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Canada warns US of major oil deal with China
Carl Mortished, Times of London via The Daily Journal (Venezuela)
Canada has warned the Bush administration that massive oil reserves in Alberta could be exported to China if the U.S. government refuses to climb down in a trade dispute over Canadian timber exports to the U.S.
Canada’s Natural Resources Minister, John McCallum, raised the trade tension with Washington over the weekend with claims that exports of crude oil to China from Alberta oil sands deposits could reach 450,000 barrels per day within six years.
McCallum said that he had meetings last week in Beijing with China National Petroleum Corporation and CNOOC, who both expressed strong interest in investing in oil sands. “Clearly they are ambitious in their thinking. They are definitely interested.”
A Canadian pipeline company is already planning the oil export route, a $3.4 billion steel pipe linking Edmonton in Alberta with a terminal at Kitimat on the Pacific coast. In theory, the oil from the Albertan sands could head south to California but Petro-China, which is owned by China National, has already signed a preliminary deal to take 200,000 barrels per day across the Pacific. Canada’s energetic courting of Chinese oil investors is being seen as part of an attempt to force trade protectionists in Washington to bring down tariff barriers imposed on some $6 billion of Canadian timber imports.
The U.S. has ignored two rulings by North American Free Trade Agreement panels that the tariffs are illegal.
(? October 2005)
Welcome confirmation of date of story &/or link to same on Times website – seems this story is only of interest to Venezuelans (?!).-LJ
S. America Goes Nationalist With Oil, Gas
Natalie Obiko Pearson, Associated Press via Yahoo
CARACAS, Venezuela – Protesters in Ecuador have dynamited oil pipelines, a Bolivian presidential candidate says he wants to seize private gas fields, and Venezuela is threatening to kick out any foreign oil companies that won’t submit to more state control.
For international oil companies like BP PLC and Exxon Mobil Corp. and their customers, who used to look to South America for stable supplies, this powerful wave of nationalist sentiment comes at a particularly bad time.
Tight supplies worldwide already have driven oil prices close to record highs, and while the nationalist swing is unlikely to further escalate prices unless it curtails oil production or exports, it’s heightening risk in a region that once was willing to offer much more to attract foreign investment, experts say.
(13 October 2005)
China courts Latin nations in quest for raw materials
Jane Bussey, Knight Ridder Newspapers via Seattle Times
From the Chinese-made Virgin of Guadalupe statues hawked in Mexico City to the bulk carriers loaded with South American copper steaming toward the Chinese port of Quingdao, the ties that bind Latin economies to the rest of the world no longer run just north-south.
China’s burgeoning appetite for raw materials and quest for export markets has sparked a boom in south-south trade, as the world’s fastest-growing developing country courts its Latin American counterparts, engendering both anticipation and alarm. While China is hungry for Latin America’s raw materials, it also has the potential to eat into Latin countries’ markets for their own products in the industrialized world.
“We feel very vulnerable,” said Roberto Giannetti da Fonseca, director of the foreign-trade department of the powerful Federation of Industries in Brazil’s São Paulo state. In the past five years, China’s trade with Latin America has grown at an annual rate of 42 percent, reaching nearly $22 billion last year. …
(16 October 2005)
China aims to reduce dependence on oil imports
Robert Delaney and Tian Ying, Bloomberg via Business Report
Beijing – China, the second-largest oil user after the US, would adjust taxes, promote fuel-efficient cars and develop alternative energy sources to reduce oil demand and lessen dependence on imports, finance minister Jin Renqing said yesterday.
China aimed to become “mainly reliant” on its own resources, Jin said at a briefing at the conclusion of the Group of 20 nations meeting near Beijing.
“We will adopt proper fiscal and taxation measures to encourage energy conservation and develop energy substitutes.” …
(17 October 2005)
Waiting for the Petrodollars to Trickle Down
Eduardo Porter, NY Times
REMEMBER petrodollars, those oil riches that sloshed around the world after the price of crude soared in the 1970’s and 1980’s? Well, they’re back.
As oil prices have charged ahead, the United States and other oil importers have transferred hundreds of billions of dollars to oil exporting countries like Saudi Arabia and Venezuela. What these countries do with their new wealth could have substantial implications for the American economy.
The petrodollar stash is enormous. According to estimates by the International Monetary Fund, oil export revenues of Middle Eastern countries will reach nearly $400 billion this year.
On an inflation-adjusted basis, that is double the amount of those revenues in 1980, when oil prices surged after Ayatollah Khomeini came to power in Iran, and more than three times the figure of 1974, when the price of crude spiked after the Arab oil embargo.
This time around, it’s not just Arab countries that are making a lot of money from oil, but also countries like Mexico, Russia and Canada.
(16 October 2005)
A well-oiled machine
Big Ag nervous about energy costs
Tom Philpott , Gristmill
Big Ag is nervous about energy costs. The hand-wringing reveals much about the energy-intensive nature of industrial agriculture — and its lack of imagination regarding alternatives.
Even before the latest big runup in oil prices — incidentally, oil had reached $60 per barrel before Hurricane Katrina trashed the Gulf of Mexico — farmers were feeling the pinch. Here’s an Associated Press article from May laying out the energy story in terms dictated by the American Farm Bureau Federation, which not inaccurately calls itself “the voice of agriculture.” It has only forgotten to add a few compound modifiers: vast-scale, heavily subsidized, export-minded energy-intensive agriculture.
The AP article cites a Farm Bureau economist complaining that high oil prices will add about 10 percent to farmers’ costs this year, or about $3 billion.
…What, then, is the Farm Bureau’s agenda for addressing the American farm’s exorbitant energy bill, and for increasing energy efficiency?
It has none. According to the group’s Website, its energy agenda includes urging the government to raid the Alaskan National Wildlife Reserve, supporting ludicrous government ethanol subsidies, and opposing “excessive” automobile fuel-economy standards.
Clearly, our food system is wholly reliant on cheap energy. But what happens if and when the age of cheap energy ends?
(17 October 2005)
Aviation presses claim to fuel priority
Helen Massy-Beresford, Flight International
Consultant calls on automobile industry to become more energy effcient to safeguard oil stocks for aircraft
———–
The air transport industry must put pressure on automotive manufacturers to introduce fuel-efficient road vehicles to ensure security of fuel supply for air transport, says a report by consultancy Meridian International Research.
While the air transport industry is the most sensitive to rising oil prices, technology to allow it to drastically reduce fossil fuel consumption is not yet developed. However, fuel-efficient motor vehicle technologies are much more advanced, and in some cases are already being introduced.
“The air transport industry cannot easily reduce oil consumption – except by grounding aircraft. Air transport is too important to the functioning of the world to allow that,” says William Tahil, research director at Meridian, an independent strategy research and technology consultancy based in France.
The introduction of plug-in hybrid and battery-powered electric road vehicles would take the pressure off fossil-fuel supplies and allow time for biojet fuel to become a feasible option to replace part of the 230 billion litres of jet fuel that are burned worldwide each year, the report says.
…The International Air Transport Association’s chief economist Brian Pearce predicts that as clean coal, renewable and hydrogen power generation technologies gain ground, oil demand will fall in the long-term. “That will leave plenty of oil left to refine jet fuel until the next aircraft fuel comes along. Meanwhile, the industry will continue improving fuel efficiency and investing R&D into alternative energy sources,” he says.
The “peak oil” theory – that oil production will reach a peak and then decline, with the peak year known only once it has passed – is “a serious issue”, Pearce says. “However, even if no additional oil reserves are discovered, at current rates of consumption there are 40 years of oil left, which should give the world time to develop new energy sources.
(11 October 2005)
White House backs plan to shut Hub energy office
Critics fear closure could hinder grants
Michael Kranish, Boston Globe
WASHINGTON — The Bush administration has endorsed a Senate plan to close the Boston regional office of the US Department of Energy, which distributed tens of millions of dollars last year to help low-income New Englanders make their homes more energy-efficient.
Though New Englanders would continue to be eligible for DOE grants, elected officials as well as the nonprofit agencies that administer the grant programs expressed concern that closing the Boston office would make it more difficult for local groups to apply for conservation grants, which they then distribute to eligible homeowners.
(14 October 2005)
Is the Energy Rout Over?
Michael J. DesLauriers, Resource Investor
TORONTO (.com) – In light of the recent correction in oil prices and energy related plays, it makes sense to take a step back and re-examine the fundamentals. What has really changed? Is the bull over? Is the U.S. economy headed for a recession?
The truth is that not much has changed at all, except for the fact that energy shares are now not nearly as far ahead of themselves as they were two weeks ago, with the TSX Energy Index having corrected just over 20% from its recent high to Thursday’s lows. …
What most people seem to forget or overlook in the race to the door, is that oil companies are making a tonne of money at $60 oil and even at $55 and $50 oil. Like anything else, if Peak Oil exists and prices are indeed headed to $100/barrel its not going to happen right away, nor will prices move up in a straight line. Moreover, the real move will come on the back of real supply/demand fundamentals, not short term supply shocks like a hurricane.
(15 October 2005)
Energy bubble may be ready to pop
Monica Perin, Houston Business Journal via American Business Journals
Most Houstonians are all too familiar with the up-and-down cycles of the oil industry.
And now that oil and gas prices have been on an upward track for 13 straight years, some experts are predicting that the peak of the cycle and a downturn could be near at hand.
(17 October 2005)
The article makes the case for a drop in oil prices and views it with alarm — since it would be bad for the energy industry.
Small Oil finds risks in Iraq are irresistible
Heather Timmons, The New York Times
The very risk and uncertainty that has made the international oil companies wary of going into Iraq has attracted tiny, aggressive engineering, drilling and contracting firms to the country.
“Like any market, people will take opportunities where they can,” said Norman Davidson Kelly, the president of Tigris Petroleum, which is working on two projects in Iraq, including an evaluation of fields in the Missan Province, in southeastern Iraq, with Royal Dutch Shell and BHP Billiton. …
But while Iraq represents an irresistible opportunity for these small companies – and their interest may even help stabilize the country’s faltering oil production – they are not enough, politicians and oil experts say. Without billions of dollars in investment from international conglomerates, Iraq looks poised to miss out on the biggest oil boom in decades. …
Oil production in Iraq has declined to less than two million barrels a day in August from 2.6 million barrels a day in January 2003, and little improvement is expected through next year. The country expects “refining and production to continue to be constrained through 2005 and 2006, to say the least,” Thamir Ghadban, a former Iraqi oil minister, told industry executives at a conference in London last month. The industry needs some $20 billion in investment over the next five or six years to improve production alone, he said. Many experts do not anticipate a sizable increase in Iraq’s oil production until the end of this decade.
Rather than earning money from its oil fields, Iraq is being forced to spend about $250 million a month to import oil products like gasoline, and diverting money pegged for repairs to increase security. Sabotage, faulty repairs and insufficient oversight and investment in projects are the biggest factors in the decline in production. …
(13 October 2005)
Gloom as UK oil reserves run dry
Dan Atkinson, This is Money (UK)
BRITAIN’S 30-year oil bonanza is about to end, new figures show. Within four years, the UK will become a net importer for the first time since the Seventies.
Between 2002 and 2004, the positive balance of trade in oil dived by nearly 70%, from £5.74bn to £1.73bn. That means the margin of exports of British oil over imports is becoming ever-thinner. This year looks even weaker, with net earnings in the first half of just under £1bn against £1.24bn during the first half of last year.
…Environmental policy analyst David Fleming said: ‘This is really the squeeze. It is being repeated around the world as oilfields decline.’ Booming demand at home has accelerated the decline of Britain’s decades-long positive balance in oil trading and brought closer the day when the UK will again have to rely on imports.
The last era of import-dependence culminated in the energy crisis of 1973-74, when a fourfold increase in the crude price plunged the economy into turmoil.
(16 October 2005)
Jump in sea freight costs chokes barley export
Michael East, FarmOnline (Australia)
Economic booms in China and Russia, coupled with a drop in the total world production of barley, would normally be enough for Australian barley producers to crack open the champagne. However, the celebratory drinks have quickly turned into a nasty hangover, with the expected increase in demand for malt barley offset by sharp increases in sea freight costs. This has created a virtual stalemate between producers and Chinese malting companies, with the current market too expensive for export markets.
Sea freight to China has increased by $US10 a tonne in the past month, to $US38/t.
With this week’s cash prices for malt barley in Australia remaining stable at $185/t to $190/t (port), Chinese companies are finding it unfeasible to import Australian produce. The cash price for malt barley increased $5/t to $10/t last week.
Market analysts, however, said this was made void by the historically high sea freight rates, expected to last a further two years.
Despite all its procrastination, China is now facing the prospect of a stock shortage, meaning one side will have to give in to the other’s demands. GrainCorp manager of coarse grains desk, Ole Houe, warned if malt barley prices pushed up $15/t, China would simply begin purchasing from the European Union (EU).
SOURCE: Extract from grains markets report in The Land, NSW, October 13
(13 October 2005)
Cleaner, Greener And Richer
Alternative energy sources may be answer to poor nations’ energy needs
Chris Flavin and Molly Hull Aeck, TomPaine.com
Affordable energy services are among the essential ingredients of economic development, including eradication of extreme poverty as called for in the United Nations Millennium Development Goals (MDGs).
Meeting these energy needs economically and sustainably requires a balanced energy portfolio that is suited to the economic, social and resource conditions of individual countries and regions. Today, the Renewable Energy Policy Network for the 21st Century (REN21) released a report concluding that in many circumstances, renewable energy sources such as wind, solar, hydro, geothermal and bioenergy have an important role to play, alongside fossil fuels, in an energy portfolio that supports achievement of the MDGs. …
Christopher Flavin is president and Molly Hull Aeck is renewable energy program manager at the Worldwatch Institute.
(15 September 2005)
