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Indonesia braces for fuel protest
BBC
Indonesia is to mobilise thousands of extra police in the capital Jakarta and other cities to guard against expected protests at fuel price increases.
Petrol and kerosene prices are set to rise sharply on Saturday as the government cuts subsidies to try and tackle a budget crisis. Student groups and unions, who have already staged small protests, vowed bigger events ahead of the increase.
…Indonesia has some of the most generous fuel subsidies in Asia, a throwback to its days as a net oil exporter.
But it now has to import oil, and the sharp rise in oil prices has threatened to overwhelm the government’s budget. Worries about the budget position triggered a sharp drop in the Indonesian currency, the rupiah, last month.
Indonesian President Susilo Bambang Yudhoyono announced the price rises last week, and parliament approved the plan on Tuesday by voting to cap government spending on fuel subsidies at $8.7bn. Some economists estimate the effect of the cap will be to force some fuel prices up by 60%.
(28 September 2005)
Save fuel, but how?
Bush urges conservation, rejects solutions
Editorial, Sacramento Bee
“We can all pitch in … by being better conservers of energy,” President Bush said the other day. In his attempt to set an example, he instructed federal employees to cease all nonessential travel. This, Bush said, is “a way for the federal government to lead when it comes to conservation.”
Rest assured, America. The president has contained the federal bureaucracy in its cubbyholes. Energy is being conserved. Our problems are solved.
It’s enough to make you laugh. Or if you think where this warming world is heading, it’s enough to make you cry.
(28 September 2005)
Conservative conservation
Editorial, LA Times
Its been too long coming, but it’s good to see the Bush administration change from eschewing energy conservation to encouraging it. The administration also deserves praise for outlining steps that the federal government will take to reduce travel and electricity use among its employees, and for looking for ways to increase and diversify refinery capacity.
But it takes sustained leadership to improve the nation’s energy outlook, and on this score President Bush has faltered. From the start, the administration’s policies have shunned the most practical steps for reducing dependence on fossil fuels.
Even now, the president has no long-term plan to reduce energy consumption, and his allies will likely use the hurricanes as an excuse to push for energy exploration in environmentally precious areas. With new foreign competition for a finite supply of oil, this won’t suffice.
(28 September 2005)
It’s a supply-and-demand world
Paul Thornton, LA Times
If all you read about the oil industry was the Wall Street Journal’s lead editorial today, you’d get the impression that energy companies have few friends in Washington.
The Journal editorializes that all the federal government has done since Jimmy Carter’s time is to get in the way of oil companies that simply want to meet increasing U.S. demand for gasoline. It points out that the number of oil refineries in the United States has gone down since 1981, from 325 to 148, despite a 20% increase in demand. The Journal blames mountains of red tape and environmental restrictions that it says keep oil companies from opening new refineries, and it finds a ray of hope in President Bush’s call Monday to increase energy supplies.
But if the Journal is so eager to finger environmental laws, it should also place some of the blame on the oil companies themselves, who have voluntarily shut down many refineries over the years, presumably as a way to increase profits by reducing supply in the face of increasing demand.
But increasing consumption is the problem, the New York Times editorializes today. It says that unless people curtail their use of fossil fuels, we’re only going to see more mega-hurricanes driven by global warming, as numerous scientific journals have pointed out. Vaguely, the Times calls for “aggressive leadership” from the United States.
The Washington Post today is clear on what it wants from Bush — an energy tax. The Post predicts that such a tax would stymie demand, thereby curtailing climactic change, among other things.
(28 September 2005)
Editorial in the Seattle Post-Intelligencer: Energy Consumption: Follow the leader.
Life in the land where filling up an SUV costs $3
Mike Ceaser, The Christian Science Monitor
Venezuelans love paying 10 cents per gallon, but critics warn of economic, environmental impact.
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CARACAS, VENEZUELA – Auto salesman Leonardo Caicedo looked over the shiny Jeep, Chrysler, and Dodge vehicles crowding the showroom in central Caracas, where a gallon of gasoline now costs about the same as a large hen’s egg, and a liter costs less than a single photocopy.
The SUV sales are “excellent,” he said, and customers don’t worry about fuel efficiency, since they can fill their 18-gallon tanks for less than $3.
“It’s good for us, and it’s good for the people so they can buy luxury cars with big engines,” Mr. Caicedo said.
But critics say Venezuela’s highly subsidized gasoline, which retails for between 10 and 15 cents per gallon, and 7 cents for a gallon of diesel, is bad for the country.
Besides feeding perpetual traffic jams and worsening air pollution, they say the subsidy is a multibillion-dollar drain on the national budget, sapping money that could help schools, hospitals, or public transit, and transferring it to the wealthier classes, who own the cars. And they wonder how long leftist President Hugo Chavez can defy economic gravity.
But few public policies here are as popular as is almost-free gasoline.
(28 September 2005)
As Natural Gas Prices Rise, So Do the Costs of Things Made of Chemicals
Claudia H. Deutsch, NY TImes
In one sense, chemical industry executives should be sighing with relief. Hurricane Katrina damaged some of their plants, but repairs are proceeding quickly. Hurricane Rita left barely a physical mark. For the next few months, orders will drop but, the executives say, demand will probably ratchet up quickly as rebuilding along the Gulf Coast begins.
“Net-net, it will be a wash, because our industry’s products will be used to rebuild the devastated areas,” said Andrew N. Liveris, chief executive of the Dow Chemical Company.
But while the industry may have dodged these immediate bullets, a thornier problem still interferes with executive sleep: natural gas prices that have been soaring since 2001.
High prices are a double whammy for the chemical industry. Natural gas is both its main fuel and its main raw material, the starting point for the basic chemicals from which the fibers and compounds in shirts, eyeglasses and even the wrappers for single-serve soups are derived.
“Chemical companies have been under assault for several years,” said Robert Koort, an analyst at Goldman Sachs who has an attractive rating on the chemical sector. Diane H. Gulyas, chief marketing officer of DuPont, said that, if anything, the hurricanes “acted as a wake-up call.”
“It made us all realize how shocking the underlying fundamentals of our business have become,” she said.
The industry has passed along costs, and it is likely to continue doing so for now. Since Katrina, almost every chemical company has announced price increases. The trickledown effect to retail shelves is inevitable – soda and water come in plastic bottles, computers use plastic housings, even organic greenmarkets pack fruits and vegetables in plastic bags.
“Consumers can expect to pay more for everything, from medicines to auto parts to computers to shampoo,” said Kevin Swift, chief economist for the American Chemistry Council, a trade association.
But industry specialists worry that if high gas prices curb consumer spending, the days of passing along constant price increases may end.
(28 September 2005)
What goes up will keep it up
Fuel prices will keep rising as the world’s two biggest sleepers awake to a new era
Ross Gittins, Herald (Australia)
IF YOU’RE upset by the high petrol prices of recent days, you ain’t seen nothin’ yet. Prices are set to stay high and go a lot higher in the coming years – with regular spikes as hurricanes and other supply disruptions come and go. Just how high prices will rise is anyone’s guess.
Petrol prices are just a symptom of something much bigger: the arrival of the industrial revolution – the same one that began in Europe in the early 1800s – in Asia.
We’ve seen poor Asian countries, such as Japan, South Korea, Taiwan, Hong Kong and Singapore, transform themselves into rich countries, but now they’re being joined by China and India.
What makes those two countries special is that they’re the biggest in the world, with populations of 1.3 billion and 1.1 billion representing no less than 37 per cent of the world’s population.
China’s economy has been growing at the rate of 9 per cent a year for a quarter of a century, which means it’s been doubling in size every eight years. India’s growth hasn’t been quite as fast and began only at the start of the ’90s.
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When countries go down the path of rapid industrialisation, they chew up huge quantities of natural resources and energy. At first this is about building transport, power and other infrastructure, factories and offices. Before long it’s also about supplying the appliances, cars and better housing demanded by increasingly affluent consumers.
To some extent the industrialising countries supply their own energy and natural resources, but to a large extent they have to import them. Their economies become huge importers of rural and mineral commodities and huge exporters of manufactured goods.
(28 September 2005)
Smaller Cars Enjoy New Chic
Dealers Notice SUV Demand Dropping Off
Sholnn Freeman, Washington Post
John Mathews of Universal Toyota in San Antonio has witnessed the day that auto industry executives in Detroit said would never come.
“We are seeing people who are driving $40,000 Suburbans trading them in on $15,000 Corollas,” said Mathews, who manages a dealership in a state where big trucks and sport-utility vehicles rule the roads. “The last 30 days have been unlike anything I’ve ever seen in the automotive industry.”
…While small car sales are helping to lift the Japanese automakers, Detroit’s General Motors Corp. and Ford Motor Co. are sinking under the weight of large sport-utility vehicles, once the industry’s cash cows. The two automakers have reported substantial slides in profits in their North American operations this year, and their bonds have junk status on Wall Street. The interest in small cars has caught the two automakers unprepared, said Dave Healy, an auto industry analyst at Burnham Securities Inc. in New York.
For the Big Three, Healy said, investment followed profit margins. “As long as the SUV segment was doing well, they poured money into that and neglected small cars,” Healy said. “At that time you could have made a very good case that it was giving the public what it wants.”
(28 September 2005)
UK: Conservative deputy leader warns hopefuls over energy
BBC News
Conservative deputy leader Michael Ancram has warned those hoping to replace Michael Howard that they are ignoring the issue of energy.
Describing it as Britain’s “greatest crisis”, Mr Ancram told leadership hopefuls energy must be debated.
He said an “energy audit” was necessary with oil and gas reserves
dwindling, and coal and nuclear unpopular.
Britain must consider more nuclear power, alongside increased investment in areas like biofuels, he said.
Mr Ancram – who was forced out of the last leadership race in 2001 at the first hurdle – has not revealed whether he will stand this time.
He said: “It is astonishing that the Conservative leadership campaign has proceeded so far without any real mention of what is almost certainly the greatest crisis facing our citizens in the next generation.”
(24 September 2005)
The hide of the man has to be admired, from a Party that couldn’t burn the North Seas oil and gas bonanza fast enough.-LJ
Australia: $13bn surplus no reason to cut petrol tax: PM
Sydney Morning Herald
[Australian PM John Howard] “Unfortunately, we are going to be stuck with higher petrol prices that we used to have for quite some time into the future,” Mr Howard said.
“I don’t think were going to go back to a the time when the price of petrol was well below $1 a litre, for quite some time, if at all.”
The NRMA yesterday warned that drivers were unlikely to ever see petrol below $1 a litre again, even suggesting that prices of $2 a litre were not beyond the realm of possibility.
(26 September 2005)
