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Oil Declines After Biggest Gain Since 2009 on Europe
Grant Smith, Bloomberg
Oil declined in New York on speculation that last week’s surge, the biggest in three years, may have been excessive amid signs of slowing growth in China and a deepening slump in Europe.
West Texas Intermediate futures lost as much 2.1 percent, paring some of a 9.4 percent rally on June 29 that was crude’s biggest jump since 2009.
(2 July 2012)
Protests to continue against Shell Arctic drilling
Jennifer A. Dlouhy, FuelFix
An aggressive legal strategy by Shell that aims to keep environmentalists from interfering with its drilling rigs has only emboldened activists who plan to protest and closely scrutinize the company’s Arctic drilling operations this summer.
Greenpeace activists have set sail in an ice-class ship, the Esperanza, and will be following Shell’s work from a distance, deploying submarines to check on marine life and using acoustic equipment to monitor how much sound is coming from the company’s oil drilling.
In May, anti-corporate pranksters The Yes Men staged an elaborate — and entirely fake — Arctic drilling celebration at Seattle’s Space Needle, complete with a derrick-shaped drink dispenser that spewed dark oil-like liquid all over a guest. A video of the hoax on YouTube steered millions of viewers to a fake Shell website and “Let’s Go! Arctic” advertisements, including one that portrays climate change and melting Arctic ice as “an opportunity” instead of an environmental crisis.
(1 July 2012)
EU begins boycott of Iranian oil
Hendrik Heinze, Deutsche Welle
Beginning July 1, the European Union ceased buying Iranian oil. Brussels hopes the move will force Iran to the negotiating table over its controversial nuclear program. Will this strategy work?
The EU has upped the ante in the ongoing confrontation with Iran. Iranian oil tankers will only be allowed to dock in European ports again when Tehran enters into serious negotiations about its nuclear program. The EU and the United States accuse Iran of developing nuclear weapons. Iran, however, denies this, and insists on its right to use nuclear energy for peaceful purposes.
The embargo will have painful consequences for both sides. The EU has to manage without the oil, while Iran, for its part, will lose the revenue. Despite the hostility that exists between the two sides, in the long-term the world's fourth-largest oil producer and its second-largest oil consumer are dependent on one another.
Greece will be worst hit
The statistics reveal who will be worst hit by the sanctions. Until now, around a fifth of Iranian oil exports have gone to the EU – but less than six percent of the EU's oil came from Iran. Germany only sourced one percent of its oil requirement from there.
"At present, of all the European countries, it's Greece that has the biggest problem," explains the Munich-based oil expert Volker Blandow from the Association for the Study of Peak Oil and Gas (ASPO). "Greece had contracts with Iran which had decoupled delivery and payment." This meant that Greece received oil on credit, and could pay for it later. Now, however, Greece will have to go to an oil exchange to meet its requirements, says Blandow – and the country does not have the ready cash it needs to make the customary advance payment. Spain and Italy, on the other hand, Iran's other two big customers in Europe, have reoriented themselves in time. "They were able to find alternative suppliers - in Saudi Arabia, for example,” says Blandow. "European countries were able to prepare for the embargo, in the relative certainty that it would be imposed." EU Foreign Ministers agreed in January that imports would cease on July 1.
No money for Ramadan
Many analysts, Blandow included, believe Iran will be hit hard by the sanctions. "The Iranian economy is very, very dependent on the revenue from oil exports,” he explains. “It's said to be around 30 to 40 percent of gross domestic product. And when 20 to 30 percent of that is missing, it's certainly going to hurt.”
... Since the beginning of March, the price of oil has dropped by about 30 percent. Demand is low. “When the economy picks up again in Europe and the USA, clearly Iran will have the advantage. Then we will need this oil. Then the oil price will rise very steeply. In a situation like this, it would be interesting to see how the West reacts. Whether it places greater importance on ethics, or on the price of oil.”
Iran has the oil that, sooner or later, others will urgently need. The energy-hungry countries of China and India are still on the cards as potential customers. Yet Iran still has plenty to lose through the EU embargo, says Blandow. “The conveyor systems are mostly foreign-built. With a strict embargo in place, sooner or later they would stop getting replacement parts. That can't be in the interests of Western countries. We are very reliant on Iranian oil long-term. So the adoption of sanctions as a threatening position can only be temporary. People will do all they can to prevent any permanent damage being done.”
(1 July 2012)
China responds to Fukushima
Yun Zhou, Bulletin of the Atomic Scientists
(28 June 2012)