| Israel seeks pipeline for Iraqi oil (The Observer)
(...)US intelligence sources confirmed to The Observer that the project has been discussed. One former senior CIA official said: 'It has long been a dream of a powerful section of the people now driving this administration [of President George W. Bush] and the war in Iraq to safeguard Israel's energy supply as well as that of the United States.
'The Haifa pipeline was something that existed, was resurrected as a dream and is now a viable project - albeit with a lot of building to do.'
The editor-in-chief of the Middle East Economic Review , Walid Khadduri, says in the current issue of Jane's Foreign Report that 'there's not a metre of it left, at least in Arab territory'.
To resurrect the pipeline would need the backing of whatever government the US is to put in place in Iraq, and has been discussed - according to Western diplomatic sources - with the US-sponsored Iraqi National Congress and its leader Ahmed Chalabi, the former banker favoured by the Pentagon for a powerful role in the war's aftermath.
Sources at the State Department said that concluding a peace treaty with Israel is to be 'top of the agenda' for a new Iraqi government, and Chalabi is known to have discussed Iraq's recognition of the state of Israel.
The pipeline would also require permission from Jordan. Paritzky's Ministry is believed to have approached officials in Amman on 9 April this year. Sources told Ha'aretz that the talks left Israel 'optimistic'.
James Akins, a former US ambassador to the region and one of America's leading Arabists, said: 'There would be a fee for transit rights through Jordan, just as there would be fees for Israel from those using what would be the Haifa terminal.
'After all, this is a new world order now. This is what things look like particularly if we wipe out Syria. It just goes to show that it is all about oil, for the United States and its ally.'
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| OPEC's oil output cut smaller than expected (Sydney Morning Herald)
OPEC has surprised the oil market by announcing a smaller-than-expected reduction in output.
Although the Organisation of Petroleum Exporting Countries said after an emergency meeting in Vienna that it would cut back supply to bolster prices amid sluggish demand, it simultaneously raised its official production ceiling to legitimise much of the excess output that members provided during the war in Iraq.
"The quota was on holiday," said OPEC president Abdullah al-Attiyah. "Now we are taking physical oil from the market."
Although oil prices fell after the announcement, as traders concluded that supplies would not tighten as much as some had feared, prices later rebounded.
In New York, crude oil for June delivery fell 1c, to $US26.64 a barrel.
OPEC said it would reduce production to a temporary limit of 25.4 million barrels a day starting June 1. While the group said that would remove 2 million barrels a day from the world market, its estimate of current output of 27.4 million barrels a day is higher than outside experts' calculations.
Many had expected OPEC to announce that it would simply abide by its previous quota of 24.5 million barrels a day, set in January. Thus the reduction may be less than advertised.
"This is known as OPEC math," said Axel Busch, of the Energy Intelligence Group in London. "OPEC has proved once again its ability to turn a straightforward policy decision into a confusing muddle."
OPEC members had breached their official production limits during the war to keep markets supplied and to prevent a damaging spike in prices. But, with the main fighting over, the global economy sluggish and the prospect of an eventual return of Iraqi oil to the market, the group was growing concerned about a possible glut.
Mr Attiyah said the new production level, about a third of the world's oil consumption, might be temporary and would be reviewed at the group's next meeting, on June 11.
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| Iraq Is the X-Factor at OPEC (Los Angeles Times)
The official invitation was sent to former Iraqi Oil Minister Amir Rashid, known to U.S. troops as the Six of Spades.
But Rashid, one of 52 "most-wanted" Iraqis whose faces festoon Pentagon-issued playing cards, is not expected to attend this week's emergency meeting of the Organization of Petroleum Exporting Countries. Neither is anyone else representing the owners of the world's second-biggest oil reserves.
For the 11 nations of OPEC, the end of the war in Iraq is the beginning of the new petroleum order. Members may soon feel compelled to start cutting back their own production to make room for Iraq's return to the market. But when OPEC oil ministers gather Thursday in Vienna to try to keep oil prices from collapsing, the plans of the most talked-about member nation will likely remain a big unknown.
"It's chaos now in Iraq. The government is a vacuum," said Issam Al-Chalabi, who ran Iraq's state oil company and served as Saddam Hussein's oil minister in the 1980s. "No one would dare to go" to the OPEC gathering.
The lack of dialogue between postwar authorities in Iraq and the rest of the oil-producing world may fuel suspicions that the United States intends to use its influence to ratchet up production, flood the market and force prices down.
Crude oil prices already have come down from their prewar high of nearly $38 a barrel. But after falling to $27 after the war began, the price has climbed and was just under $31 in New York trading Monday. That's higher than the price has been for most of the last two years.
With the war's quick end, some OPEC members fear that the resumption of Iraqi exports could glut the market, driving prices below $20. But many economists argue that it's premature for OPEC to lower production, with the global economy in a fragile state and the summer driving season approaching in North America. In California, gasoline prices have just started declining after soaring above $2 a gallon recently.
Some in the petroleum industry think the Bush administration wants Iraq to abandon OPEC or become a second major swing producer, diminishing Saudi Arabia's market clout. Their anxiety has been heightened by the comments of some who advocate short-term U.S. control of Iraq's petroleum production and eventual privatization of its oil industry.
But those concerns will have to wait, experts say, because right now, the United States has more pressing priorities.
"There are so many immediate concerns that the issue of Iraq and its OPEC quota is a real down-the-road problem," said Daniel Yergin, chairman of Cambridge Energy Research Associates. "Much more important than what happens with Iraq and OPEC is what happens with Iraq and the United Nations. That is the great uncertainty that hangs over the resumption of oil exports."
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| Iraqi oil wells not so profitable (Hi Pakistan)
Any discussion of the post-war reconstruction of Iraq quickly turns
to the country's potential oil revenues. Even the US administration has indicated that
Iraq's oil wealth can pay the bill for the war's aftermath. But most oil analysts consider this
idea an illusion. With 15.1 billion tons, Iraq has the third-largest oil reserves in the world
after Saudi Arabia and Canada but its contribution to global oil supplies has been modest in
recent years. Under the United Nations embargo Iraq was only allowed to export a limited amount
of oil and could make no investments in facilities. At last count, the country's dilapidated
equipment was producing just a little over two million barrels a day, about half as much as 12
years ago. This level of production cannot be repeated in the near future. "It will take at least
five years for the country to get back up to the amount of oil production it had before the invasion
of Kuwait," said Klaus Matthies of Germany's World Economic Archives (HWWA). To reach even this
goal, tremendous resources must be pumped into rebuilding the Iraqi oil industry. "Against the
backdrop of enormous reserves, Iraq is the one country in the Middle East with the least
exploration," said the German Energy Information Service (EID). Estimates for the necessary
investment volume vary from 30 to 90 billion dollars in the next few years, depending on how
quickly and to what extent oil production is increased. "It will at any rate be very costly,"
said Matthies. It is also unclear who is expected to foot the bill. UN Secretary General Kofi
Annan still has access to a fund of $14 billion in Iraqi oil revenues earmarked for humanitarian
purposes. The country's national debt is over $100 billion. Aid payments from industrialized
countries are to be funnelled into other infrastructure projects such as roads, schools,
hospitals and ports. "The only ones who will be able to invest are the international petroleum
companies," said a spokesman for US oil giant ExxonMobil.
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Left turn: 'Revolution' hits Venezuela's oil culture (Christian Science Monitor)
At the gleaming offices of Petroleos de Venezuela (PDVSA), the country's state-owned oil giant, a corporate revolution is under way. Nine-to-fivers have come to think of themselves as patriots. Senior managers now eat at the same cafeteria tables as secretaries. And former soldiers have left the battlefield for the boardroom.
After PDVSA workers walked off the job last December in a bid to force Venezuelan President Hugo Chávez from office, the fiery populist hitched his social revolution to the $110 billion business: He purged the company's ranks and installed his own people. What was widely regarded as a world-class energy company before the strike has a new philosophy: to help the poor. And a new corporate culture is gradually taking shape, injected with the president's particular brand of leftist ideology.
Whether or not this do-good idealism can prevail amid the high-pressure realities of running the world's fifth-largest oil supplier remains to be seen. For a country that relies on PDVSA for 50 percent of its federal budget, the success or failure of this massive corporate social experiment could have ripple effects throughout the country - even the world - for years to come.
"The old culture is dead, and a new one is developing," says Omar Enrique Perez, a compensation analyst with 15 years at the firm, who is working to slash salaries across the board - including his own. "Because we feel we have to do something about the problems that are confronting our country, and we believe our work will help Venezuela develop."
While PDVSA's rhetorical about-face has yet to lift up the poor - even in the stone-broke villages that surround the oil refineries - change has swept through the company's Caracas headquarters.
In addition to the classless cafeteria, volunteerism is up, and salaries are said to be on their way down. The dress code has been loosened, and in some departments the high-five has replaced the curt nod in the hallways.
"There has been a change of mentality in all levels of the company," says a member of PDVSA's board of directors, who speaks on the condition of anonymity. "We believe that PDVSA should be subordinated to the needs of the state. For us, job No. 1 is fighting poverty."
The main force reshaping the company's philosophy is Chávez himself. The former paratrooper has handpicked company managers to promote his vision for a more egalitarian society and has vowed to plow more oil profits into social programs.
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| Recipe for Car Power: Heat Vegetable Oil, Flip Switch and Go (New York Times)
"I wouldn't do this to a $30,000 car unless I was confident that it would work."
With that, John Lin, owner of a Los Angeles fast-food franchise, opened the door of an opulent white Ford Excursion.
Powered by a seven-liter turbo-diesel engine that delivers just 13 miles a gallon, this oversize S.U.V. seemed the quintessential environmentalist's target. Yet soon, Mr. Lin will be paying less to fuel it than he would pay if he owned a Toyota Prius, which supplements gasoline with electricity. As an added benefit, he will sharply reduce the pollution.
Mr. Lin will not use a radical new mileage-boosting technology, but rather he will use simple vegetable oil, the same cheap, plentiful and clean-burning fuel that Rudolf Diesel used to power his first engine at the 1900 Paris World's Fair.
Normally, a restaurateur like Mr. Lin would have to pay someone to haul off the 10 gallons of vegetable oil used each day in his fryers. The oil would be dumped in a landfill, or perhaps used in animal feed. Instead, Mr. Lin will filter his oil and pour it into a heated auxiliary tank on the Excursion.
He will then start the vehicle on regular diesel, and after a few minutes, when the vegetable oil becomes more viscous in the heater, a manual switch will direct it to the diesel engine. From there, the only detectable difference will be the faint odor of French fries, and a noticeable lack of diesel stench.
The change in odor, however, is not the only benefit to be gained. In 1998, the National Renewable Energy Laboratory released a study on a fuel called biodiesel. Essentially vegetable oil with methanol and lye added to aid cold-weather flow and remove glycerin, biodiesel results in fewer harmful emissions than petroleum-based diesel.
Carbon monoxide emissions are reduced by 43 percent, hydrocarbons by 56 percent, particulates by 55 percent and sulfurs, a particular problem with petroleum diesel, are reduced by 100 percent.
Typically, biodiesel fuel costs at least as much as regular diesel. But straight vegetable oil is essentially free; Mr. Lin says most restaurant owners are more than happy to get rid of it. And unlike biodiesel, it does not require methanol and lye.
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