The Oil Drum

Updated 13-06-2008 at 19h00 (GMT+01h00).

It all started in Spain, it quickly spread to Portugal and southern France. Lorry drivers are on the streets and on roads protesting against high fuel prices and bringing normal day life to a stand still.


Spanish lorry drivers blocking main access roads to Madrid.

The Guardian has an interesting article on the rapid build-out of renewable energy generation in Portugal. The country seems to be determined to become free of dependency on fossil fuels as soon as possible, with the country's energy minister also sagely pointing out "When you have a programme like this there is no need for nuclear power. Wind and water are our nuclear power".

The country currently has Europe's largest solar power plant, is constructing Europe's largest wind farm and is on the leading edge of research into wave and tidal power. The obvious question is - if Portugal can do this, why can't we ? This applies more to Australia than New Zealand obviously...

In advance of the European Union – Latin America and Caribbean summit, the Portuguese prime minister, José Sócrates, visited Venezuela. During two days, more than twenty economic agreements were celebrated between the two countries, where energy had a major role.

Among the entourage where representatives of some of the largest companies operating in Portugal, with the objective of firming protocols in the vein of “oil for goods”, towards which the Venezuelan executive has been showing great openness.

As the production from Saudi Arabia continues to lag, even if transiently, Russian production and exports become more critical to world supply. And so we exchange the problems of getting oil from the sandy wastes of the Empty Quarter, with those of production from the icy wastes of Siberia. There are a couple of small issues, that I thought could be discussed, relative to this.

The first of these relates to gas supplies from that part of the world. It was interesting to note, in light of a number of comments made on this site about Gazprom’s acquisition of Western European pipeline company shares, that they now appear to be similarly interested in those of Portugal, as their strategy to control gas flows throughout Europe continues to succeed. The benefits, to them, of this policy are clear, for example in the negotiations over Kovykta, a field with 2 tcf of natural gas and over half a billion barrels of condensate. The plans were to sell some 2 bcf, largely locally, and then to expand deliveries through pipeline networks.

Unfortunately BP has noted:

TNK-BP cannot sell gas from its vast east Siberian Kovykta field or its smaller Rospan unit in western Siberia without Gazprom because of the Russian gas giant's monopoly control over Russia's pipeline network.

And here it has a problem, since the local market is not large enough to absorb the gas that the field can produce...