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IEA warns of falling spare oil production capacity
Guy Chazan, Financial Times
World oil markets face a “bumpy ride” in the months ahead, as Opec spare capacity dwindles to levels not seen since 2008, a time of soaring oil prices, the International Energy Agency said.
Fears that the west’s confrontation with Iran over its nuclear programme could disrupt global oil supplies have pushed crude prices up 20 per cent since December. Prices have posted record highs in euro-denominated terms, surpassing the peak reached during the 2008 price spike...
(14 March 2012)
High oil prices: Fortunately and unfortunately
Chris Nelder, Smartplanet
Contemplating these changes, I’m reminded of a book I loved as a child, Fortunately, a tale of reversing fortunes:
Fortunately, Ned was invited to a surprise party.
Unfortunately, the party was a thousand miles away.
Fortunately, a friend loaned Ned an airplane.
Unfortunately, the motor exploded.
Fortunately, there was a parachute in the airplane.
Unfortunately, there was a hole in the parachute.
And so on. Such it is with high oil prices.
Last week, I wrote that drivers in the U.S. will be forced to simply hand over the keys to new drivers in developing countries as competition for oil increases. But there are other reasons too, like lower costs and less stress. Bus and train ridership increased by 2.3 percent in 2011 over 2010, according to new data from the American Public Transportation Association, reaching one of the highest levels America has seen since 1957, according to the Washington Post. Subway ridership was up 3.3 percent nationwide.
Intercity transportation is also moving away from air and rail and toward buses, according to research by the Chaddick Institute for Metropolitan Development at DePaul University in Chicago...
Farmers are being forced to find ways to conserve fuel as well. Although most consumers do not realize it, an estimated 7 to 10 calories of fossil fuel are embedded in every calorie of food that arrives on American tables, mostly from diesel used to power farm equipment and big rigs, and from natural gas used to make fertilizers. Fuel is an enormous part of the cost structure for farmers, but they are often forced to absorb fuel price increases because they can’t pass them along to consumers.
So they have to be creative. Farmers are looking to no-till practices and switching to crops that require less tilling in order to save on fuel.
“We’ll think of ways, maybe make less passes through the field with the tractor than we normally would have. Try to figure out ways by maybe using weed sprays instead of cultivation,” farmer Greg Markarian told KFSN in Fresno...
(14 March 2012)
An Inconvenient Statement, Retracted
John M Broder, New York Times
Energy Secretary Steven Chu on Tuesday walked away from his oft-quoted pre-Cabinet statement that the United States should deliberately raise gasoline prices to discourage consumption.
In a 2008 interview with The Wall Street Journal before he was appointed President Obama’s energy secretary, Dr. Chu, then the director of the Lawrence Berkeley National Laboratory, said, “Somehow we have to figure out how to boost the price of gasoline to the levels of Europe.”...
His views on gasoline prices, while endorsed by many scientists and environmentalists, are politically off-message today, when gasoline prices are spiking and Mr. Obama is seeking to avoid political blame for them...
So in a hearing before the Senate Energy and Natural Resources Committee on Tuesday, Dr. Chu walked away from his earlier comment. “I no longer share that view,” he said. “Of course we don’t want the price of gasoline to go up. We want it to go down.”...
(13 March 2012)
Report reveals true cost of Keystone XL: Staggering public costs vs private benefits
Bill McKibben, Red Green & Blue
Cornell’s Global Labor Institute issued a big new report [PDF] this morning examining the proposed Keystone XL pipeline, the most comprehensive look yet at its economic impact. And it makes clear just how right President Obama was to block this boondoggle: It would make money for a few politically connected oil companies, but at a potentially staggering cost to the American economy.
For once economists looked at the whole effect of the project. Unlike studies paid for by the TransCanada pipeline company that purported to show thousands of jobs created (a number since walked back to “hundreds” of permanent positions even by company spokespeople), this study asks: What happens when there’s a spill?
Not if there’s a spill. There’s going to be a spill — the smaller precursor pipeline recently built by TransCanada spilled at least 14 times in its first year of operation, once spewing a geyser of tar-sands oil 60 feet into the air. In fact, the new Cornell report estimates that we can expect 91 significant spills over the next half century from Keystone, in large part because the bitumen it would carry south from Alberta is like liquid sandpaper, scouring the steel of the pipe...
(113 March 2012)
Link to the report