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Sen. Lugar: Energy is the albatross of U.S. national security (PDF)
US Senator Dick Lugar
U.S. Senate Foreign Relations Committee Chairman Dick Lugar addressed the Brookings Institution today on “U.S. Energy Security - A New Realism.”

In this speech, Lugar says:

“. . . energy is the albatross of U.S. national security.”

“. . . there is not a full appreciation of our economic vulnerability or the competition that is already occurring throughout the world.”

“. . . oil will become an even stronger magnet for conflict and threats of military action, than it already is.”

“Geology and politics have created petro-superpowers that nearly monopolize the world’s oil supply. According to PFC Energy, foreign governments control up to 77 percent of the world’s oil reserves through their national oil companies. These governments set prices through their investment and production decisions, and they have wide latitude to shut off the taps for political reasons.”

“Americans paid 17 percent more for energy in 2005 than in the previous year. That increase accounted for 40 percent of the rise in the consumer price index. Last November, we spent more than $24 billion on oil imports, accounting for more than a third of our trade deficit.”

Lugar’s new proposals in this speech include:

“The ‘Energy Diplomacy and Security Act’ (to be introduced this week) calls upon the Federal Government to expand international cooperation on energy issues. This bill will enhance international preparedness for major disruptions in oil supplies. A particular priority is to offer a formal coordination agreement with China and India as they develop strategic petroleum reserves. This will help draw them into the international system, providing supply reassurance, and thereby reducing potential for conflict.

“The bill would also stimulate regional partnerships in the Western Hemisphere. Most of our oil and virtually all of our gas imports come from this Hemisphere. The bill creates a Western Hemisphere Energy Forum modeled on the APEC energy working group. This would provide a badly-needed mechanism for hemispheric energy cooperation and consultation.” 2

“Our policies should be targeted to replace hydrocarbons with carbohydrates. Obviously this is not a short-term proposition, but we can off-set a significant portion of demand for oil by giving American consumers a real choice of automotive fuel. We must end oil's near monopoly on the transportation sector, which accounts for 60 percent of American oil consumption.”
(13 March 2006, Hattip:

Chip Giller at Gristmill say that Thomas Friedman's March 22 column was devoted to the speech. Unfortunatly, the column is behind the NY Times's subscriber-only wall.

Launch of Iranian oil trading hits wall
Oil exchange unlikely to begin till at least midyear
John Partridge, Globe & Mail (Canada)
As the nuclear standoff pitting Iran against the West continues, some conspiracy theorists are more focused on another plan that the Middle Eastern nation is pursuing.

But they are jumping the gun if they still figure Iran is within days of launching a new international oil exchange that would sell its own and other Middle Eastern oil producers' black gold in euros rather than U.S. dollars -- and which, the theory goes, could ultimately torpedo the greenback and the U.S. economy.

Despite repeated reports over the past 18 months or so that the planned bourse would finally open for business on March 20, 2006 -- and go head to head with the New York Mercantile Exchange and the ICE Futures Exchange in London -- the start date has been postponed by at least several months and maybe more than a year.

"In the middle of 2006, we are able to start the bourse," Mohammad Asemipur, special adviser on the project to Iran's Oil Minister, said when reached in Tehran. The plan is to trade petrochemical products first, with a crude oil contract coming last, a rollout that likely will take three years, he said.
(14 March 2006)

Pentagon looks to cut oil use and costs
Heather Farrell, UPI
In an effort to reduce the U.S. military's spending amid high fuel costs, the Pentagon is looking at wind, solar, geothermal, biofuel, hybrids and hydrogen fuel cells as new sources of energy.

The Defense Department uses more than four times as much energy as the other government agencies combined, and accounts for almost all the government's petroleum consumption, according to the Department of Energy.

Security and environmental concerns associated with fossil fuels are part of the reason the Pentagon is pushing energy efficiency and renewable energy, said Dennis McGinn, a retired vice admiral for the Navy and a senior fellow at Rocky Mountain Institute in Snowmass, Colo.

But the price of oil, hovering above $60 a barrel, has increased the pressure to cut energy costs.

"That's a game-changer," McGinn said of high oil prices. Renewable energies that used to be more expensive than fossil fuels are becoming increasingly attractive.

"Because the DOD is such a large consumer of energy ... it creates a demand on the market" and encourages companies to invest in renewable energy research, McGinn said.

As the DOD becomes more energy efficient, renewable sources can better meet the military's demand. And less demand means smaller environmental footprints left by alternative sources such as solar and wind farms, he said.
(21 March 2006)
Looks like we've got a new meme started: the energy-conscious military.

Australia: CSIRO warns of local oil shortfall
Katharine Murphy, The Age
AN EXPENSIVE scheme to encourage oil and gas exploration in Australia is being considered amid warnings that the nation faces a shortfall of locally refined petrol by 2012 — and even higher prices at the pump.

Federal Resources Minister Ian Macfarlane is pushing a budget plan offering millions of dollars in tax breaks to companies undertaking risky exploration for oil, gas and minerals.

Mr Macfarlane yesterday confirmed his push for a boost to exploration as the CSIRO warned Australians to prepare for higher petrol prices and fuel shortages. The science and research agency has also concluded that Australia is facing a shortage of fuel-refining capacity — meaning drivers will rely increasingly on imported petrol at a time of soaring world demand for energy.
(21 March 2006)

Proposed Mackenzie pipeline spurs coal gasification mega-plan
Bob Weber, The Canadian Press
A proposed Mackenzie Valley natural gas pipeline is still before the regulators and it’s already creating massive new plans for industrial development in the Arctic.

Vancouver-based West Hawk Development has unveiled plans to strip-mine extensive coal reserves along the Mackenzie River and begin building $2 billion worth of coal gasification plants to tie into the pipeline within four years.

"It’s a property we’re feeling very comfortable with in terms of generating natural gas from coal," West Hawk president Mark Hart said Monday.

Earlier this month, West Hawk announced it had bought about 1,100 square kilometres of leases in three areas of the Northwest Territories estimated to contain 2.1 billion tonnes of coal. Two of those are near Tulita, a tiny Dene community on the Mackenzie just west of Great Bear Lake.

Hart said the coal could be barged to market along the Mackenzie River. But gasification — turning the coal through heat and pressure into synthetic natural gas — is West Hawk’s priority.

"We’re definitely going to gasify," he said. "It’s the kind of coal resource that flows nicely into the pipeline concept."

Hart envisions a series of strip mines taking up to 30 million tonnes of coal a year and feeding it into gasification plants.
(22 March 2006)

Trading the Hummer for a Honda
Micheline Maynard, NY Times
...Luxury sport utilities are becoming decidedly less cool than just three years ago, when they were the hottest things on wheels and dealers had long waiting lists for the most popular models.

On top of the sales drop that has hurt all sport utilities, fewer than half the people who bought luxury S.U.V.'s are going back for another one. Incentives for the vehicles are at record levels and for the first time, luxury automakers are paying out more for rebates and lease deals to entice consumers to buy luxury S.U.V.'s than to buy cars.

The higher cost of gasoline plays a big role, as it has for the last year of high oil prices. But wealthy buyers, who used to shrug off the expense, are shifting gears, as excessive energy consumption is becoming socially embarrassing.

David Katz, who owns an interior design firm in Seattle, traded in his 1999 Ford Explorer last year to help buy a Lexus 400H, the hybrid-electric version of the RX sport utility. "I was sitting at my desk, ruminating about the crisis in the Middle East and what I could do personally to use less fuel," Mr. Katz said.

Dub magazine, a specialty publication aimed at car enthusiasts, remains packed each month with images of customized cars, including celebrities' wheels. But now, its editors are seeing that trend setters, especially those who have families, are trying to appear as if they are environmentally aware.
(18 March 2006)