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Heavy sales fuel petrol protest fears
Mark Oliver and agencies, Guardian
The prospect of fuel protests later this week was rising today, with some retailers reporting “heavy trading” at the pumps in recent days.
Some motorists stocked up in anxiety at the possibility of shortages, although industry figures stressed there were no current supply problems.
The People’s Fuel Lobby, a key organiser behind the fuel protests and refinery blockades that caused chaos in 2000, is threatening to hold three days of protests this week, starting from 6am on Wednesday.
The group has demanded talks with the government by tomorrow and threatened action unless the Treasury cuts fuel duties.
At this stage, industry analysts have said that they are not expecting the kind of widespread shortages of five years ago. However, the government is said to be treating the threat seriously with petrol prices rising in the past few months by 20% and some filling stations now charging £1 a litre for unleaded.
The Fuel Lobby group said last night that it had extended its original threat of a one-day protest on Wednesday to a three-day protest as support for the campaign grew.
(12 September 2005)
Related story at The Telegraph.
Katrina spurs new debate on energy
Congress seen debating more stringent fuel-economy rules
Associated Press via MSNBC
WASHINGTON – Hurricane Katrina has reopened a national debate on energy policy, generating new congressional support for more stringent automobile fuel economy requirements and a fresh push by the oil industry for drilling in areas now off-limits.
Just over a month after President Bush signed into law a massive energy bill, lawmakers are talking about the need for a second one. If it emerges from Congress, it will carry the stamp of Katrina and the vulnerabilities the storm exposed to the nation’s energy system.
“Hurricane Katrina exposed the harsh reality that we have been skating on thin ice when it comes to this country’s energy concentrations on the Gulf Coast,” said Sen. Pete Domenici, R-N.M., chairman of the Senate Energy Committee and an architect of the energy legislation passed this summer.
(12 September 2005)
Storm Stretches Refiners Past a Perilous Point
Jad Mouawad, NY Times
For the nation’s oil refiners, Hurricane Katrina was a disaster long in the making.
Analysts and industry executives had for years feared the consequences of a storm ramming into the country’s largest energy hub – a complex infrastructure that spans most of the coastline between Texas and Alabama, where nearly half of the nation’s refineries are located.
Hurricane Katrina confirmed the worst predictions. Wreaking havoc along the coastal states, drowning New Orleans and leaving many dead, the storm shut down nearly all the gulf’s offshore oil and gas production for over a week. Racing to restore operations, the industry has brought about 60 percent of that back.
But even more crucially, it knocked off a dozen refineries at the peak of summer demand, sending oil prices higher and gasoline prices to inflation-adjusted records.
The events of the last two weeks have demonstrated how close to the edge the country’s refining system had been operating, even before the storm. Because the last American refinery was built nearly 30 years ago – with only a single new one now in the works – the problem is unlikely to disappear quickly.
…But even as oil and gas production returns in the gulf, the time that it will take refineries to get back to full speed will be a key factor in determining how long product prices will remain elevated.
Under normal conditions, because of the close proximity of volatile materials, high pressure and fire, restarting a refinery is a dangerous process that can take anywhere between three to seven days.
…Most Americans now pay more than $3 a gallon for gasoline – matching inflation-adjusted highs reached after the Iranian revolution in the late 1970’s and early 1980’s and the equivalent, on a per-barrel basis, to $126. Oil prices, which touched a high of $70.85 a barrel last week, now trade around $64 a barrel, still about $20 short of the record set in 1981.
(11 September 2005)
Jad Mouawad has been doing great reporting for the NY Times on energy issues. He’s especially good at give background and history for the current situation. -BA
Energy Ideas, Good and Bad
Editorial, NY Times
Congress has bounded back into post-Katrina Washington full of ideas about controlling gasoline prices and improving the energy picture generally. Some make sense and some are colossally bad.
In the latter category is the notion that consumers would be better off if the government acted by fiat, imposing price controls on gasoline or suspending gas taxes. A lot of otherwise level-headed people have spoken sympathetically about one or the other, including Senators Carl Levin, Maria Cantwell, Jon Corzine and Charles Schumer.
They might not like what might well happen: a sudden and unhealthy spike in consumption, gas lines and, in effect, rationing. Artificially low prices caused by caps or tax relief would encourage people to buy more gas when they should be curbing demand, as the market is telling them to do. The gas stays affordable, but there is less of it.
Sure, everyone wants to make things better. But it is hard to see how to do that in the long run by doing the wrong things now. And as a matter of leadership, pandering to consumers squanders an opportunity to educate people on the need for sacrifice, just when a major crisis has presumably made them more open to change.
Speaking of change, a growing number of senators now seem open to requiring better fuel economy standards for automobiles. Chief among the converts is Pete Domenici, the Senate’s most influential Republican on energy matters. Mr. Domenici seems a bit remorseful that the energy bill he helped steer through Congress this summer did nothing to improve fuel economy, the swiftest way to reduce oil demand and, in time, prices.
Mr. Domenici would also ask the oil companies to increase refinery capacity. This is a good idea. A completely new refinery has not been built in this country for nearly 40 years, which means supplies are tight and prices high.
More controversially, Mr. Domenici will press to open the outer continental shelf off America’s coast to oil and gas drilling. Katrina has given new life generally to those who operate on the mistaken assumption that we can drill our way out of oil dependency and high prices. The only sure relief will come through improved fuel efficiency.
(11 September 2005)
High Diesel Prices Yield Bumper Crop of Thieves
Ronald D. White, LA Times
On moonlit nights when farms in the Central Valley grow quiet, the rustlers step out of the shadows, just as they did in the Old West.
But nowadays, their quarry isn’t cattle. It’s diesel fuel.
On a recent morning, almond grower Scott Hunter ventured into the predawn darkness to discover that rustlers had made off with 900 gallons of diesel worth more than $2,700. It was the fourth time in recent months that thieves had raided the tanks at Hunter’s Merced County farm.
To keep the thieves out, Hunter had installed chain-link fences, razor wire and bunkerlike concrete structures around his fuel pumps. But they cut a hole through his fence, escaping with the diesel.
Diesel prices hovered around $3.25 a gallon last week, $1.11 more than at the same time last year, according to the U.S. Energy Department.
Authorities say these record fuel prices have resulted in brazen diesel rustling from trucks and tanks in many rural areas of the state — especially unguarded farms in the Central Valley.
Other kinds of fuel thefts are increasing. Many people are rushing to buy locking gas caps after reports that motorists were siphoning gasoline from neighbors’ cars
(12 September 2005)
Commodity Strategists: Oil May Average $93 in 2007
Ian McKinnon, Bloomberg
Oil may average $84 a barrel next year, $93 in 2007, and $100 in the fourth quarter of 2007, as demand outpaces supply, Canadian Imperial Bank of Commerce’s chief economist said, jumping ahead of other analysts who are trying to catch up with surging prices.
Rising consumption in China is straining supplies, and damage from Hurricane Katrina to Gulf of Mexico facilities will delay new oil projects in addition to cutting output now, Canadian Imperial’s Jeffrey Rubin wrote in a Sept. 7 report. Global supply will be as much as 2.4 million barrels below projected demand by 2007, and the gap will only be closed as rising prices slow demand growth, Rubin wrote.
(9 September 2005)
Face down the protests
Larry Elliott, Guardian
Caving in to fuel blockades would be an act of real folly. It’s time for the smack of firm government
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…Third, if the idea of the protest is to bring down the cost of motoring then it is doomed to failure. The reason prices have been going up – in every country, not just Britain – is that global demand has been strong and the supply of refined petroleum products has not been able to keep up. Hurricane Katrina has merely intensified a recent trend by knocking out 10% of America’s refining capacity. Even the threat of a blockade has prompted panic buying, and this will lead only to higher prices.
…Finally, surrendering to the protests would be the worst form of short-termism. Tony Blair has used Britain’s presidency of the G8 this year to highlight the risks to our common future from global warming – and the government has committed itself to cutting greenhouse-gas emissions in order to meet its obligations under the Kyoto agreement. In the light of that, it would be an act of supreme folly to take measures that would further increase demand for petrol and diesel.
(13 September 2005)
Ageing North Sea not helped enough by $60 oil
Simon Webb and Margaret Orgill, Reuters
ABERDEEN – A late-life exploration boom sparked by crude prices over $60 will not be enough by itself to slow the long term decline of UK North Sea oil and gas output. Much more investment is needed to alleviate the drop in production from the sector, with its rusting infrastructure and aging staff, executives and analysts say.
Oil output in the region peaked six years ago and declined at 10 percent per year in 2003-2004. At current decline rates, platform and pipeline closures may mean small oil and gas fields that have yet to be tapped will be left intact, as there will be no economical way of getting production to market.
(12 September 2005)
Related story:
North Sea Faces Shortage of Drilling Rigs, Engineers
