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Tillerson Says `Nationality of Energy’ Is Irrelevant
Joe Carroll and Sonja Franklin, Bloomberg
Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said energy independence for the U.S. and other industrialized countries is impossible, and diverse sources of oil are needed to soften the impact of supply disruptions.
“The nationality of energy is irrelevant,” Tillerson, who heads the world’s largest oil company, said today during a panel discussion on global energy security in Calgary. “A diversity of sources mitigates the impact on total supply from disruptions in any region or from any one source.”
Political leaders from U.S. President George W. Bush to Democratic Senator and presidential candidate Hillary Clinton have called for speedier development of domestic energy supplies such as ethanol to reduce reliance on oil from countries such as Nigeria and Saudi Arabia. Tillerson said energy independence would be counterproductive.
Eschewing oil imports would lead to protectionism and isolationism, said Tillerson, 55. “History shows this approach is often counterproductive, leads to inefficiencies, higher prices, supply shortages and at times even trade wars,” he said.
(7 September 2007)
In France, energy control becomes patriotic
Carl Mortished, Globe & Mail
LONDON — The battlefield is almost ready for the French President’s first collision with Brussels, and Nicolas Sarkozy has prepared his artillery to deliver the first barrage. The weaponry is impressive: a €90-billion ($129-billion) cannon made of the merger of two massive utilities, Gaz de France and Suez. Alongside it, an older but even more impressive gun, Électricité de France, and still in the development stage is Areva, the nuclear power engineering firm.
This conflict is about energy and markets, about competition, state intervention and industrial policy. The European Commission wants to rip apart the continent’s giant utilities, force them to divest the networks of pipelines and power grids that allow incumbent firms to maintain their grip on customers and markets.
…Market power is the issue: French gas markets were formally opened to free competition at the beginning of July, allowing consumers to freely choose a supplier. There is, however, precious little evidence of new suppliers making inroads. …
Neither Germany nor France want full unbundling. It’s not just nationalism and fear of labour unions. Both countries lack domestic energy resources and Germany is utterly dependent on Russian gas. Separation of the pipeline networks would weaken the incumbent national utility, leaving it exposed to foreign competition. Precisely, Ms. Kroes says, but, in the political mindset in Paris and Berlin, a powerful national energy player is the only real security against bullying from dominant foreign suppliers. Without Gaz de France, Mr. Sarkozy thinks, who would stand up to Gazprom?
(6 September 2007)
With the prospect of dwindling energy supplies, energy security trumps low prices, and nationalism prevails over globalization. -BA
US pays the price of relying on foes for oil
Irwin Stelzer, UK Times
…Opec, the cartel of most of the world’s oil producers, meets in Vienna on Tuesday. Every indication is that the producers will refuse the request of consuming countries to open the spigots so as to bring down oil prices. “You cannot convince any member to add more crude to the market,” Abdalla el-Badri, Opec secretary-general, told the press.
Venezuela can’t: its production is sinking as Hugo Chávez replaces Petróleos de Venezuela’s highly regarded technocrats with political hacks. He wants more for each barrel he produces, especially if high prices threaten American prosperity. Iran, suffering from falling output as the American embargo denies the country the know-how and equipment needed to update facilities, is also a price hawk.
The key player, Saudi Arabia, will talk the talk of moderation and friendship to the West, then whine that prices are already down from their summer peak, that a slowing American economy will reduce the demand for oil, and that the weaker dollar means the kingdom is getting less real purchasing power for its oil. Unsaid is the fact that the Saudis need the money to fund the lives of thousands of indolent princes, and the terrorist madrasas it continues to finance.
Best of all, Opec now knows that it can count on Vladimir Putin to help it in two ways – one intentional, the other unintentional….
In short, there is little likelihood that any of the major producers will permit the foreign investment they need to step up production sufficiently to make a significant dent in the current price of oil.
…Any downward pressure on prices will have to come from a reduction in the demand for traditional petroleum. A recession would accomplish such a cutback, but that is neither likely nor a goal of American and European policy.
…So the most likely scenario is for oil prices to stay high, with an upward jiggle when a hurricane threatens offshore facilities, and a downward move when inventories temporarily rise. The good news is that in the long run this will discourage demand, and encourage efficiency and alternative fuels. Meanwhile, the American economy remains dependent on its enemies for its fuel, its politicians refuse to take meaningful steps to reduce that dependence, and America sleeps.
Irwin Stelzer is a business adviser and director of economic policy studies at the Hudson Institute
(9 September 2007)
Another salvo in the conflict among U.S. conservatives between those who favor globalized oil supplies (e.g. oil companies) and who lean towards energy independence (those who worry about the political implications and the cost in live and military expenses.) -BA
In the name of Oil
Reza Zarabi, Jerusalem Post
From the myriad of evils that the Middle East has come to know, no other entity has ever been such a vice, such a tool for the disenfranchisement and vitiation of such an eclectic group of peoples as the curse that is oil.
What initially swayed the Bedouin to exchange his camel and nomadic garb for a newly acquired Mercedes-Benz, Rolex watch, and Armani Shoes, all the while cleaving to the medieval Islamic mores that were deemed convenient to retain, has created vicious systems of autocracy that not only impose their dogmatic will on their respective societies but has produced a reality where the average citizen has become solely dependant on the state.
…Generation after generation, this cycle is able to repeat itself by reason of mankind’s thirst for oil. The possession of this commodity or even geographical proximity to nations who own this natural resource has enabled tyrants to consolidate absolute power and virtually eradicate all domestic opposition to their rule, so long as Western interests are addressed and the Islamic Socialism of each oil-rich nation tends to the basic and only the basic needs of their citizenry.
The billions of dollars that flow into the coffers of the House of Saud, the Persian Gulf Sheikdoms, or the Islamic Republic hierarchy is seldom trickled down to their respective populations. Furthermore, adjacent nations like Egypt and Jordan, who are oddly lionized by the American government as being “model states”, receive an abundance of US foreign aid, VIP access to the latest military technology, and are granted ‘Most Favored Nation’ trading status while their individual populations are rarely the recipients of such benefits.
Coming to terms with this dynamic explains how a region that has been endowed with the most sought after resource in the history of mankind has also the world’s highest exodus of human capital.
…There is nothing inherent in the peoples of the Middle East to impede upon their quest for reaching economic prosperity. A nominal understanding of the Iranian and Arab Diasporas clearly manifests their potential. The overwhelming majority is highly educated, assimilated, and affluent. After all, it was an Iranian who invented EBay and now one is currently the mayor of Beverly Hills. It is an Arab who owns the famous Harrods in London and the Ritz in Paris.
If given the opportunity, each population could easily emulate the economic success of nations such as Germany, Britain, Japan, Israel, China, or India.
…Simply put, the dilemma is that Western and Chinese energy consumption and the security concerns of all Middle Eastern tyrants have merged. All of these despots have their purpose and irrespective of whose interests they serve, it is seldom, if ever, the welfare of their own citizens. The West could care less if the average Saudi woman is treated like a mule in her own country or if journalists suspected of anti-Mubarak sentiments are tortured in Egyptian political prisons. As long as oil shipments are uninterrupted, the social and political plight of the average Iranian is irrelevant to loyal petroleum customers such as China and India.
If it were not for this highly sought commodity, the role of America in this troubled region would be virtually non-existent.
(5 September 2007)
A variant of the “The Curse of Oil” theme. -BA
Gazprom pushes Exxon to drop China export plans
Isabel Gorst, Financial Times via MSNBC
Gazprom, the Russian state-controlled gas giant, stepped up pressure on the ExxonMobil-led Sakhalin group to abandon plans to export natural gas to China on Tuesday, saying gas was required by domestic consumers.
Vladimir Kozlov, the head of Gazprom’s Sakhalin office, said, “Russia’s position as a partner in the production sharing contract is that Sakhalin-1 must prioritize the needs of Khabarovsk, Primorsk and Sakhalin regions”.
All gas production from the Sakhalin-2 project, where Gazprom bought a stake last year, had already been sold under long term contracts, he said.
(4 September 2007)
Iraq Oil: The Vultures are Waiting
Sarah Meyer, Index Resarch
The oil majors met at the Iraq Oil, Gas, Petrochemical & Electricity Summit from 2 – 4 September 2007 in Dubai to discuss “the future of Iraq’s abundant energy resources.” Attending were US puppets, described as “some of the most important figures from Iraq’s energy sector.” Also attending were the waiting vultures, BP, Exxon, ConocoPhillips, Chevron, Lukoil, Statoil, Marathon Oil, Total, Shell, Kuwait National Petroleum, Annadarko, Schlumberger, ABB, ONGC, General Electric, Cummins Power, Mitsui, Aegis, ArmorGroup, Janussian, Control Risks Group, Unity, Hart, Olive Security, GardaWorld and Triple Canopy.
The history of the Iraq Oil law is sordid.
(3 September 2007)
Long article with many excerpts/links about Iraq and oil.
