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Alaska Official Quits, 6 Others Follow After Flap with Gov. Over Pipeline
Intelligence Press via Rigzone
Alaska Gov. Frank Murkowski said Thursday Natural Resources Commissioner Tom Irwin agreed to quit his job after questioning the legality of the governor’s negotiations with producers on an agreement for a gas pipeline to the Lower 48 states.
Six other high ranking members of the Department of Natural Resources also quit their jobs after hearing of Irwin’s departure. All six referred in their resignations letters to Irwin’s “dismissal.” Murkowski reached a preliminary agreement with ConocoPhillips on Oct. 21 on the “base fiscal contract terms” of a proposed pipeline deal. He said the preliminary step with ConocoPhillips was “one leg of a three-legged stool — the other two legs being agreements that must be worked out with BP and ExxonMobil for the pipeline contract to move forward.”
However, BP Alaska spokesman Daren Beaudo thought it odd that ConocoPhillips chose to announce a preliminary deal with the state on its own when all three producers still have to sign on the dotted line of a single final agreement. …
(28 October 2005)
The Struggle For Power Post Wilma
Trish Regan, CBS News
Florida Power and Light says it’s restored electricity to 60 percent of the customers who lost power because of Hurricane Wilma. But there are still hundreds of thousands of people in the dark — and utility officials say it could be close to Thanksgiving before power is fully restored.
As some peoples’ lives return to normal, Regan says, others are still struggling for basics. But, the one thing everyone here has in common is this: long waits at the gas pumps.
On Saturday afternoon, motorist Pasha Waters waited at the end of a gas line and she was near the end of her rope.
But the problem isn’t the gas — there’s 190 million gallons of it in Florida ports. The problem is getting the pumps turned on when nearly half of southern Florida is still without electricity.
(30 October 2005)
File under system interdependencies… -AF
US: The End of Pensions
Roger Lowenstein, New York Times Magazine
…Earlier this month, Miller and Delphi gave in to the pressure and sought protection under the bankruptcy code – the largest such filing ever in the auto industry. It followed by a few weeks the Chapter 11 filings of Delta Air Lines and Northwest Airlines, whose pension promises to workers exceeded the assets in their pension funds by an estimated $16 billion.
The three filings have blown the lid off America’s latest, if long-simmering, financial debacle. It is not hedge funds or the real-estate bubble – it is the pension system, both public and private. And it is broken.
…
In effect, America’s pension system has been a laboratory demonstration of moral hazard in which the insurance may end up bankrupting the system it was intended to save. Given that pension promises do not come due for years, it is hardly surprising that corporate executives and state legislators have found it easier to pay off unions with benefits tomorrow rather than with wages today. Since the benefits were insured, union leaders did not much care if the obligations proved excessive.
(30 October 2005)
More reasons to develop (community) self-reliance and curb personal unnecessary consumption. -AF
OPEC urgers oil companies to invest profits in refining
Associated Press
RIMINI, Italy – Oil companies should use profits to increase their refining capacity and help ease pressure on oil prices, an OPEC official said Sunday. “This is a chance for them to invest,” said Adnan Shihab-Eldin, acting secretary-general of the Organization of Petroleum Exporting Countries. Several major oil companies reported surging third-quarter profits this week.
“We’ve been saying this past year that refining has to increase,” Shihab-Eldin said on the sidelines of a conference on long-term issues of energy supply being held in the Italian resort town of Rimini. “There needs to be more refining and upgrading.” …
Asked when global demand for oil could surpass production, Shihab-Eldin said that was a distant prospect. “I think it’s decades away — at least three or four decades,” he said.
(30 October 2005)
U.S. oil industry not likely to heed calls to spend profits on new refineries
Brad Foss, Associated Press via CanadianBusiness.com
WASHINGTON – Don’t expect the oil industry to boost fuel production merely to deflect criticism from Congress about soaring prices and profits.
Energy executives and analysts insist that in spite of the supply crunch that has kept oil above $50 US a barrel for much of the year, demand and prices are still prone to ups and downs, so the industry should not rush to drill wells and expand refineries just because it is flush with cash. “A surplus of supply is not good for the industry,” Shell Oil Co. president John Hofmeister said in an interview Friday. “Just as a surplus of demand is not good for industry. We strive for balance.”
Hofmeister, speaking by telephone from his corporate jet upon leaving Washington, said, “We will continue to work as an industry to increase supplies to the American people.” But he said Shell executives were still debating whether it makes economic sense to expand the capacity of refineries it owns jointly with Saudi Refining Inc. The companies said in September they were considering adding 100,000 to 300,000 barrels per day of capacity to plants in Louisiana and Texas. …
(28 October 2005)
Big Oil earning but isn’t spending
Greg Burns, Chicago Tribune via Seattle Times
CHICAGO — The world’s biggest oil companies are piling up cash faster than they can spend it, sparking a backlash amid sky-high gasoline and heating-fuel prices. On Friday, Chevron became the last of the Big Five to join the industry’s third-quarter-earnings boom, with its $3.6 billion bringing the group’s total take for the three-month period to a staggering $33 billion.
The oil industry’s profit gusher is angering motorists and homeowners who think they’re being gouged, prompting some congressional critics to propose seizing the windfall altogether. Yet beyond the strong emotions it provokes, the stockpiling of megabucks in oil-industry coffers may be signaling a downbeat trend in the economy. While U.S. consumers and the federal government have been spending more than they have on hand, companies over the past five years have quietly amassed substantial surpluses. Corporate decision-makers have found nowhere to spend all their profits without taking on what they consider imprudent risks.
By failing to make productive investments while they’re flush with cash, businesses could be setting the stage for slower growth in the future. At the same time, they have indirectly encouraged an unsustainable housing boom by making more credit available at low interest rates, some economists say. …
Another dilemma for the oil giants is the inaccessibility of proven resources. Everyone knows Iraq has oil, and Russia, too, but the private sector won’t be pursuing those fields freely for obvious political reasons. Besides, most of the world’s oil and gas remains in the hands of states doing their own business, such as Saudi Arabia. …
(29 October 2005)
The real story behind ExxonMobil’s 10 billion dollar profit
Jerome a Paris, Daily Kos
Many of you have heard that ExxonMobil managed a 100 billion dollar turnover and a 10 billion dollar profit (a 75% increase) in the last quarter, and several of you have vented about these astronomical numbers, price gouging and the like. Today, Shell announced equally stupendous results, with a 9 billion dollar profit, up 68%.
I’d like to make the point that these numbers hide the fact that the industry is now in decline, and that the big oil majors are small, weakening players.
(28 October 2005)
‘$US70 oil will cost Australia billions’ – report
AAP via Australian Financial Review
Tens of billions of dollars will be knocked off the Australian economy if oil prices move up towards the $US70 a barrel mark next year, a new ABARE study has found.
The Australian Bureau of Agricultural and Resource Economics [a federal govt. agency], in a report into the impact of higher oil prices on the Asia-Pacific region, found 0.3 per cent of gross national product would be lost if oil averaged about $US70 a barrel next year. If it stayed around that level until 2010, GNP would drop 0.8 per cent, or more than $60 billion. The situation would be substantially worse if oil hit the $US85 a barrel mark. GNP would be cut 0.6 per cent next year and 1.2 per cent by 2010.
Still, the bureau found the effect would probably be lower in Australia than the rest of the region because higher oil prices should put upward pressure on key exports such as LNG and coal. “For a net gas and coal exporter such as Australia, increased export earnings from gas and coal exports partially offset the impact of higher oil prices on the Australian economy, reducing the negative impact on economic growth by a third.” …
The biggest winner would be Vietnam where GNP should increase 2.2 per cent next year and 4.6 per cent by 2010 with oil at $US70 a barrel. …
The bureau also examined the impact of higher oil prices on the development and introduction of hybrid fuel technology. It found hybrid fuel use would grow substantially, which in turn would reduce the demand for oil. “Substantial adoption of hybrid vehicle technology could slow the growth of petroleum consumption in the transport sectors of APEC economies by nine per cent over the next decade,” Dr Fisher said.
The full free ABARE report can be found here.
(31 October 2005)
Sudan forms panel to share oil wealth with former rebel SPLM
Sudan Tribune
KHARTOUM — President Omar al-Beshir established a commission Sunday that will draw up the country’s oil policy to provide an equal share of the wealth to the country’s former southern rebels.
The commission was set up under a January peace agreement that ended Africa’s longest war. The official Sudan News Agency (SUNA) said al-Beshir also set up an evaluation commission to monitor implementation of the peace agreement during a six-year interim period.
The peace accord, signed by the government and the former southern rebels of the Sudan People’s Liberation Movement, provides for an autonomous south with its own army, government and a new constitution during that interim period. It ended a 21-year civil war between the mostly Muslim north and the Christian and animist south that left about 2 million people dead. After the six-year interim period, the 10 southern states will hold a referendum on independence.
The oil commission will be co-chaired by al-Beshir and the president of the southern Sudan government. It is to include equal numbers of representatives from both the national government and the southern government and oil producing states of Sudan. SUNA said el-Bashir will also form other commissions called for by the agreement, including a national commission for elections and a human rights commission
(30 October 2005)
Mozambique – Scientific Energy Council Established
Agencia de Informacao de Mocambique (Maputo) via AllAfrica.com
Maputo – The continuing rise in the price of petroleum products makes it crucial for Mozambique to investigate other sources of energy, declared the Minister of Science and Technology, Venancio Massingue, in Maputo on Monday.
Speaking at a ceremony where members of a new body, the Scientific Energy Council, were sworn into office, Massingue said “Energy is a fundamental resource for the country’s development. The current world context of systematic increases in the price of liquid fuels makes it crucial to discover and consolidate new forms of energy – such as solar, wind and geothermal power”. …
Among the basic tasks of the Council are to draw up a strategic vision for scientific and technological development in all matters concerning energy, and to identify promising research areas that could have a major impact on sustainable development and poverty reduction.
(31 October 2005)
