World oil to run out in 4 years

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Moving subsidies from Big Oil to Clean Energy...

House Passes Tax Hike for Oil Companies
February 29, 2008 - House Republicans criticized energy legislation passed late Wednesday, saying that it would raise taxes on the oil industry but give tax breaks to Venezuelan President Hugo Chavez and the state-run oil company CITGO.

"Middle-class families and small businesses are feeling the squeeze from rising costs for gasoline, food, and other costs of living," said House Minority Leader John Boehner (R-Ohio) in a statement. "Unfortunately, the Democrats' 'no energy' bill will only make matters worse by raising taxes and setting the table for even higher prices at the pump." The House passed the Renewable Energy and Energy Conservation Tax Act of 2008 on a vote of 236 to 182. Senate Democratic leaders have indicated they would fast-track the bill to try to avoid a Republican filibuster. "Congress just seems bound and determined to repeat the mistakes of the past, by increasing the tax burden on the oil industry," Pete Sepp, vice president for communications at the conservative National Taxpayers Union, told Cybercast News Service.

"By claiming tax hikes will create jobs, [House Speaker Nancy] Pelosi is living in an economic fantasy world," Sepp added. "The only jobs tax increases create are government jobs. Worse are claims that energy prices will come down ... how can raising an entire energy sector's overhead make prices lower? Carter-nomics didn't work when the windfall profit tax was imposed 30 years ago, and they won't work now," he said. "Higher prices at the pump, less domestic production, and more dependence on foreign oil will be likely if this legislation passes," said Sepp. "Consumers had best get on the phone to Washington before it's too late."

Rep. Albert Wynn (D-Md.), however, applauded the bill's passage, saying there is "no excuse for continued subsidies to big oil companies." "Residents all over the country are feeling the pinch of gas prices and rising home heating oil costs, but they're also just as concerned about the environment," Wynn said in a statement. "This bill is a win-win solution, which helps promote clean, renewable electricity generation that will save taxpayers money, and help protect the environment. This bill addresses the public's outcry for an end to ever-increasing fuel costs while providing green jobs that will help stimulate our local economies," he added.

While the bill would roll back tax breaks for large oil companies, it would also provide $6.5 billion in incentives for energy production from wind, geothermal, hydropower, and other renewable sources. "The Federal Government must invest in clean energy sources, like solar and wind - and encourage and help consumers to do the same," said Wynn. "This bill includes solar energy tax credits for homeowners that will promote conservation and help build new 'green' jobs across the country. Tax credits for plug-in hybrid cars and trucks will save consumers money, save gas, and reduce emissions."

But Boehner said the "worst" parts of the bill are the provisions on foreign oil. "It actually carves out tax breaks for Venezuelan dictator Hugo Chavez - courtesy of American taxpayers," said Boehner. "This is unacceptable, and the Democratic leadership is irresponsible for bringing the bill to the House floor." "I am disappointed that the Majority voted down a Republican proposal to eliminate the tax relief for Hugo Chavez and give it to those who need it most: middle-class American families," he said. "The largest tax increase in American history is on the horizon, and House Republicans are committed to stopping it."

Source]CNSNews.com -- Politics

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Why we can’t quit oil...

Why We Can’t Quit
Mar 24, 2008 Issue - Even at $100 a barrel, oil is still cheaper than a Starbucks latte.

At the age of 7, when most kids are climbing trees, John Hess was surveying foreign oilfields. The son of Leon Hess, a forceful entrepreneur who built a small home-heating business in New Jersey into a global oil company, the younger Hess immersed himself in the oil world from an early age, studying Arabic and Farsi to better connect with Middle Eastern oil executives. Now the CEO of Hess Corp., he's become an advocate for energy conservation and investment in alternative fuels. NEWSWEEK'S Fareed Zakaria spoke to him about the new world of $100-a-barrel oil, and the likelihood of an energy crisis. Excerpts:

Zakaria: Why has oil moved over $100 a barrel?

Hess: We've moved from a supply-led market to a demand-led one. In the past, the world has relied on OPEC's spare capacity, which in 1985 was 10 million barrels per day. Today that number is about 2.5 million barrels a day. We no longer have a safety margin to ensure price stability in the face of supply interruptions and demand spikes. Right now it's hard to see any relief in sight. Then there's demand. About 50 percent of oil demand is for transportation, and auto ownership in the developing countries is growing swiftly, especially in India and China. Goldman Sachs estimates that by 2050, they could have 1.1 billion cars on the road, up from just 20 million three years ago. That's an overwhelming increase in the need for automotive fuel. Put those two things together—limited supply and increasing demand—and you get high oil prices.

Oil prices have quintupled in the past six years, from $20 to $100 a barrel. Why hasn't that weakened demand?

I think that's been a huge surprise to everyone. I remember meeting with government officials when oil was heading towards $25, and they thought economic disaster was around the corner. They thought the same thing at $50 and $75 a barrel. The reason we've withstood the increase is that consumer income has grown faster than energy expenditures have. We spend about 6 percent of our income on energy, down from 8 percent 20 years ago. Energy just isn't the largest or most important item in our personal spending. Even after the recent price increases, gasoline is still two times less than the cost of Evian water, and 10 times less than a Starbucks latte.

More Why We Can?t Quit | Newsweek Future Of Energy | Newsweek.com

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Workin' for the man means workin' for the Big Oil man...

'You're working for gas now'
March 24, 2008: The people of Camden, Ala. pay a bigger chunk of their income for fuel than anyone else in the country - meaning tough choices for the ever thinner family budget.

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Camden is a classic rural southern town - men sit on porches, shopping gets done at the general store. The county bills itself as the "hunting and fishing capital of Alabama." The main industries here are logging, farming, and, more recently, business related to the Hyundai plant which opened in 2005. But the county is poor - household income of $26,000 is nearly half the national average - and people have to travel a long way to work.

The combination of low wages and long travel times means the people of Camden, for the second year in a row, spent a higher portion of their income on gas than anyone else in the country, according to a new study from the Oil Price Information Service, a research firm that tracks data for AAA. In Camden, drivers put 13% of every paycheck right into the gas tank. In wealthy towns around New York City, people spend less than 2% of their income on gas.

For local businesses, an extra dollar spent in the tank means one not spent at the restaurant or hardware store. [Customer's] budgets are tightening," says William Malone, head of the local Chamber of Commerce. "They're cutting back any way they can." Malone, who also runs a local insurance company, said he's seen people cut back on their insurance plans, purchasing them with less coverage or higher deductibles. He's also seen a growing interest in smaller cars, a claim backed up by the local Chevy dealer.

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King wants to leave some oil for his kids...

Saudi Arabia to leave some oil finds for future
16 Apr 2008, Saudi Arabia's King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world's top exporter for future generations, the official Saudi Press Agency (SPA) reported.

"I keep no secret from you that when there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it'," Abdullah said in remarks. US president George Bush in January urged the Saudi king to help tame soaring prices by encouraging Opec to pump more oil. On separate trips to Saudi Arabia this year, the US energy secretary also asked for more oil, while the vice-president discussed high prices with the king.

The kingdom has spent billions on building over 2 million bpd of spare crude capacity and is the only country in the world able to bring online large volumes of crude supply quickly to deal with unexpected supply shortages.

Opec held production steady at meetings in February and March despite calls for more oil from the US and other consumers. Opec officials blame the high price on factors beyond the group's control such as the weak dollar, investment flows into commodities and speculation. Saudi oil minister Ali Al Naimi said last week that global oil markets were well supplied and there was no need to put more oil on the market, despite prices hitting a record of over $112 a barrel last week.

Source

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Rumors and controversy swirl around latest oil field discovery...

Brazilian Oil Story: From Brags to Glitches
April 18, 2008 - Rumors and Controversy Swirl Around Brazil's Latest Oil Field Discovery

Deep in the Atlantic Ocean, under a layer of salt, lies a massive oil field that could make Brazil a major player in global oil exports, speculators say. This oil field has sent spirits and markets in Brazil soaring, only to end in bickering and criticism. On Monday, remarks made by Haroldo Lima, the head of Brazil's national oil agency ANP, caused flutters of excitement when he revealed during a conference that the latest petroleum finding off the coast of Brazil -- the Carioca field -- could potentially contain up to 33 billion barrels of oil.

This would make it the third largest oil field in the world and turn Brazil into the seventh largest producer of oil. The excitement that Lima caused was quickly tempered, however, by a sobering statement from Brazil's state-run oil company Petrobras, which warned that so far no official figures had been presented to reveal the true volume of the Carioca field. The brags to glitches strategy triggered a flood of criticism.

Questions were raised over whether this was a deliberate act to boost Brazilian markets and Petrobras' share price. The front page of one of Brazil's major newspapers even questioned whether the company could face legal consequences for making such comments without official figures to back up the hype. There is also the question of ownership. Carioca is not solely owned by Petrobras. European energy companies Repsol and BG both own stakes in the field and the remarks caused ripples on major stock exchanges in Sao Paulo, Madrid and even New York.

More ABC News: Is Brazil the Next Oil Giant?

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If I recall in macro-economics class, the price of a commodity goes higher as demand goes higher and it becomes more scarce.

Oil Prices Hit New High, OPEC Chief Says $200 a Barrel Possible
28 April 2008 - Crude oil prices edged closer to 120 dollars a barrel and hit a new, record high, fueled by the shutdown of a key pipeline and concerns about violence in Nigeria.

Crude oil for June delivery hit $119.93 cents a barrel in New York Monday, before easing downward slightly in later trading. Oil prices surged after Britain closed a North Sea oil pipeline, which carries about 40 percent of the country's oil, due to a worker strike. There are also concerns about new attacks on oil facilities in Nigeria. Meanwhile, the president of the Organization of Petroleum Exporting Countries says oil prices could go as high as $200 a barrel.

According to the Reuters news agency, OPEC chief Chakib Khelil told Algeria's government newspaper, El Moudjahid, the high prices are a result of the dollar's slide, and have little to do with oil supplies. The record oil prices come as some economists expect two of the world's biggest oil companies, Exxon Mobil and Royal Dutch Shell, to announce record first-quarter profits.

In Britain, officials have arranged to bring in extra fuel supplies to make up for shortages caused by the strike. Seven tankers carrying about 65,000 tons of fuel are due to arrive in the next few days. Britain has seen prices at gas stations rise as consumers have ignored pleas from the government and rushed to buy gasoline before supplies run out.

In Nigeria, attacks on oil facilities are just part of the problem. The Nigerian government is trying to mediate a worker's strike at the Exxon Mobil affiliate. The facility normally produces 800,000 barrels a day, but workers walked off the job, demanding better pay and working conditions. Also today, the anti-corruption group Transparency International issued a report criticizing oil and gas companies for failing to fight corruption. The report rated 42 companies, saying most do not disclose enough information on their dealings with resource-rich countries, hampering efforts to eliminate poverty.

VOA News - Oil Prices Hit New High, OPEC Chief Says $200 a Barrel Possible

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What if Indonesia's wells aren't the only ones drying up??...

Indonesia Considers Quitting OPEC
May 06, 2008 - President Susilo Bambang Yudhoyono said Tuesday that Indonesia is considering quitting OPEC because it is no longer a net oil exporter.

"Our wells are drying," he said in the nationally televised speech, adding that the country needed to concentrate on increasing domestic production, which has dropped to less than 1 million barrels a day even as consumption rises. The government opened talks Monday on whether it "should continue to stay with OPEC or withdraw our membership ... until we reach a point where we deserve to rejoin that organization," Yudhoyono told governors and heads of regencies from all over Indonesia.

The country of 235 million people is Southeast Asia's only member of the 13-nation Organization of Petroleum Exporting Countries. But Indonesia has to import oil because of decades of declining investment in exploration and extraction due to corruption and a weak legal system that makes oil companies wary of doing business here. Indonesia's oil output has declined steadily from oil production of 1.5 million to 1.6 million barrels a day in the mid-1990s. It produced around 860,000 barrels a day of crude oil last month and recorded a deficit of $794 million in its oil trade accounts.

Raising output could take "one to three years," Yudhoyono said. It is not the first time the country has re-evaluated its OPEC membership, but in past years teams commissioned by the government have recommended staying in the grouping to maintain good relations with other oil producers, especially the heavyweights in the Middle East. OPEC was first formed in 1960 by founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.

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Uncle Ferd workin' out in the shed on a french fry oil powered bicycle...

High oil prices seen spurring alternative fuel shift
Wed May 7, 2008 WASHINGTON - Record U.S. crude oil futures near $124 a barrel have reached a "break point" that will spur a shift away from an oil-centric transportation sector toward alternatives, energy analyst Daniel Yergin said on Wednesday.

Yergin, chairman of Cambridge Energy Research Associates, told Reuters that U.S. crude oil prices -- which hit a record $123.93 a barrel on Wednesday -- will hasten the adoption of cellulosic biofuels made from switchgrass and woodchips, as well as battery-powered cars and fuels derived from coal. Crude prices have doubled in a year and risen sixfold since 2002 on rising demand from China and other developing countries, adding pressure to consumer economies already hard hit by a housing and credit crunch.

Yergin countered the notion that global demand for gasoline, jet fuel and other transportation fuels is chiseled in stone because drivers have few current alternatives. "Price really matters," Yergin said. "It doesn't happen overnight but the laws of economics have not been abolished."

A sagging U.S. dollar that has lost half its value against the euro since 2002 and a 350 percent surge in crude oil contract trading on the New York Mercantile Exchange have been the prime engine behind the oil price rise, Yergin said. With scant global spare oil production capacity, further dollar weakness could send oil prices to $150 a barrel in coming years, he said.

More High oil prices seen spurring alternative fuel shift | Special Coverage | Reuters

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Economists Blast US Corn Ethanol Program
07 May 2008 - The U.S. program subsidizing the use of corn for the production of fuel ethanol came under sharp criticism at a Senate hearing Wednesday. Economists told the panel the program leads to higher food prices.

Corn prices worldwide have increased by 50 percent over the past year. John Sununu, a Republican senator opposed to farm subsidies, says corn prices have risen in part because America is using increasing amounts of corn to produce fuel for automobiles. "When you're diverting a third of the [corn] crop to ethanol it has a real impact on prices," said Senator Sununu. "To produce a gallon of ethanol takes 1700 gallons of water. Thirty million acres of land, going to produce the corn for ethanol."

Calling the US ethanol program a disaster, Sununu said it is replete with taxpayer subsidies as both farmers and ethanol producers receive tax breaks from the government. In addition, he said, imports of cheaper sugar-based ethanol are blocked by high tariffs. David Beckmann, the president of a church-based anti-hunger agency, says US farm subsidies should be abolished. Such a move, he says, would help bring down food prices.

"To have a more dynamic, responsive [subsidy free] agriculture, that is going to bring down food prices in the medium term," said David Beckmann. Both Beckmann and Sunnunu spoke at a hearing of the Senate Homeland Security and Governmental Affairs Committee. Other experts told the committee ending the ethanol program could reduce corn prices by about 15 percent.

Josette Sheeran, the head of the Rome-based United Nations World Food Program, says the high price of oil has boosted the demand for food-based alternative fuels. This, she says, has contributed to the overall rise in food prices. "And so what we're finding is that often energy bidders can outbid food buyers and consumers, and the higher the price of oil is the higher the price the energy producers are willing to pay," said Josette Sheeran. Sheeran said in Africa palm oil and cassava are increasingly being used as alternative fuels.

VOA News - Economists Blast US Corn Ethanol Program

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Maybe we should do like the Frenchies do...

Is It Time To Tap U.S. Oil Reserves?
WASHINGTON, May 22, 2008 - Energy Secretary Tells Congress Dipping Into Strategic Reserve Won't Reduce High Gas Prices

With gas hitting a new high almost daily, some members of Congress pleaded with the energy secretary to release the nation's 700 million barrel emergency stockpile, reports CBS News correspondent Nancy Cordes. His response - that's not what it's for. "The strategic petroleum reserve is meant to be there as a protection for the American people," said Energy Secretary Samuel Bodman.

"The American people right now are being tipped upside down at the pumps and having money taken out of their pockets," responded Rep. Edward Markey, D-Mass. Bodman also told a House of Representatives hearing that he does not believe that rampant market speculation is causing record high oil prices that reached a record $135 a barrel. He said it is a matter of supply and demand that can be traced to essentially flat global production over the last three years.

Markey said he did not understand why President Bush is not releasing oil from the Strategic Petroleum Reserve to force down prices. "We have 700 million barrels ... that are ready to be deployed," said Markey. Mr. Bush recently stopped putting oil into the reserve after Congress passed legislation to halt deliveries. The stockpile, now 701 million barrels, "is meant to deal with ... the physical interruption of the flow of oil to our country. We don't have that issue today," he told the House Committee on Global Warming. Markey said the release of government oil is justified because "we're in an economic crisis" as high oil costs are driving gasoline to $4 a gallon and increasing other costs.

Oil from the Strategic Petroleum Reserve, three underground salt domes in the states of Texas and Louisiana, has been used twice to respond to supply disruptions or the threat of such interruptions: Just before and during the first Gulf War in the early 1990s and in response to the loss of Gulf of Mexico oil after Hurricane Katrina in 2005. President Bill Clinton in 2000 made emergency oil available to relieve prices and Markey said prices then dropped 18 percent.

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Oil Prices Prompt Protests In France
May 23, 2008 - Angry French Fishermen Disrupt Shipping, Block Oil Deliveries

French fishermen angry over soaring world oil prices disrupted shipping in the English Channel and blocked deliveries Friday at two refineries of oil giant Total SA, stepping up protests that have hobbled ports around France. Many fishermen have rejected a government offer earlier this week to speed up promised aid to help them cope with high fuel costs and are taking new actions to call attention to their plight.

Some 25 trawlers formed a line across the Dover Strait, a crucial and busy shipping passage between the Atlantic Ocean and the North Sea, according to the maritime administration of the Manche and Nord regions on the northern French coast. In what they called "Operation Snail," they traveled at a maximum of four miles (seven kilometers) an hour for more than four hours. The operation ended mid-afternoon, and no accidents were reported, despite a few close calls, the administration said.

Fuel costs have hit businesses of all kinds, from airlines to independent truckers. Air France-KLM reported it lost $853.22 million in the first quarter and warned of a challenging environment ahead, while Ford Motor Co. in the United States has cut back on North American vehicle production amid weak demand and high fuel prices. Meanwhile, Total SA and other major oil companies have reported increased profits. Oil traded at $131.15 a barrel in New York on Friday, down from an all-time high of $135.09 on Thursday.

French protesters also blocked delivery trucks from entering or leaving Total oil refineries at Dunkirk and Gonfreville on the English Channel, company spokeswoman Elisabeth de Reals said. She said the refineries were continuing to work as usual but could not take or make deliveries.

More Oil Prices Prompt Protests In France, Angry French Fishermen Disrupt Shipping, Block Oil Deliveries - CBS News

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Fuel price protests in Asia...

Fuel price demonstrations turn ugly in Indonesia
Sunday 25th May, 2008 - More than 100 protesters have been arrested in Indonesia after they hurled molotov cocktails at police on the weekend.

In protests against the rising price of fuel, angry students threw the homemade fire-bombs and burned tyres outside the National University in Jakarta. The demonstrations occurred after Indonesia hiked the cost of gasoline by 33 percent to rein in subsidies that are expanding along with world oil prices.

Other rallies broke out in the second city of Surabaya, where students commandeered a fuel truck from state-owned oil and gas company Pertamina. In Bandung, hundreds of hardline Muslims marched through the streets protest against what they called a government abuse of power

Millions of Indonesians live on less than two dollars a day and protesters say higher fuel prices combined with the recent surge in the cost of food will put an intolerable strain on family budgets. Indonesian motorists are now paying 33.3 percent more to fill their tanks with premium gasoline at 65 cents a litre.

Fuel price demonstrations turn ugly in Indonesia