Vermont poised to get discounted oil from Venezuela - Boston Globe
Low income Vermonters would benefit from discounted Venezuelan fuel oil this winter in a deal being arranged by Vermont's independent Rep. Bernard Sanders. An agreement is expected to be announced next week that would bring the discounted oil to the state. "Our expectation right now is we expect to bring at least several million gallons of discounted oil into Vermont and we expect to announce the details next week," said Sanders' spokeswoman Erin Campbell. The deal would be similar to agreements Venezuela and the government controlled Citgo oil company reached recently with Maine and Rhode Island. Parts of Massachusetts and New York City have also benefited from Venezuela's offer. "The bottom line is this should translate into a savings of several million dollars for the people of Vermont," Campbell said. In November, Venezuela's Citgo Petroleum Corp. announced a program that makes available home heating oil at a 40 percent discount to cold weather states. Fuel oil prices this month average $2.45 a gallon, up about 50 cents from a year ago. Some critics of the agreement say Venezuelan President Hugo Chavez is using the deal as a way to embarrass President Bush. Republican Gov. James Douglas supports the proposal. "The governor's first priority is the lowest-cost home heating options we can provide to Vermonters," Douglas spokesman Jason Gibbs said recently. "The political situation and demagoguery we'll leave to others."
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World can't afford to lose Iran's oil: US EIA chief - Reuters
A disruption in Iran's crude oil exports because of a dispute over that country's nuclear program would affect an already tight global oil market and lead to higher petroleum prices, the head of the U.S. Energy Information Administration warned on Tuesday. "The market is so tightly balanced, clearly, we can't afford to lose a large supply of crude to the market," EIA chief Guy Caruso told Reuters in an interview. Even though the United States does not directly import Iranian crude, Caruso said a cutoff of Iran's oil would affect the U.S. market because other countries that buy Iranian crude would compete with America to find new supplies. "It's a fungible world oil market, and any disruption in supply affects everyone, because the price would go up for everyone," he said. Caruso declined to say whether a disruption of Iran's oil exports would have an impact significant enough to spike oil prices to $100 a barrel. "I wouldn't want to speculate on that. Hopefully (the nuclear dispute) would be resolved without any disruption of supply," he said.
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Iran flags oil price squeeze - Melbourne Herald Sun
Iran's radical Islamic leadership has made a possible first move in its campaign to wield oil as a weapon in its nuclear fuel row with the West. Iran yesterday said it wanted the OPEC oil cartel to drop production in the first quarter of 2006, which is likely to put more pressure on prices. Iran is OPEC's second biggest producer. Iran earlier said it was not scared of being hauled before the UN Security Council and warned any sanctions over its disputed nuclear program could cause an unexpected rise in oil prices. World oil users were bracing for the possibility of prices hitting $US100-a-barrel if Iran turns off its exports. Iran provoked further outrage by announcing it would host a special scientific conference to examine evidence about the World War II Holocaust -- an event that President Mahmoud Ahmadinejad has described as a myth. Senior officials from Britain, Europe and the US were to meet overnight with their Chinese and Russian counterparts to try to form a united front against Iran. The meeting comes as fresh reports emerged that Iran could possibly build a nuclear weapon within three years. Israel would never accept a nuclear-armed Iran and Mr Ahmadinejad has called for the Jewish state to be wiped off the face of the earth. In the US, two senior lawmakers have publicly raised the possibility of military strikes against Iran's nuclear centres. Republican Senator John McCain and Democrat Senator Evan Bayh referred to a possible last-resort attack if Iran did not end the program. An exhaustive process would have to be followed through the UN and the International Atomic Energy Agency before any pre-emptive military action would be permitted. According to fresh intelligence cited in Britain's Daily Telegraph newspaper, Iranian scientists are about to start enriching tonnes of uranium. Iran insists that its nuclear program is for energy production only, but many observers are not so sure given Iran has one of the world's biggest reserves of oil. Much of the work is being undertaken at the previously secret nuclear centre at Natanz about 160km northeast of the capital Tehran. Iran's leadership decided last week to remove IAEA seals and resume research at the plant. One senior western intelligence officer quoted by the Telegraph said Iran had spent 20 years acquiring the materials to build nuclear weapons. The challenge for intelligence agencies after the Iraq weapons of mass destruction debacle will be to persuade people that their information is sound.
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The Saudis May Have Enough Oil - Newsweek
Oil doomsayers have a lot of material from which to spin conspiracy theories, since several big oil countries are secretive about their reserves, which they consider a matter of national security. Recently, oil expert Matthew Simmons accused Saudi Arabia of inflating the size of its proven oil reserves—at about 260 billion barrels, the largest in the world. Simmons claims the largest Saudi fields are in decline, with no new ones big enough to replace them. His book "Twilight in the Desert" argues that Saudi Arabia is about to run out of oil. And that is just the latest gloomy oil vision, including forecasts of prices of more than $100 a barrel. Every 20th-century energy crisis has inspired such forecasts and awakened politicians to act, or at least to claim to act. This time around several leaders of oil-consuming countries have urged producers to be more transparent—in the words of British Chancellor of the Exchequer Gordon Brown, to "open their books." What they hope for is detail far beyond the aggregate estimates of national reserves that OPEC nations now provide: geological and economic data on specific fields, exploration results and other technical details, better if certified by international auditors. The politicians' assumption seems to be that open books will clear up the uncertainties and doomsday forecasts that are helping drive up prices. This amounts to a grandstanding demand for information that does not exist, not in truly reliable form, and will not be forthcoming anyway. Most producing countries consider such requests a threat to their sovereignty and security. Estimating oil reserves is still an unsolved mystery, with several different disciplines and approaches. Even the most serious analyses can vary widely, on both the gross size of a given reservoir and the amount of oil that can be economically recovered in the near future, given existing technologies and prices. Most large producers say that it would be useless to open their books, because their political enemies would always have room to contest the data anyway. The accusation that the Saudis are inflating their reserves is based largely on an old tale. Between 1984 and 1988, the five largest Persian Gulf oil countries—led by Saudi Arabia—raised estimates of proven oil reserves by 40 percent, or a total of 237 billion barrels. The hikes are generally seen as tactical moves in a struggle to obtain higher production quotas within the OPEC cartel. Since then, the producing nations haven't substantially lowered those estimates, despite all the oil they have been pumping. The implication the doomsayers draw is that OPEC reserve estimates must be increasingly inflated. Yet the original revisions came after many OPEC countries nationalized the concessions of the big Western oil companies, which had capped output to keep prices high. The oil companies consistently underestimated reserves in order to resist pressure from their host countries to raise output and revenue. All the OPEC countries did in the late '80s was to adopt more realistic estimates. Nor is it surprising that the estimates have remained stable since: rising prices allow producers to shift more oil into the category of economically accessible reserves, and most Persian Gulf states have invested in exploration at a rate designed to replace existing reserves. The skeptics take for granted that big oil states are thoroughly explored, which is not the case. From 1995 to 2004, fewer than 30 new wildcat [exploration] wells were drilled in Saudi Arabia, compared with more than 15,700 in the United States. The numbers are similar throughout the Persian Gulf. This state makes plausible the recent Saudi response to its accusers: Oil Minister Ali Al-Naimi said estimates of Saudi "original oil"—the broadest definition of reserves, including proven, probable and possible future reserves—could rise in coming decades to 900 billion barrels, up from 200 billion, due largely to improving recovery technology. And the U.S. Geological Survey's estimate of Saudi Arabia's unexplored reserves is higher than Riyadh's. If anything, the Saudis may be underestimating their reserves. But releasing more detailed numbers won't clarify the reality, or end the controversy.
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