July 2006 Archives

The UN called for a three day truce in Southern-Lebanon to open up ways for trapped children, elderly and disabled people and supplies but it has been rejected by Israel on the grounds that a humanitarian corridor to the area has already been opened up.

US Secretary of State Condoleezza Rice will be in Israel to discuss proposals for the deployment of the international force on the border.
Israel has indicated that it will stop the fighting as soon as the UN resolution is passed without insisting on the disarmament of Hezbollah but on the condition that Hezbollah will not move back into position close to the border.

However, the UN has stated that the death of its personnel may deter countries from contributing to the border force.

While Israeli strikes have killed no less than 600 people, Hezbollah has continued firing rockets into Israel threatening to attack central cities if the Israeli offensive continued.

Military sources reveal that though Israel would prefer a deal, the fighting could intensify if it doesn't get one.

Read

Picture Courtesy: www.flickr.com

Oil companies in the US have reported significant increases in their profits in the last quarter surprising even optimistic Wall Street analysts.

While ExxonMobil has reported a profit of $10.4 billion, Royal Dutch Shell has increased its net income by 40 percent from the previous year. BP and ConocoPhillips also reported similar boosts in profit and income.

Considering the demand for oil and the uncertainties regarding supply from the Middle East, the industry is expecting to continue its record breaking performance.

With gas prices as high as $3 a gallon, consumers and politicians have expressed iore over Exxon's profit.

The criticism is rather muted as compared to the public outrage following the rise in gas prices after hurricanes Katrina and Rita.

Exxon claimed a simple formula for success: Produce more fuel and command more prices for it.

As is the norm, subsequent investigations have found no evidence of illegal profiteering.

While Exxon Vice-President of investor relations stated that the company is investing in projects to bring in more fuel to help reduce prices, this has found little favor with a group called Exxpose Exxon who are instead demanding a cut in gasoline prices and offers of renewable fuel.

Though the company is increasing its capital spending, one-third of that increase is tied to rising costs of labor and equipment.

Read

As if the casualties and loss of human life as well as the effect on oil prices was not enough, the Lebanon situation has now extended itself to include an ecological crisis.

An attack by the Israel Air Force on a power plant has caused a 15,000 tonnes oil spill along almost 130 kilometers of the Beirut coast causing hundreds of oil-coated fish to be washed ashore.

There are reports of the oil spill reaching as far as outside the Syrian harbor of Latakia, 120 kilometers north of Beirut.
Lebanon has appealed to the UN for help. While under the UN contingency plan to deal with such pollution, countries such as Algeria, Cyprus and the European Union have expressed their willingness in assisting with a clean-up by hand drive along wide stretches of the coast, the operation cannot start until the military offensive stops.

A shipment from Kuwait containing material to help contain the spill was unable to start work due to the continuing hostilities.

Other factors seem to have influenced the disaster - a leak from an Egyptian commercial boat and Israeli gunboat hit by Hezbollah missiles and effluent from a cement factory in Northern Lebanon.

A major concern is that if the spill is not contained soon, it could spread to the rest of the Mediterranean.
Marine life has been heavily affected and will continue to be.
Read

Picture Courtesy: www.flickr.com

With reports confirming that the North Cuba basin has significant quantities of oil and Cuba opening its doors to foreign conglomerates with offers of production-sharing agreements, will America's trade embargo with Cuba become a thing of the past?

Many experts certainly feel that it will be absurd in the present times of rising gas prices and the unstable Middle East to sit back and let other countries take Cuban oil.

If Cuba becomes an oil exporter, America will have to look to its strategic interests and forget a policy that might be too costly to keep.

Read

Proposals for tackling the crisis in Lebanon are being discussed everywhere and by everyone.

While Bush and Blair after much dilly-dallying will present their plan for an international peacekeeping force in the region now controlled by Hezbollah to the UN next week, the chief opposition is expected to come from Israel who seem intent on destroying Hezbollah and Hezbollah which has shown their staying power.

On the other hand, a proposal agreed on by Hezbollah and Lebanon calling for an immediate cease-fire, prisoner exchange and beefing up of the existing UN force which seems to showcase Hezbollah's willingness to negotiate has been rejected by Israel.

So while peace talks continue and proposals keep being suggested, the fighting continues with more children dying than armed men.

Read

Picture Courtesy: www.flickr.com

Soaring prices, better refining margins annd higher oil and gas production all combined to yield ExxonMobil Corp a profit of more than U.S. $10 billion.

It was the second highest largest quarterly operating profit ever reported by a US company. While the profit sailed past trade forecasts and significantly increased share costs, it has also sparked off anger among consumer groups and lawmakers over profit amidst the high petroleum prices.

Exxon has raised its capital spending to US $20 billion to be used for fresh exploration and production. The company also plans to increase its stock buy back programme to US $ 7 billion to use its increasing hoard of cash.

OPEC President Edmund Daukoru visited Tehran as the third stop on his tour of OPEC producers.

Daukoru was quick to state that the present state of oil prices was not the fault of OPEC but rather a result of political tensions and refining shortages.
He reiterated that OPEC has crude spare capacities of more than 2 million barrels a day if needed.

Daukoru has called the current nearly $80 a barrel price "very uncomfortable" and in looking to deal with the issue.

Iran as the second largest supplier has oil traders worried. Iran is in a position to cut supplies if a U.N resolution is passed against its nuclear work or even if Israel attacks Iran's ally Syria as a part of the present Lebanese offensive.

Daukoru is in Tehran also for the purpose of discussing the dissent between Iran and Kuwait over the OPEc secretary-general post which has seen several acting secretary-generals since December 2003 when the last term ended.

The selection process for the post often reveals the political divisions between core OPEC members.

Read

Picture Courtesy: www.flickr.com

Trust the Japanese to come up with an idea like this... and to carry it out!
The Tokyo Institute of Technology flew a plane powered by 160 AA batteries! The plane, which has a wingspan of 31 meters was manned and stayed in air for 59 seconds covering a distance of 391 meters.

The project was envisaged by the Tokyo Institute of Technology and giant electronic firm Matsushita.
The plane will be displayed at the JR Tokyo Station for a week starting July 31 but students of the institue are also hoping for recognition by the Japan Aeronautic Association.

Read

A proposal for nuclear cooperation between India and the United States was passed by an overwhelming majority of 359-68 votes in the House of Representatives on Wednesday.

However the tougher round for the Bill will come in September when it is to be voted on by the Senate.

The deal has been criticized both in the United States and in India with advocates of non-proliferation in the U.S concerned that India could easily use domestic atomic supplies for military purposes.
India will also get access to U.S nuclear fuel and equipment.

Detractors of the deal in India have accused teh government of submitting to tough conditions imposed by the U.S and compromising nuclear security.

While New Delhi is happy with the preliminary outcome, Prime Minister Singh cautions that the determining factor will be the consistency between the parameters discussed and what eventually emerges.

While the House of Representatives victory is indeed heartening for India, the real challenge will be the Senate where all the advocates of non-proliferation are.

Read

With double trouble brewing in Nigeria, oil prices rose all over again in an unending battle of crisis and peace.
Militant attacks on an Italian oil facility and a leak in a Shell Petroleum Development Co. pipeline has caused a singnificant drop in crude oil production leading to mounting prices.

On the New York Mercantile Exchange prices for light, sweet crude rose to $74.59 a barrel while gasoline, natural gas and heating oil futures also saw a upward swing.

The Niger Delta has seen many disputes over the years between oil companies and communities demanding a larger share of the wealth reaped by Africa's largest crude producer.

Traders have also been keeping an eye on the Israel-Lebanon conflict. Oil prices had hit a high 2 days after the fighting broke out but seemed to settle with hopes of the violence remaining contained. Since then, the conflict has escalated with Israel suffering its heaviest losses today and retaliating with jet pounding. Al-Qaida has also jumped into the fray threatening to attack Israel.

If a regional war breaks out and supplies from Iran are disrupted, prices could well sky rocket further.

Adding to this, the U.S. Energy Department said that the demand for gasoline had increased since the previous year by 2 percent despite the heavy pricing.

Read

Armed invaders from the local Ogbainbiri community in Nigeria have occupied a pumping station owned by Italian Company Agip, the fourth largest oil producing company in Nigeria.

The grievances of the community are communal. Agip has failed to cleap up an oil spill in the area and provide shore protection around the community.

Though the peace talks with the invaders have not led to a breakthrough, officials of the Bayelsa state hope to resolve the crisis soon since the resultant loss in crude oil is no less than 35,000 barrels a day.

Kidnappings and militant attacks on oil facilities in the Niger Delta since the beginning of the year have resulted in losses amounting to $35 million daily!

With the approach of the general elections in the coming year, Nigerian officials are worried that the attacks may worsen.

Read

Picture Courtesy: www.flickr.com

While top U.S. and European officials agreed that immediate action should be taken to halt the fighting in Lebanon, the views on 'immediate' differed.

Most European powers want Israel to stop its brutal offensive against Hezbollah that is harming Lebanon now. But the United States believes that this would leave the militia battered but defiant and that Israel should be given time to pound them into submission.

While the officials of 15 nations, UN Secretary General Kofi Annan and represntatives of EU and World Bank at the Rome meeting expressed 'deep concern' over the crisis and the high number of civilian casualties, their conflicting approaches to the crisis were evident.

Italian Foreign Minister hinted at these differences by stating that many participants wanted an immediate truce to end hostilities. But Rice deflected the issue of Israel's offensive with talk of a more sustainable peace.

Lebanese PM Saniora had cause to be disappointed with the answer to his appeal for peace saying that the current violence has brought his country, still rebuilding itself from the civil war, "to its knees."
He recognized that the Israeli offensive had been brought about by the Hezbollah's incusrion over the UN border, but that the military retaliation by Israel was "disproportionate" and he urged the world leaders to keep working towards a cease-fire.

The one concensus reached in the conference was the need to set up a new multinational force under the U.N. mandate that would be tougher and morecapable of bringing about an end to violence in the area.

Italian Premier Prodi insisted that Washington was not alone in its quest for durable peace. Both Britain and Germany agreed that an immediate tuce was not possible.

Finally, Washington was supported in its position despite the large scaleloss of civilian property and life, as the others also approved the extension of the Lebanese government to the south by disarming the Hezbollah militia once and for all.

Israel did not attend the conference but stated that it expects action in support of the Lebanon army to disarm the Hezbollah to come from the conference otherwise it is forced to defend itself.

Israel also supports the multinational force to be deployed. The mandate of the force would be discussed over the next few days with Italy pledging troops if it is under the United Nations.

Rice shares Israel's concern over the Iran-Syria backing of the Hezbollah and affirms that the international force will be put together urgently.

Annan said the emerging force would help Lebanon exert its authority and disarm Hezbollah by implementing existing U.N. resolutions.

Read

At the meeting in Rome that was held to try and resolve the Israel-Hezbollah conflict, U.S. Secretary of State Condoleezza Rice said the problem and solution are far broader in scope than the present conflict.
It is a battle for democracy and the sovereignty of Lebanon.

The United States sees oppurtunity to help Lebanon emerge stronger, so as to deal the enemies of peace and stability in the region a far reaching blow.

The United States strongly believes that Iranian and Syrian forces are encouraging and abetting radical and terrorist groups and disrupting peace in the region.
Iran in particular is thought to have facilitated the July 12 Hezbollah cross-border raid that sparked off the conflict.

The administration is re-focusing attention from Israel's brutal and punishing bombardment of Lebanon to the question of freedom.

A broad agreement about regional democracy may not be at hand, but that a more effective international force to be deployed in southern Lebanon is to happen. Whether the force would be deployed before or after the Hezbollah is disarmed remains to be seen.

Read

U.S. Energy Secretary Samuel Bodman and Iraqui oil minister Hussein al-Shahristani met executives from oil companies in an effort to attract interest in Iraq's untapped oil and natural gas reserves.
The company's that were represented at the meeting include ExxonMobil Corp, Chevron Corp., Royal Dutch Shell PLC and Marathon Oil Co.

Al-Shahristani stated that he would like to sign contracts with major oilcompanies by the end of the year for partnerships aimed at opening up Iraq's resources to the world market.

The oil minister who is on an official visit to the U.S. said the preliminary meeting was to lay out the principles of the partnership and that Iraq is not in talks with any specific company yet though they would like to move fast and reach agreements before the hydrocarbon law is enacted.

The hydrocarbon law of the Iraqui Parliament is to set up the legal framework for energy sector investment.

He also stated that the country is working to increase its crude oil production from the present 2.5 million barrels a day to 3 million by the end of the year and to 4.5 million b/d in 4 years.

Meanwhile, Iraq's Minister of Electricity, who accompanied the oil minister to the States signed a Memoradum of Understanding with the U.S. Energy Deaprtment aimed at increasing cooperation on energy analysis and technology. The Iraqui Parliament is still to approve the agreement.

Read

Malaysian national oil company has increased its bid for global expansion by buying shares worth US$1.1 billion in Russia's OAO Rosneft.

Petronas chief executive, Hassan Marican, stated that since the company is looking to be a global player, they must have a hold in Russia and have not ruled out raising the stakes.This move helps Petronas to reduce its geographical risk.

More than half of Rosneft's share sale was bought over by 5 investors - three foreign oil companies including Petronas, a Russian state-controlled bank and a mystery individual.

Rosneft is Russia's No.3 oil producer, but faces lawsuits, has issues with its corporate gorvernance and has larger debts and lower production capacity than its peer OAO Lukoil.When questioned Hassain dismissed concerns over the risk of investing in the company.

He also confirmed that Petronas Gas will carry out a multibillion dollar project to build a 480-kilometer pipeline from Sabah to processing plants in the neighbouring Sarawk state for carrying liquefied natural gas.

Hassan stated that Petronas is exploring deals in neighboring countries and has held talks with China National Offshore Oil Corp. to supply liquefied natural gas for its Shanghai terminal.

Read

The 'United States-India Energy Security Cooperation Act of 2006' was unanimously passed by  the US Senate. It calls for increased understanding between the two countries on their energy policies and strategies, and collaboration between the countries on the research, development, deployment of alternative energy and enhancing global energy security.

The Bill also empowers the US President to establish programmes to support research that leads to reduced oil dependency.

Read

The violence that broke out on July 12 between Israael and Hezbollah militants in Lebanon led to a record $78.40 a barrel in crude oil prices.

Refinery problems in the U.S. and an unexplained pipeline leak that led to Shell shutting down production in Nigeria kept the prices high.

Though the prices have been topsy-turvy, since Tuesday, there has been a drop in the oil prices. While there is no apparent catalyst for this, brokers believe it could just be 'some old- fashioned profit-taking.'

And the fact that the fighting hasn't escalated into a regional war which could disrupt supplies has helped in the decline from $78 a barrel.

Read

After years of being considered the non-productive hobby of nature lovers, wind energy is on an upward trajectory, especially in the export market.

Financial report for 2005 and half of 2006 show the upswing with the German wind energy sector making up about $ 5 billion of the global $ 13.4 billion in sales.

The export of German-made wind energy equipment has risen significantly over the past 2 years with their biggest importer being the US where wind energy production is growing.

Despite increased exports, Germany has seen a drop in domestic sales due to unclear laws on wind power facility establishment and citizen protests about wind farms near their localities.

In the current climate of increasing energy  insecurity, environmental hazards and shaky oil prices, it is hopeful to note that that percentage of energy produced by wind energy doubles every three years.

In Germany, it s still a concern that the wind energy sector is largely dependent on exports and has a way to go before it makes a real dent in the need for energy production with fossil fuels.

The one problem for this sector is that other energy producers might have to jump in if winds in Germany die down over a period. But advocates of wind energy say that the German limit lies between 20 and 25 percent and the current production is only 6.8 percent.

The federal government of Germany aims to produce 20 percent of its energy needs through enviromentally friendly methods by 2020.

What Watts Going On will watch out for: The energy summit in October that is to push for more resources being invested in wind energy production.

Read

Picture courtesy: www.flickr.com

While DaimlerChrysler is experimenting with plug-in hybrid cars and GM is considering them, Toyota roared in this week and announced that it would develop environmentally sound plug-in hybrid electric vehicles.

Other announcements that can be greeted with cheer by green minded automobile users were made by Ford.
Ford UK declared it will spend $1.86 billion on everything from biofueled vehicles, to clean diesel to hybrids. Ford US stated that it is pushing its hybrid research and development off the homeland and on to Sweden. The company  also said that while car manufacturers will do their part, global warming is an universal problem and everyone from fuel companies and governments need to contribute in the effort against it.

It called for fiscal stimulus to be provided by the government and stated that the marketplace and not the government should decide which technology is best. The fiscal stimulus for Toyota's Prius has run out with the company selling 60,000 vehicles that are eligible for tax credit.

Ford's governement-should-let-us-decide statement makes Toyota's announcement all the more stunning since the company is not obligated to develop the plug in hybrids and is doing so based on its ability and market demand.

Given the current state of unsteadiness in the Middle East, a plug in hybrid would be welcome as soon as Toyota can manage it!

Read

The proposed India-U.S. nuclear deal pending in the Congress seems to put a spoke in the global non-proliferation efforts.

While the strategic importance of the U.S.-India bilateral relationship cannot be gainsayed and advocates of the deal suggest India is a responsible nuclear steward, it is certainly a concern how after providing an exception to the nuclear rules for one country, how other countries can be expected to follow them.

The proposal is startling in that it gives India all the benefits of being a recognized nuclear weapon state with no overt resposnibilities.
Under the proposal India is not required to stop producing nulclear materials nor provide certifiation that it will not increase its production of enriched uranium for weapons. Its power reactors don't come under international inspection.

This policy extending to one country is likely to encourage others to deviate from the non-proliferation rules.

The danger of abandoning the non-proliferation treaty is that it weakens the basis for opposing the nuclear ambitions of North Korea and Iran and opens up the world to the horrible possibility of a nuclear weapons free-for-all.

The most desirable scenario would be if India signed the non-proliferation treaty. Failing that, India must prove that U.S. technology and materials will be used only for civilian purposes and that reactors that supply electricity to the civilian sector must be opened up to international inspection. Finally, India must commit to disarmament and a binding promise not to encourage non-nuclear weapon states to manufacture or acquire nuclear weapons.

If India fails to make these commitments, we need to prepared for the likelihood that Pakistan and China will pursue a similar deal.

Read

In depth coverage of energy news and everything related to it.