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Week 52 - December 30st - 2002 |
| David
Seaton's Energy Links® Editorial Forecasts
for 2003? It could be a good year, but it probably won't be. That is the
best I can come up with right off the bat. How could it be a good year?
Well, if none of the dozens of bad things that are poised to happen right
now finally happen, the year would turn out all right. If there isn't a
war in Iraq or if there is and the people of Baghdad greet the invading
American soldiers with flowers instead of small arms fire; that wouldn't
be too bad. If Ariel Sharon doesn't "transfer" all the Palestinians from
the West Bank and Gaza to the Iraqi desert in the meanwhile, we'd all breath
easier, I'm sure. In Asia, if there isn't another Korean War or mass starvation
in North Korea leading to atomic explosions in South Korea, Japan or even
the USA we could feel good about that when December 2003 rolls around.
And speaking of atomic bombs, we should always keep a weather eye on the
fanatic Hindus and Muslims of India and Pakistan; if they just spend the
next few months insulting each other... that would be nice too. Did I hear
anyone mention the Chinese devaluing the Yuan? And let's not even think
about the mysteries of the Japanese economy shall we? As to Latin America,
if a civil war doesn't break out in Venezuela to keep Colombia's civil
war company it would be great news and if Bush doesn't add Lula's Brazil
to his "axis of evil" and Argentina doesn't collapse entirely... or, or...
We haven't heard much from Mexico in a while, maybe everything is wonderful
there. And farther north, if there isn't another major terrorist attack
by al Qaida in the USA - experts say it's inevitable sooner or later -
of course that would be cause for thanks. Speaking of experts, for three
long years the "experts" have been predicting the US economy would recover...
maybe it will. Maybe people all over the world will continue to finance
the United States' immense, surreal current account deficit with their
hard earned savings, which is what makes all of Bush's posturing possible...
or maybe they won't. I hope I haven't left anybody out! In general, in
the world today there are so many variables, random, negative variables
that are bouncing around like electrons in an accelerator that it's difficult
to predict more than "unpredictability" in the coming months. Just the
thought of the possible synergies and multipliers between any of these
disasters waiting to happen is nightmarish itself. Just like a huge game
of dice. Right now George W. Bush is blowing on the dice for luck. What
should we do? Whose advice should we follow? The only real experts in taking
advantage of random events like the rolling of dice are professional gamblers
who gain their living from them. These cold eyed realists maintain that
the only way to win steadily at dice games is to stand on the sidelines
and bet against the person holding the dice. At the end of a long evening
you'll come out ahead. Fait votre jeux, Mesdames e Messieurs!
David Seaton
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| Impact
of Venezuela oil strikes beginning to flow into Houston (Houston Business
Journal)
Political strikes in Venezuela are bound to begin affecting U.S. oil imports, refinery operations and fuel prices the longer the strikes go on, industry sources say. As of midweek, prospects for an early end to the political demonstrations that have virtually shut down Venezuela's petroleum industry seemed bleak. Venezuela is the world's fifth-largest oil exporter, but its oil output has dropped by 70 percent — from around 2.2 million barrels per day to less than 1 million barrels per day — since the strikes began. Oil tankers, which can take up to three days to fill, were backed up in long lines at Venezuelan ports waiting for loading orders that did not come. Once loaded, it takes five days for the tankers to reach the United States. Venezuela is an important supplier of crude oil to the U.S. Gulf Coast refineries. Many Gulf Coast refineries and petrochemical plants have installed special equipment and processes in order to use the heavy crude oil produced in Venezuela because it is cheaper than the light crude that comes from other sources such as the Middle East. (See related story on Page 71.) In late 2000, Houston-based Conoco Inc. — now ConocoPhillips — completed a $163 million retrofit and upgrade at its Lake Charles, La., refinery, which is Conoco's largest. The project enabled the 243,000-barrel-a-day refinery to process lower-cost, but heavier, Venezuelan crude oil. Conoco was the first company selected by Venezuela's state oil company, PDVSA, to help develop the country's heavy oil reserves in the interior Orinoco Belt. Conoco partially refines the crude in Venezuela, then transports the synthetic crude to its Lake Charles refinery and to other refineries. At mid-week, Gulf Coast refiners, including San Antonio-based Valero Energy Corp., said they either had not yet run out of their Venezuelan oil supplies or they have been able to replace them from other sources. But that option will result in higher costs, which will likely push up gasoline and heating oil prices along with other refined products. Click here to read more Contents |
| Growing
U.S. Need for Oil From the Mideast Is Forecast (New York Times)
As President Bush seeks to reduce American reliance on oil imported from the Persian Gulf, new government studies predict that in two decades the West will be even more dependent on oil from Saudi Arabia and other Middle Eastern producers. Mr. Bush, asked a week ago on the ABC News program "20/20" about the importance of Saudi Arabian oil, said that "we must have an energy policy that diversifies away from dependency" on foreign sources of oil — including some that "don't like America." Late last month, the Department of Energy's Energy Information Administration forecast that in 2025 the majority — 51 percent — of world oil production would come from the Organization of the Petroleum Exporting Countries. About two-thirds of OPEC production, in turn, emanates from the Persian Gulf. The Energy Information Administration, or E.I.A., says OPEC now produces 38 percent of the world's oil. The information administration projects that Saudi Arabia will need to produce 22 million barrels a day by 2020 to meet increased world demand, far in excess of its current production of about 8 million barrels. "We're going to rely more and more on the Middle East markets for oil," said Fatih Birol, the chief economist for the Paris-based International Energy Agency, or I.E.A. The group's recent World Energy Outlook, which estimates energy markets through 2030, mirrors the forecast of the American energy agency. Government and industry oil experts widely agree that it makes sense for the United States to diversify its sources of energy. It is also possible that in the next decade increased oil from the Atlantic Basin and the Caspian Sea could make a short-term dent in American dependency on the Middle East. "Our dependency on the Persian Gulf could take a slight dip before it goes up," said John Brodman, the deputy assistant secretary of energy for international energy policy. "But the basic geological fact of life is that 70 percent of the proven oil reserves are in the Middle East." Click here to read more Contents |
| Iraq
and LUKoil: A Delicate Dance of Diplomacy (Stratfor)
Although Iraq stands by a recent decision to cancel a LUKoil contract involving the lucrative West Qurna oil field, Baghdad has every intention of leaving the field under Russian control, First Energy Undersecretary Hussein Suleiman told Moscow on Dec. 21. Speaking in Cairo, Suleiman said, "The West Qurna field is reserved for the Russians by a decision of the Iraqi leadership, not for any Russian company in particular but for the Russian government … Moscow has the right to propose [another] Russian company to develop this field." The clever twist of phrase is an elegant way of both putting Moscow in its place and ensuring that the Kremlin will continue to act with Iraq's interests in mind. Control over the Qurna field was granted to LUKoil, Russia's largest oil company, in 1997 as a reward for Russia's consistent support for Baghdad in the U.N. Security Council. Since then, Russian companies have gained other plumb contracts as a form of political payback, and Russia remains a leading player in the Iraqi oil industry. Noting this, the U.S.-backed Iraqi National Congress has stated clearly that it will revisit all oil contracts awarded by the regime of President Saddam Hussein if it should be placed in charge of a post-Hussein Iraq. The opposition group specifically has mentioned fingered Russian and French contracts. LUKoil, taking the hint, held preliminary discussions with the INC in order to safeguard its West Qurna asset. On Dec. 12, when Baghdad rescinded the LUKoil contract, it was almost universally heralded as an unwise step. The West Qurna deal was by far Russia's largest concession, and cutting out LUKoil was expected to provoke Russian anger and destroy the Kremlin's willingness to protect Iraq at the United Nations. Suleiman's statement, however, sets things right so far as Baghdad and Moscow are concerned. Reading between the lines, Baghdad has squarely blamed LUKoil, not Moscow, for troubles in the relationship between Iraq and Russia. The Iraqi government also has made it clear that the LUKoil-Baghdad tiff was a discrete exception to the broader Iraqi-Russian friendship. The reassertion of this friendship complicates things for Washington. Since Iraq made it explicitly clear that the state of Russia is in control of West Qurna's billions of dollars' worth of oil reserves, the Kremlin is far more likely to use its veto in the U.N. Security Council to protect its -- and Iraq's -- interests. Click here to read more Contents |
| Flow
of Oil Wealth Skirts Nigerian Village (New York Times)
Only a creek separates this village from the vast ChevronTexaco terminal that pumps oil deep in West Africa's great Niger Delta, but most of the village women who raided the terminal one day in July had never crossed over before. Just after sunrise, hundreds of unarmed women commandeered a boat and infiltrated the terminal, fanning out across the docks and the airstrip, entering office buildings where Chevron managers worked and homes where they slept. For the next 10 days they occupied the terminal in a peaceful protest, the first one led by women. Chevron allowed them to stay on and entered negotiations. On their side of the creek, these women live in shacks with no phones or indoor plumbing, so to see inside Chevron amounted to an epiphany. "The Bible describes paradise as a beautiful place where there is everything," said Roli Ododoh, 33, a mother of two. "When we got in there, it was really like paradise." All their lives they had heard of America, but now, as 66-year-old Anirejotse Esuku said, "I saw America there." For Mrs. Ododoh, much was inspiring in the new world of Chevron: the air-conditioning, the tarred roads, the countless phones, the fresh salads, the odd machine called a "microwave," the good foam in the beds. Things unimagined. But the women were also enraged at what they saw. This wealth had been drawn, over four decades, from the land around them. Yet virtually none of it had benefited a community confined on the wrong side of the creek. The people of the delta feel abandoned by their corrupt government and are turning to Americans, whom they see both as the source of their suffering and as the solution. Referring to Chevron, Felicia Atsepoyi, a leader known here as Mama Ayo, said: "They achieved something from this community for 40 years. Can't they help us achieve something?" That question is taken seriously by Chevron. Word of the women's raid quickly spread from this remote village to London, where Chevron executives cut short a management meeting to rush to Nigeria. ChevronTexaco's giant terminal — the size of 583 football fields — is protected by barbed-wire fences and moatlike waterways. But, as the executives knew, it is also surrounded by tens of thousands of Africans who have grown poorer and angrier. Click here to read more Contents |
| Going
with the wind (Christian Science Monitor)
When this one-blink Massachusetts town decided against nuclear power 20 years ago, residents turned to an energy source as ancient as time. Today, the eight windmills they built still stand on the blustery slopes of Mount Wachusett, white sentries whose metal blades clank and turn in the breeze. They haven't done a lot more. On a good day, the windmills might power 30 of Princeton's 1,300 homes. It's the kind of tale that has made alternative energies and their earnest advocates the butt of many an oilman's joke. But wind power just may be worth another look. Today it's the fastest-growing energy source in the world. And, despite their failed experiment, Princeton residents are among those banking on it. The town has decided, at a cost of $3.75 million, to replace its struggling eight towers with just two - taller, sleeker, and incorporating all the technological advances of the past two decades. They are expected to generate nearly half the town's energy needs by next fall. And this time around, Princeton has lots of company. Last year, enough wind energy came online in the United States to power roughly a half million homes. Next year, that number is expected to climb by another 100,000. The very fact that Princeton is willing to give wind power another shot says much about how far the ability to harness nature has come - and why advocates say wind is poised to make the leap from green-movement boutique to mainstream energy source. Click here to read more Contents |
| Cleaner
Coal Coming Down the Pipe (Wired)
A hybrid turbine that generates electricity from coal mine waste could help reduce greenhouse gas emissions, perhaps one day making coal nearly as clean a fossil fuel as natural gas, according to Australian scientists. Coal mining releases methane, a greenhouse gas 21 times more damaging than carbon dioxide. In addition, low-quality coal at many mines -- particularly in Australia -- is often dumped in piles and neglected. There, it can spontaneously combust, releasing carbon dioxide. Australia's national research organization CSIRO and a private Queensland-based company plan to build a prototype for a 1.2-megawatt power plant that will produce energy by burning both the methane gas and the unused low-quality coal. Until now, burning methane released by coal mining has been impractical. The cost of generating enough energy to combust the low-concentration gas has exceeded the value of the energy produced from the gas itself. That's where the stray coal enters the equation. By burning this essentially "free" resource of waste coal, the plant can create enough energy to burn the methane, said Patrick Glynn, the CSIRO researcher spearheading the research project. "We're not doing anything too novel here, apart from taking existing technologies and putting them together in one application," Glynn said. In fact, he said the main purpose of the demonstration plant will be to test the hybrid under real-world, round-the-clock operating conditions. Click here to read more Contents |
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