Drumbeat: July 1, 2011
Posted by Leanan on July 1, 2011 - 9:59am
(Reuters) - A string of retail failures in Britain could be the tip of the iceberg as shoppers cut back dramatically on non-essentials.
Analysts say more will go to the wall in coming months as consumers, grappling with rising prices, particularly fuel and energy, subdued wages growth, a lack of credit, job insecurity, a stagnant housing market, government austerity measures and fears of interest rate rises, further rein in spending.
A government order came into effect Friday obliging large-lot electricity users in the service areas of Tokyo Electric Power Co. and Tohoku Electric Power Co. to limit their consumption to 15 percent below that of this time last year.
The measure is aimed at coping with the possibility of electricity shortages this summer, due to accidents at the crippled Fukushima No. 1 nuclear power plant.
Companies in areas that are supplied power by Tokyo Electric Power Co. and Tohoku Electric Power Co. have been striving to meet a 15 percent power cut required by the central government that was introduced Friday.
To meet the goal, some companies are ready to change office hours starting Friday, while others have already moved their production bases to other areas.
WASHINGTON -(Dow Jones)- The U.S. Environmental Protection Agency has revised a set of clean-air permits that Shell Oil Co. has long sought for drilling projects off the coast of Alaska, saying it has addressed concerns that sparked objections to the permits last year.
EPA said Friday that the revised permits, which are still in draft form, reduce emissions of most key air pollutants by more than 50% from levels allowed in the permits issued last year.
Kunstler -- clearly an incurable contrarian -- likes Poughkeepsie. He lives in the Hudson Valley himself, in a far cuter but similarly sized town, and he predicts that such neither-village-nor-city places will one day be just right. "We'll see people moving to places that are scaled appropriately to our energy diet," he said -- towns small enough to walk across, but big enough to pool their resources for, say, a hydropower plant. And with good farmland on one side and a great big river on the other, Poughkeepsie is ideally placed for local food production and carbon-free transportation. "Towns like Poughkeepsie are at their nadir now," he conceded, "but they have a lot of virtues that are going to become apparent in the years ahead."
(Reuters) - A who's who of energy trading has stepped in to buy crude from the U.S. Energy Department's emergency stockpiles, the government said. [ID:nN1E76014L]
The United States is releasing 30 million barrels from its Strategic Petroleum Reserve, representing half of a coordinated international push to boost global supplies and combat rising prices.
NEW YORK (Reuters) - The "apparently successful" bids for the U.S. Strategic Petroleum Reserve's release of crude oil stocks totaled 30.64 million barrels at an average $107.19 a barrel.
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States rose by one this week to 874, the second straight weekly gain, data from oil services firm Baker Hughes showed on Friday.
Peter Tertzakian, chief energy economist with Calgary-based Arc Financial Corp, is among those expecting lower oil prices to be shortlived. He passed along his research report, saying the IEA move "is quite counterproductive and serves to increase, not decrease, the threat of upward oil price volatility."
He notes that "the IEA's move introduces a surprise dimension of market uncertainty that will give decision makers at boardroom tables pause on how much capital to plough into exploration and development."
The International Energy Agency’s decision to release oil from the strategic reserves of member countries has been criticized as a political, rather than economic, decision. But Jeff Rubin, author and economist, tells BNN that even worse—it will be ineffective in maintaining lower oil prices.
Gov. Bev Perdue vetoed legislation on offshore drilling and environmental rule-making, delighting advocacy groups that had fought both.
Sen. Bob Rucho, R-Mecklenburg, was a primary sponsor of the Energy Jobs Act. It directed the governor to form an offshore-energy compact with South Carolina and Virginia and prescribed how to use oil and gas revenues the state might get.
NEW YORK (CNNMoney) -- In a surprise move, New York State is likely to lift its ban on hydraulic fracturing, the controversial process used to extract natural gas.
The state's Department of Environmental Protection released a draft Thursday for proposed new regulations on the process, known as "fracking" for short, that injects thousands of gallons of water, sand and some chemicals deep into the ground to crack shale rock and release the gas.
Eight U.S. states made the top 10 list of most attractive jurisdictions worldwide for oil and gas investment, according to Calgary-based Fraser Institute's Fifth Annual Global Petroleum Survey.
Mississippi, Ohio, Kansas, Oklahoma, Texas, West Virginia, Alabama and North Dakota made the top 10 of the All-Inclusive Composite Index; the Netherlands sector of the North Sea and Hungary also are among the top 10, the global policy think-tank reported. Only Mississippi, Texas, Oklahoma and Alabama ranked in the top 10 in the 2010 survey, and were also among the top 10 in 2009.
Most voters continue to feel America needs to do more to develop domestic gas and oil resources. They also still give the edge to finding new sources of oil over reducing gas and oil consumption.
The latest Rasmussen Reports national telephone survey of Likely Voters shows that just 19% believe the United States does enough to develop its own gas and oil resources. Seventy-five percent (75%) do not think the country is doing enough in this area. These findings are virtually unchanged from late February.
Prince George- Drivers in Central BC could be facing a shortage in the fuel supply for their vehicles following the shutting down of the Pembina Pipeline that serves the Husky Refinery in Prince George.
AMMAN - Electricity providers may soon face a fuel shortage if they fail to pay their financial dues to the country’s sole oil supplier, according to stakeholders.
In recent months, electricity companies have relied heavily on heavy industrial fuel from the Jordan Petroleum Refinery Company (JPRC) due to a halt in Egyptian natural gas supply after a sabotage attack on the pipeline to Jordan on April 27, which lasted for around 45 days
Iran's Ministry of Power is concerned about gas shortages at Iranian power plants and is calling on President Mahmoud Ahmadinejad to intervene. According to the ministry, 15 power plants are currently without gas and are running on liquid fuel, but liquid fuel reserves are also running low.
BENGHAZI, Libya (Reuters) - Libya's cash-strapped rebels have received $100 million in financial assistance from Qatar but need more money urgently to avert an energy and humanitarian crisis, a rebel official said on Wednesday.
In an appearance on Russia Today, an English-language satellite channel financed by the Russian government, Col. Muammar el-Qaddafi’s son Seif al-Islam said that the international intervention in Libya was motivated purely by a desire to control Libya’s oil and gas resources.
“They have one target,” Mr. Qaddafi said of the countries participating in the NATO-led military campaign. “This country is a piece of cake: rich, full of gas, oil, and we have more than $100 billion deposits abroad… Their goal is not Qaddafi, their goal is to control Libya.”
"This revolt never really had the strength to succeed," McGregor said. "There was this feeling among the rebels that all we have to do is show up. But you should take a couple of years to get it organized first. If you're just going to run out on the streets, the results will be predictable."
Four months on, the rebels are not capable of supporting themselves, McGregor said. They are out of fuel, oil production has shut down, and they have few available resources. They will soon face even shortages of food and water, McGregor said.
Tripoli, Libya (CNN) -- Embattled Libyan leader Moammar Gadhafi is calling for fresh volunteers in a months-long war with rebels attempting to bring about an end to his 42-year rule -- and women of all ages are answering, CNN has learned.
LONDON — Bahrainis living abroad have been ordered to spy on their countrymen in the wake of a deadly crackdown on pro-democracy demonstrators.
Documents containing "loyalty pledges" — which also require expats to promise they will not protest against the tiny Gulf state's government — have been sent to students attending university in the U.K.
(CNN) -- Syrian tanks and helicopters opened fire and killed at least two civilians as the military advanced through a series of villages in northwestern Syria Thursday, a push that sent residents running for the hills, a villager told CNN.
"They attacked the old church," said Mohamed Smail, a farmer who fled his home and spoke to CNN from the hills around Al Bara. "We are calling on international organizations to protect our ruins. They are destroying our cultural heritage."
Schlumberger announced this April that it would work in close collaboration with Eurasia Drilling – the latest in a series of moves to expand its footprint in Russia.
Russia holds the world’s largest reserves of natural gas and the 8th largest reserves of oil, and local production giants such as Gazprom and Lukoil have already announced aggressive plans to boost reserves and production over the coming years. This has made Russia a promising market for Schlumberger and other oilfield services firms such as Halliburton and Baker Hughes that also have significant operations in the region.
JACKSON, Miss. — Documents obtained by The Associated Press show former BP chief Tony Hayward fought off accusations that he sought to prop up the company’s falling share price through his subordinates’ daily media briefings on the Gulf oil spill.
The documents also show Hayward defending himself against accusations that the firm failed to keep its promise to share its data on how much crude was spewing into the sea.
So the IEA and the UK government are now out of the closet when it comes to Peak Oil. Anyone else want to step up and admit Peak Oil is real, and will happen sooner rather than later? I promise, the punishment will be less harsh if you confess now.
LOS ANGELES — For six years, California gave owners of hybrid cars the keys to the fast lane: permission to drive alone among carpoolers.
Now hybrids are about to lose the special privilege that was intended as a reward for saving gas and protecting the environment. The vehicles are no longer novel, and transportation officials want to make way for a new generation of even cleaner cars.
For years, Howard University has relied on Pepco for most of its power needs. But a new project could free the campus from its dependence on the utility and turn it into a power provider for its neighborhood.
Installing rooftop solar arrays could become far more affordable for American homeowners if new federal and state initiatives to streamline permitting take hold nationwide.
The cumbersome costs of siting, permitting, installing and connecting small-scale solar make up an increasing percentage of overall system fees — up to 40 percent — while the price of photovoltaic panels continues to drop.
North America's greenest cities aren't just on the West Coast, long known for environmentalism. They're also in the South, East and Midwest as innovative eco-efforts proliferate.
The white buffalo is an omen that signifies the arrival of hard times unless people learn to change their ways and live in a manner that benefits everyone, including Mother Earth, according to literature distributed at the entrance gate.
Few things feel better than stepping out with a fat paycheck in your pocket. But a new study in the Journal of Public Economics proves that it just might be anything but good. In fact, it can be downright deadly.
University of Notre Dame economist William Evans studied four major demographic groups—seniors on Social Security, military personnel, families receiving tax rebate checks and recipients of Alaska’s Permanent Fund dividends—and found that mortality rates significantly increased the week after checks showed up in their mailboxes. The three causes of death with the largest increases were substance abuse, external causes (all kinds of accidents) and heart attacks.
There were no tales of catastrophic tsunamis or drowning of Sydney Harbour's foreshore, rather a story of incremental awareness.
Oil prices will go through the roof, he said. Whether because of peak oil - the point at which it is not economic to extract - or because of a price on carbon, oil is only going to become more expensive. Our economy is run on oil so the knock-on effects are ubiquitous.
Food prices will soar, he said. Unable to feed their families there will be riots. Already, he said, this has been witnessed in the Middle East. Back in 2008, when food prices hit an all-time high, we saw riots, and again this year when food prices have matched those stratospheric records, we have seen uprisings around the globe. Thomas Friedman, writing in the New York Times has also made this comparison, most recently when reviewing Gilding's book.
And there will be stories in the news of natural disasters. A flood may hit, followed by a nasty cyclone. Maybe there'll be an unusually large hailstorm. Perhaps just a long, dusty drought.
It’s going to hit hard and it’s going to hurt – made worse because most aren’t expecting it. They think the world is slowly returning to our modern “normal” – steadily increasing growth, with occasional annoying but manageable interruptions. After all, the global recession wasn’t so bad was it? Sure there was pain and things got shaky but Governments responded, bailed out companies, stimulated economies, got things back on track. While it’s still a bit bumpy, Greek wobbles, US debt, extreme weather, high oil and food prices etc, it’ll work out. It always does….
If only it were so. In fact we are blindly walking towards the next in a series of inevitable system-shaking and confidence-sapping crises, deluded in the belief that the worst is behind us.
Climate change will impact on all aspects of our economy including the viability of some activities and the strength of markets.
The impacts of peak oil production will be experienced as rising fuel prices and scarcity at faster rates over the next decade.
A session at the March 2011 Casualty Actuarial Society’s annual ratemaking seminar discussed the wide range of actuarial implications of levelling off of the world’s oil supply, the resulting rising gasoline prices and their economic impact. The presentation included recent examples of these issues impacting society in general and more specifically insurers such as the 2010 Deepwater-Horizon oil drilling platform blowout in the Gulf of Mexico and the nuclear power plant destructions in Japan earlier this year.
Gail Tverberg described the strong correlations between oil price spikes and recessions, population growth and increased fuel usage and between food prices and oil prices. General examples of the impact of recessions on insurers in the US were discussed. These range from a decrease in motor claims, high unemployment’s impact on workers compensation insurance, and homeowner insurers being impacted by falling home values and unoccupied homes. Additionally insurers are impacted by the amount of investment income. On the other hand new coverages such as for solar panels and electric cars emerge.
Earlier this month, we had Tony Greenham of The New Economics Foundation visit Henderson to talk about “peak oil” and the implications for future economic growth. Over 40 fund managers from across Henderson’s equities and bond teams turned up to hear what Tony had to say, demonstrating that investors from a wide range of perspectives recognise that this is an important issue to consider.
Oil declined, trimming the biggest weekly gain in almost three months, as signs of slowing manufacturing growth in China and the U.S., the world’s biggest energy users, stoked speculation fuel demand may falter.
Futures slipped as much as 1.3 percent, their first decline in four days, after China’s Purchasing Managers’ Index fell to the lowest since February 2009. A U.S. report today may show a slowdown in factory activity. Prices also slid as OPEC boosted supplies and the U.S. offered 30 million barrels of oil from strategic reserves under an International Energy Agency plan to stabilize prices.
WASHINGTON — The government's auction of 30 million barrels of oil from the United States' emergency stockpile attracted more than 90 offers to buy the crude, the Energy Department announced Thursday.
Industry interest in the Strategic Petroleum Reserve oil was so high that the auction was "substantially oversubscribed," the department said, meaning bidders offered to buy more oil than is available.
SINGAPORE/BEIJING (Reuters) - Top exporter Saudi Arabia is unlikely to cut crude prices deeply enough in August to lure Asian refiners into buying much more oil, a Reuters poll showed on Friday, making it difficult for the kingdom to substantially boost supply.
Last week’s decision by the IEA (International Energy Agency) to release 60 million barrels of oil, including 30 billion barrels from U.S. strategic reserves, was a remarkable and defining decision.
To my mind, it represents one of the scariest, most mindless, most desperate and worst decisions I’ve seen in more than 30 years of watching markets and economies – signaling that we are close to throwing in the towel on the very idea of developing an economy that can work in the 21st century. (If pushed to wall I might have to admit the 2009 stimulus package was just about equal.)
Forget wind, solar and wave power. And forget nuclear too. We’re not saying nuclear power doesn’t have a future, but compared to natural gas it’s a second-class power source.
Natural gas on the other hand, can almost be used as a straight replacement for oil. But unlike oil, we’re in no danger of reaching “peak gas” anytime soon. In fact, new gas reserves are discovered all the time.
WASHINGTON-You're Ian Urbina, a senior New York Times reporter. In February and March you write that hydraulic fracturing, a method of natural gas extraction, is contaminating Pennsylvania drinking water. Your accusations are subsequently disproved by government tests.
What do you write next?
You write a three-part series in the Times saying that shale gas production is "inherently unprofitable" and a giant Ponzi scheme, as well as loosely-regulated by the Securities and Exchange Commission.
No matter that many emails you cite quoting industry managers, geologists, government officials, and market analysts are two years old. No matter that two of your supposedly objective sources are environmental activists. No matter that profit-maximizing companies are investing billions of dollars in shale gas.
Is there an exaggerated quality to the extraordinary projections and tens of billions of dollars pouring into shale gas, the newly available fuel that has shaken up markets and geopolitics? The answer is yes -- estimates for global shale gas reserves and future production are all but certainly over the top; likewise, the world's major energy companies -- ExxonMobil, Shell, Total, Sinopec, Statoil, and so on -- have probably committed excessive sums to this new source of energy.
Aging coal-fired power plants cannot compete with plants burning the cheap, abundant natural gas now emerging from American shale formations, the EPA's chief air pollution official told senators this morning.
Hinsdale, IL — Trying to forecast whether or not gasoline prices in the suburbs will rise or fall this summer is about as predictable as whether or not red or black will turn up on a roulette wheel, gas experts are saying.
One of Hinsdale Transportation Company’s limo drivers, Jim, who didn’t want to give his last name, said his pay has dropped about 25 percent in recent years.
“It’s not only gas,” he said. “Everything else has gone up — the cost for repairs, oil changes.”
In order to save money, Jim said he’s always looking for the cheapest gas, trying not to let his car idle and limiting use of air conditioning in the summer and heat in the winter.
Asia's fourth-largest economy, heavily dependent on energy, has been battling to contain inflation like other regional peers after global oil prices rallied to multi-year highs.
The government said early on Thursday that it plans to lift electricity prices in August, delayed from an expected announcement in June or July, and the increase will be only slightly above the level of consumer inflation.
South Korea’s government plans to leave gas prices unchanged in July as inflationary pressure is rising.
Repairs to export infrastructure should enable country to double exports by the end of the year.
(Reuters) - National Iranian Oil Co (NIOC) has said it will cut supplies for Indian clients in August if the two countries have still not found a way to make payments for the oil, three industry sources said on Friday.
ALMATY, Kazakhstan (AP) — Building work began Friday on expanding an oil pipeline starting in Kazakhstan that will enable a massive boost in exports from a major Chevron Corp.-led field in the Central Asian nation.
ALMATY, Kazakhstan — Oil-rich Kazakhstan has extended its yearlong ban on the export of fuel until 2012 in an attempt to rein in domestic prices and ensure affordable supplies for its farming industry.
A government notice published Tuesday stated that the ban, which has been in place since mid-2010, will help avoid critical gas shortages.
CARACAS -- As the national and international public is fully aware, the President of the Bolivarian Republic of Venezuela, Comandante Hugo Chávez Frías, is presently in the midst of a process of recovery and extremely strict medical treatment.
For that reason beyond control and after prior consultations with Latin America and Caribbean governments, the Venezuelan government has taken the decision to postpone the 3rd Latin American and Caribbean Summit on Integration and Development (CALC), initially scheduled for July 5-6, 2011 on the Island of Margarita.
Southern Sudan’s government wants the U.S. to lift sanctions on Sudanese oil, said Riek Machar, the region’s vice president.
While U.S. economic sanctions imposed against Sudan in 1997 won’t apply to Southern Sudan after its independence on July 9, they will cover any parts of the southern economy, including oil, that benefit the north, the Treasury Department’s Office of Foreign Assets Control said in an April 12 statement.
SHANGHAI (AP) -- Recent spills in China's largest offshore oil field are being investigated, reports say. The spills were in the Bohai Penglai 19-3 oil field in Bohai Bay off the northeast coast, said reports in the Southern Weekend and other newspapers. The field is a joint venture between China National Offshore Oil Corp. and ConocoPhillips China.
NEW YORK (Reuters) - A jury in Maryland awarded plaintiffs suing Exxon Mobil more than $1.5 billion for a 2006 leak at a gasoline station, the Baltimore Sun reported on Friday.
The Sun, quoting a source who had viewed the verdict, said the jury had awarded the 160 plaintiffs in the case against the oil company more than $1 billion in punitive damages.
Prius v is bigger, heavier than the Prius hatchback, but it's still compact-car size. It goes on sale this fall, priced at a yet-unspecified "little more than" the hatchback, says Rick LoFaso, U.S. marketing manager of Toyota cars and vans.
With much of the attention in the electric airplane community focused on range rather than speed, speed records are few and far between. But with four successful electric airplane designs flying in four different countries, the fledgling industry hints back to the early days of aviation when competition drove improvements in all aspects of performance.
Robert Brown is an officer in the Seattle Police Department’s bicycle patrol, which lacks the sleek machines and tight jerseys of the Tour de France. But Mr. Brown has something that could be more important to both male and female cyclists: a no-nose saddle.
Like most cyclists, Mr. Brown at first didn’t see any need to switch from the traditional saddle on the mountain bike he’d been riding full time for five years on the force. When researchers at the National Institute for Occupational Safety and Health and Safety offered new noseless saddles intended to prevent erectile dysfunction, he quickly told his supervisor, “No problems here!”
But then, after trying the new saddle, he felt the difference. His weight rested on his pelvic bones instead of the crotch area, which formerly pressed against the saddle’s nose. During his sleep, when he wore a monitor, the measure known as “percent of time erect” increased to 28 percent from 18 percent.
Deforestation rates in the Amazon, the world’s biggest rain forest, more than doubled in May as Brazilian farmers become more confident they’ll be granted amnesty for illegal logging.
Almost 268 square kilometers (66,200 acres) of protected rain forest were cut down in May, up from 110 square kilometers a year ago, the National Institute for Space Research said in an e-mailed statement.
The U.S. Fish and Wildlife Service’s decision to list polar bears as threatened under the Endangered Species Act was reasonable, a federal judge ruled, rejecting challenges that it limits resource development in Alaska.
Alaska’s decision to host the largest oil and gas lease sale of any US state this year is good news for the oil and gas industry, which has been pressing for more access. And while the resulting exploration and production certainly will be good for the overall economy – creating jobs and boosting activity – it is a pity that it is not against a backdrop of better news on the environmental front.
By this I mean concerted steps by the US government to reduce the use of oil as part of a larger effort to curtail carbon emissions. This issue has long disappeared from the political radar, despite being a key platform on which President Barack Obama was elected.
Members of Americans for Prosperity, a group founded and largely financed by oil industry interests, filed a lawsuit this week seeking to end New York State’s participation in the 10-state Regional Greenhouse Gas Initiative.
Baseline temperature averages issued by government scientists this week indicate that temperatures across the United States were half a degree warmer on average from 1981 to 2010 than they were from 1971 to 2000.
Every state’s annual maximum and minimum temperatures increased on average, the National Oceanic and Atmospheric Administration’s National Climatic Center said.
There is a ripple of unease among many scientists who study the warming of the planet these days. Some have faced harassment, legal challenges and even death threats related to their research, the American Association for the Advancement of Science reports.
On Tuesday, the board of directors of the association, which publishes the journal Science, released a strongly worded statement “vigorously opposing” such attacks on researchers, saying that the tactics inhibited the free exchange of scientific ideas.
Scientists are to end their 20-year reluctance to link climate change with extreme weather – the heavy storms, floods and droughts which often fill news bulletins – as part of a radical departure from a previous equivocal position that many now see as increasingly untenable.