of the SEBs [State Electricity Boards]. Domestic politics plays too great a role in the electricity sector. To that end the United States could influence major multilateral lending institutions to stipulate that all further investments in the Indian power sector conform to market norms.
…Apart from investing in and upgrading its nuclear infrastructure, India will have to continue to tap its substantial coal reserves. Interestingly, this sector offers another important avenue for India-US cooperation.
Indian coal is extremely high in ash content and thereby highly polluting. The United States has developed clean-coal technology that could be used to alleviate the environmental effects of this crucial source of energy, and this technology should be made commercially available to India.
…The rapidly expanding Indian energy market offers substantial opportunities for India-US cooperation. Much of this cooperation could be accomplished under the aegis of the newly initiated India-US Energy Dialogue.
India’s appetite for energy is unlikely to be curbed anytime soon. That said, it lacks the necessary technological expertise, financial resources, and global reach to address its energy needs. Cooperating with the United States in a gamut of energy-related projects offers the possibility of addressing these critical needs.
(6 September 2005)
Gives a flavor of current CIA analysis and recommendations: mostly globalization and market solutions. No mention of global warming or peak oil. -BA
Senate doesn’t agree on next step for steep gas prices
Jim Landers, Knight Ridder via The Daily Item (Pennsylvania)
WASHINGTON — Senators singed by constituent anger over high gasoline prices took little comfort Tuesday in forecasts that record gasoline prices would recede, instead voicing support for price controls, windfall profits rebates and crackdowns on gouging.
But there was little agreement on a next step, if any.
Pump prices should drop to an average $2.60 a gallon this quarter and fall another 20 cents next year, Guy Caruso, administrator of the federal Energy Information Administration, told a hearing of the Senate’s Energy and Natural Resources Committee.
The estimates came from the Energy Department’s short-term energy outlook that will be published Wednesday.
Average gasoline prices increased 45 cents a gallon last week, according to Robert Darbenel of the AAA.
Most committee members said the spike in prices demanded a government response, but found it hard to agree on what that should be.
(7 September 2005)
US: Lawmakers Want Government to Hold Down Gas Prices
Vikas Bajaj, NY Times (?) via EnergyResources
Even as gasoline prices dipped today and appeared to stabilize, although at a relatively high level, lawmakers and consumers nationwide increased their calls for a host of government interventions to punish “profiteers,” reduce taxes and institute price caps.
In Washington, a Senate committee held the first of two hearings on gasoline prices, which scaled $3 a gallon last week after Hurricane Katrina severely disrupted the nation’s energy supply system, and officials from several states said they were taking forceful measures to investigate “unconscionable” price increases.
(6 September 2005)
US economy takes big hit
Hurricane Katrina is not likely to trigger a recession, but oil disruption hurts
Mark Trumbull, The Christian Science Monitor
As devastating storms go, hurricane Katrina has packed an unusually big punch to the United States economy.
Though the full impact of the Aug. 29 superstorm is still being assessed, the economic brunt differs in at least three major ways from a typical recovery led by armies of insurance adjusters bearing clipboards and checkbooks.
• A region’s major city has been entirely displaced, throwing hundreds of thousands of people out of work and casting doubt on the financial future of New Orleans itself.
• The movement of goods through America’s heartland has been disrupted, with key ports still closed and the channel of the Mississippi narrowed by the storm.
• Oil and gas drilling platforms, refineries, and pipelines are damaged, and some will take months to bring back on line.
The result is a barrage of challenges likely to affect everything from the US unemployment rate to winter heating costs for months to come. The typical forecast now is for slowing growth rather than outright recession.
With unprecedented prices at gasoline pumps and an unprecedented humanitarian crisis fast rippling outward, the deeper worry is that Katrina’s aftereffects could erode consumer confidence.
“That’s what we’re very concerned about,” says Robert Dye of Economy.com. “This is really an unprecedented event.”
American consumers have consistently surprised economists in recent years with their buoyancy amid rising debts and difficult job markets. That could happen again, but evidence was mounting even before Katrina that consumer confidence may be weakening in the face of high gasoline prices. The red-hot housing market shows signs of cooling, for example, as “for sale” signs stay up longer in some cities and demand for home mortgages shrinks.
(7 September 2005)
$3.41
Stirling Newberry, The Blogging of the President
That is the current price at the Mobil station at Drum Hill Rotary in Chelmsford MA. It is above the $3.24 lowest price reported by the gas widget which is now the number one apple download. While Katrina has, indeed, caused a squeeze, let’s not kid ourselves, all she has done is accelerate by one or two years what was coming. The market will adjust means “you’ll just pay more, sucker.” The median price from this list is $3.33 as I write.
Realize that every time you fill up you are paying a gas tax for the tax cuts others have gotten. The money that the rich got back from the government, they have used to push the price of gasoline up. Economies always adjust. For example, when rebels blow up an oil pipeline and halt northern oil exports.
…While hackonomics writers routinely genuflect to Mt. 1982 and say “oil is well below its inflation adjusted peak” they are incorrect. They adjust oil for CPI. This is a number which tells us interesting things, but not what the real cost of oil is. Oil is an input, the two numbers which make sense are oil in producer dollars – that is adjusted for PPI (from the BLS, same place you get CPI numbers) and for the GDP deflator – which contrary to its name is the measure of total economy inflation.
The Fed uses it rather than CPI for this reason. Oil adjusted for GDP deflator peaked at about $82.70 per barrel – there is some error because the last GDP deflator number is from June, and there has certainly been some inflation since then. If one splines in the quarter numbers both sides it comes out to $82.67. Oil closed at a peak of just short of $70, which means that we are short of the peaks of 1980 and 1919, but not much short.
Gasoline can be adjusted for CPI sensibly – that is how much pain it is causing the consumer. Adjusting for CPI gasoline peaked at a real price of $3.63 in my area. Which means that we are one bad bounce away from that number
(4 September 2005)
Recommended by MOBJECTIVIST.
Australia’s retail petrol discounting war intenssifies
Harvey Norman joins fuel discounters
Tracy Lee, Australian Financial Review
Harvey Norman has entered the fuel discounting fray by offering petrol vouchers for as much as $500 to customers who buy certain goods from its
latest catalogue.
The retailer joined Caltex Australia with its Starcash promotion over the weekend, hoping consumers will be enticed to continue opening their wallets at a time when oil has surged to $US70 a barrel and fuel costs are eating into the discretionary spending for most families.
The move comes as retail giants Woolworths and Coles intensify their battle to win customers by offering special fuel deals.
Last week, Woolworths announced a joint venture with Visa that offers an 8¢ a litre discount on fuel when consumers use their Visa cards and shopping dockets to buy petrol in NSW and Queensland. It matches the Coles-MasterCard “source card” deal launched in June.
Independent grocery chain IGA, backed by wholesaler Metcash, offers a 4¢ a litre discount on shopping bills over $30, but it is not tied to any specific petrol provider.
(6 September 2005)
