Recently in U.S. Government Category

 The U.S. Demand Response Coordinating Committee (DRCC) today announced that a National Town Meeting on Demand Response and Smart Grid will be held in Washington, DC, on June 23-24.

The DRCC announced that, among other areas, the National Town Meeting would be focused on implementing the National Action Plan on Demand Response and Smart Grid required by Congress in the Energy Independence and Security Act of 2007 (EISA). FERC is presently developing the Plan and the Act calls for FERC and DOE to work together to implement it.  Another focus area, according to the DRCC, will be a review of progress on the DOE smart grid grant programs.

The National Town Meeting is a non-profit event known for featuring a large number of roundtable sessions where all of the latest business and policy developments are discussed and debated.  No other event brings together all parts of the DR & Smart Grid community--utilities, policymakers, technology companies, ISOs and stakeholders--and puts them all in the same room if not at the same table to talk about customer acceptance, cybersecurity, interoperability and other important issues.

At the National Town Meeting held in Washington last year, over 400 members of the demand response and smart grid community came together to hear from such keynote speakers as Congressman Jay Inslee (D-WA) of the House Energy and Commerce Committee; Jon Wellinghoff, Chairman of FERC; Garry Brown, Chairman of the NYS Public Service Commission; top leaders from DOE and EPA; and Executives from smart grid companies like Google and Microsoft as well as utilities like Ameren, PG&E, National Grid and Southern California Edison. Close to 50 different utilities and state commissions were represented by at least one attendee and some had multiple participants.

The 2010 National Town Meeting--the 7th to be held--will also be focused on information sharing and dissemination, and it will feature multiple tracks of presentations on case studies, program deployments, and technology demonstrations.

Dan Delurey, Executive Director of the DRCC, said, "The 2010 National Town Meeting on Demand Response and Smart Grid promises to continue to be the national forum for bringing together the DR & Smart Grid community so they can share experiences and learn from each other.  In addition to all of the key issues to discuss, this year will be particularly important as FERC will have just completed its National Action Plan on Demand Response and sent it to Congress.  The National Town Meeting will be the first opportunity to talk about how to put the Plan into action.  We hope all members of the community will attend and help in that effort."

Registration for the 2010 National Town Meeting on Demand Response and Smart Grid opens on March 15, 2010. More information on the upcoming as well as on past National Town Meetings can be found here: www.smartgridtownmeeting.com.

The DRCC is a 501(c)3 non-profit organization dedicated to the development and exchange of information and expertise about demand response and smart grid. Its members include Ameren, American Electric Power, Arizona Public Service, DTE Energy, ISO New England, Landis+Gyr, Midwest ISO, National Grid, NYSERDA, Pacific Gas & Electric, PJM Interconnection, Progress Energy, Salt River Project, San Diego Gas & Electric, Southern California Edison, Southern Company, Tennessee Valley Authority, Viridity Energy and Wal-Mart. More information on the DRCC can be found at www.demandresponsecommittee.org.

The DRCC is the sponsor of the 2010 National Town Meeting on Demand Response and Smart Grid, to be held in Washington, DC, on June 23-24.  For more information, go to www.smartgridtownmeeting.com.

SOURCE Demand Response Coordinating Committee

The following is a statement by John McEleney, chairman of the National Automobile Dealers Association, regarding the Model Year 2011 fuel economy standard:

"By setting a fuel economy standard higher than what California regulators have proposed, the Obama administration today removed the last argument for state-by-state regulation of fuel economy. The structure of California's program -- with its exemptions for major automakers, its 'patchwork' design and its loopholes -- is unworkable as a national policy.

"Only a single, national fuel economy standard gives the auto industry the regulatory certainty necessary to produce and market the fuel efficient cars of tomorrow. In contrast, California's patchwork fuel economy program would exacerbate the auto sector's severe economic turmoil.

"Now that the new Corporate Average Fuel Economy (CAFE) law, passed by Congress in Dec. 2007, is at last being implemented, America's auto dealers call on all stakeholders, including the Obama administration and California regulators, to embrace a single, national fuel economy standard."

CAFE is actually higher than CARB's standard.

The CAFE standard set by the Obama administration for model year 2011 is 27.3 mpg for the light duty fleet, which includes passenger cars and light trucks. Source: Associated Press, March 27, 2009

The California Air Resources Board (CARB) standard for model year 2011 is 26.7 mpg for the light duty fleet, which includes passenger cars and light trucks. Source: CARB, "Comparison of Greenhouse Gas Reductions for the United States and Canada Under U.S. CAFE Standards and California, An Enhanced Technical Assessment," Feb. 25, 2008, page 10.

SOURCE National Automobile Dealers Association

Tony Blair joins Senators Bingaman, McCain, Snowe and Stabenow on Capitol Hill for Climate event. Senators, Governors, business leaders and international experts met in the Capitol today to discuss the prospects for U.S. domestic action on climate change.

Many of the participants stressed that action to reduce greenhouse gas emissions should not be delayed by the global economic downturn because it provides an opportunity to lay the foundations for a sustainable recovery based on low-carbon growth.

The symposium, "U.S. Climate Action: A Global Economic Perspective" was convened by Senators Jeff Bingaman (D-NM), John McCain (R-AZ), Olympia Snowe (R-ME) and Debbie Stabenow (D-MI).

During the opening session, the former UK Prime Minister, Tony Blair, argued that the leading economic powers around the world now understand the significant risks of climate change and appreciate that the best way to minimize the dangers is by investing in a low-carbon economy.

Mr. Blair said that the U.S. can send an important signal to the world about the importance they place on tackling global climate change through the progress it makes on its domestic climate policy over the next few months.

Senator Bingaman said "Today's bipartisan gathering of leaders to discuss how to move climate policy forward in the current economic crisis is constructive. A responsibly-designed national climate policy will create economic opportunities and jobs and spur investment in low-carbon technologies that will make U.S. businesses more competitive. The costs of climate policy can be mitigated with the right policy measures, and we need to move ahead with both energy policies and a national cap and trade program to sustain these investments."

"This was a great meeting where we discussed the key issues surrounding climate change policy with international leaders, such as former Prime Minister Tony Blair, who have already gained valuable insight on how such policies may affect manufacturing and economic opportunities," said Senator Stabenow. "For me, the bottom-line of any future climate change bill must be jobs. Climate policy can help re-build the middle class and create jobs in states like Michigan where we have the manufacturing base and engineering know-how to produce the new technology that will be needed. I intend to keep jobs and common sense at the top of the list of considerations as the climate policy discussion continues."

Governors Jim Doyle of Wisconsin, Jennifer Granholm of Michigan, and Timothy M. Kaine of Virginia provided their perspectives on the impact of climate policy on regional competitiveness, particularly with respect to impacts on U.S. jobs. Governor Doyle said "Global warming demands aggressive action at the international, national, state, local and individual levels. By combining Wisconsin's knowledge, skills and resources with those of our global neighbors, we can develop the solutions necessary for a clean energy future. The environmental and economic consequences of climate change and our dependence on fossil fuels affect everyone, and working together we will be able to generate new technologies, new businesses, new jobs for our citizens, and a cleaner and safer world for generations to come."

"In Michigan our top priority is growing the economy and creating jobs and that is why comprehensive climate change legislation is important to our state," said Governor Jennifer M. Granholm. "Not only will this legislation advance clean energy technologies that reduce U.S. dependence on foreign oil, it will create millions of new green jobs, and protect our natural resources and that is critical for a state like Michigan that has lost hundreds of thousands of manufacturing jobs."

There was strong agreement about the importance of boosting economic growth and combating climate change at the same time, and participants recognized that low-carbon investments will not only be good for jobs and economic recovery but will also improve the country's energy security and begin to cut its greenhouse gas emissions.

John Chambers of Cisco, Jeff Immelt of GE, Vinod Khosla of Khosla Ventures and Jim Rogers of Duke Energy, provided perspectives from business. Jim Rogers said "I have long been a supporter of enacting climate legislation because it will take decades to slow, stop and reverse greenhouse gas emissions. However, the 100 percent auction contained in the President's budget will unnecessarily punish the 25 states that get the majority of their electricity from coal. That represents nothing more than a tax and a wealth transfer, and it has nothing to do with meeting our environmental challenges. Congress needs to enact climate change legislation, but they also must get it right."

International policymakers, Ed Miliband, Connie Hedegaard and Tony Blair said that strong U.S. action on climate would galvanize further action across the world. Lord Nicholas Stern, author of the highly influential report "The Economics of Climate Change: The Stern Review" in 2006, said: "The U.S. has a real opportunity to take a lead given the creativity of its entrepreneurs and its technical talents."

Lord Stern added: "Low carbon growth is the only growth story, because high carbon growth would eventually choke itself off. The world would react strongly to an America lead as we go forward to build an international deal at the United Nations climate change conference in Copenhagen at the end of this year."

Nobel Prize winning U.S. economist Professor Joe Stiglitz agreed, stating that "Countries around the world have been waiting for the U.S. to take leadership but they have not been sitting idle. Many countries have set out domestic plans of action on reducing their emissions. It is now the turn of the U.S. to use its power of example to motivate key countries to work together and find a global solution to this global problem."

Secretary of State Hillary Clinton's climate envoy, Todd Stern, addressed the group on the discussions he has conducted to date with international policymakers on the importance of global collaboration ahead of the United Nations Climate Change conference in Copenhagen in December.

The event was organized by three leading Washington think tanks, the Center for Global Development (CGD), the Peterson Institute for International Economics, and the World Resources Institute (WRI), together with the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science (LSE), which is chaired by Lord Nicholas Stern.

About the Partners

1. The Center for Global Development is an independent think tank that works to reduce global poverty and inequality by encouraging policy change in the United States and other rich countries through rigorous research and active engagement with the policy community. www.cgdev.org

2. The Peterson Institute for International Economics is the only research institution in the United States devoted to global economic issues. It was recently rated "Top Think Tank in the World" by the first comprehensive survey of more than 5000 such institutions in all countries. www.petersoninstitute.org

3. The World Resources Institute is an environmental think tank that goes beyond research to find practical ways to protect the earth and improve people's lives. www.wri.org

4. The Grantham Research Institute on Climate Change and the Environment was established in 2008 at the London School of Economics and Political Science. The Institute brings together international expertise on economics, finance, geography, the environment, international development and political economy to establish a world-leading centre for policy-relevant research and training in climate change and the environment. It is funded by the Grantham Foundation for the Protection of the Environment. www.lse.ac.uk/grantham

SOURCE Center for Global Development

Echoing the same energy and climate change policies that President Obama trumpeted in his speech to Congress last night, a group of 35 investors with over $3 trillion in assets today called on Congressional leaders to pass strong legislation to advance a clean energy, low-carbon economy and U.S. competitiveness.

In a letter delivered this morning to House and Senate leaders and the Obama Administration, U.S. investors specifically called for adoption of the following policies: a strong national Energy Efficiency Resource Standard; a national Renewable Portfolio Standard (also called a Renewable Electricity Standard); a mandatory national climate policy to reduce greenhouse gas emissions economy-wide; and a low-carbon fuel standard and other transportation policies to lower use oil use and greenhouse gas emissions.

Coordinated by Ceres and its Investor Network on Climate Risk, the letter was signed by leading pension funds such as the California Public Employees' Retirement System (CalPERS), the California State Teachers' Retirement System (CalSTRS); large asset managers including BlackRock and Deutsche Asset Management; nine state treasurers; three state/city comptrollers; two labor pension funds -- SEIU Master Trust and UNITE HERE -- as well as other investors (see full list of signers below).

The letter states that strong energy and climate action is 'essential' for long-term economic prosperity and that the costs of inaction could be 'economically debilitating.' "We are convinced that building our nation's low-carbon energy infrastructure is an important part of the solution to our current economic crisis. Delaying action on these policies will deny U.S. families and businesses access to low-cost clean power, reduce our nation's energy security, and require more stringent, costly solutions to address climate change in the future," states the letter.

"The value of aggressive, national action to fight climate change and remake our energy and transportation sectors cannot be overstated," said California State Treasurer Bill Lockyer, a board member of the nation's two largest public pension funds, CalPERS and CalSTRS, with approximately $300 billion in combined assets. "The benefits will extend far beyond the environment. If we succeed, we will secure long-term security and prosperity for our economy, our businesses, and our workers and families, and in the bargain save taxpayers and consumers billions and billions of dollars."

"The policies outlined in the letter would allow us to invest our clients' assets with appropriate cognizance of the continuing risks -- and exciting opportunities -- that will result from physical, regulatory and technological change spurred by a changing climate and the policy response," said Alex Popplewell, global co-head of responsible investment at BlackRock, which manages $1.3 trillion in assets. "2009 will be a year of intense investor focus on the architecture of global agreements on climate change policy. We see it as essential that the United States play a full and urgent part in both clarifying its domestic approach to this complex issue and contributing to the successful conclusion of international agreements."

"Strong national climate and energy legislation will send clear market signals to the business community -- creating new industries, putting people back to work, and helping move American companies to the forefront of global competitiveness on clean energy," said Mindy S. Lubber, President of Ceres and the Director of the Investor Network on Climate Risk, an alliance of 77 investors with approximately $7 trillion in assets. "An energy efficiency resource standard is a critical component of such legislation and is equally as important as a renewable energy standard," she added.

Calling energy efficiency and conservation the "fastest, easiest, and cheapest ways to significantly reduce greenhouse gas emissions and improve the bottom line of companies," the letter urges passage of a national Energy Efficiency Resource Standard that would set national energy savings targets and save utility customers up to $144 billion by 2020, according to estimates provided by the American Council for an Energy Efficient Economy. "Energy efficiency is the cheapest form of power we can produce and it is time for national policy to step in and tell electric utility companies that they need to shift their business practices to deliver a lot more of it," states the letter.

The letter assigns high importance to sending a signal to the markets that greenhouse gas emissions will carry a price. "National climate legislation acting in harmony with the market will facilitate greater investment in clean technologies and other climate change solutions and will enable the U.S. to not only compete globally, but to lead," it states.

To facilitate rapid deployment of existing and emerging technologies, the letter urges Congress to enact a strong national renewable portfolio standard (also referred to as a renewable electricity standard), a policy already in place in 29 states.

Stressing the need to extend clean energy policies to the transportation sector, the letter urges legislators to: adopt a national low-carbon fuel standard, support expansion of public transit and legislation to promote the reduction of vehicle miles traveled, adopt performance-based incentives to stimulate the development of new technologies and adopt maximum feasible fuel economy standards.  SOURCE Ceres, Boston, MA and INCR, Boston, MA

Speaker Nancy Pelosi spoke this morning at the National Clean Energy Project Roundtable, held at the Newseum and hosted by the Center for American Progress Action Fund and chaired by Senate Majority Harry Reid. Other speakers included former President Bill Clinton, former Vice President Al Gore, Energy Secretary Steven Chu, Congressman Edward Markey, Chairman of the House Select Committee for Energy Independence and Global Warming.

The forum discussed policies and strategies to build a clean energy smart grid and expand the use of domestic alternative fuels. Below are the Speaker's remarks as prepared:

"I would like to thank the Center for American Progress Action Fund for hosting the National Clean Energy Project Roundtable and to thank the chair of this event and one of America's boldest leaders in creating a clean energy future, my friend Senate Majority Leader Harry Reid.

"In a time that demands bold ideas, this forum brings together some of the most innovative and visionary thinkers in our nation. I come here to thank you for your efforts to tackle the greatest challenges of our time.

"America was founded upon the tradition of bold thinkers ensuring opportunity for future generations. More than 200 years ago, Albert Gallatin, Secretary of the Treasury under President Thomas Jefferson, submitted a plan to Congress to develop America's infrastructure.

"As Secretary Gallatin said at the time, his vision of roads and canals to unite our young nation could not 'be left to individual exertion.' He understood that public capital was needed for the public good.

"And because of his vision, America grew: the Erie Canal, the transcontinental railway, and the national road all are products of Gallatin's plan.

"It is in the tradition of Albert Gallatin that a century later, in 1908, Theodore Roosevelt launched a similar commitment by convening a White House Conference on Conservation to preserve America's natural beauty. That led to the creation of the National Park Service and helped a growing America remain a green America.

"Today again, we stand at a crossroads, with an opportunity to reinvest in America for the next generations.

"This issue is the flagship issue of my Speakership, and when Democrats took control of Congress two years ago, I formed the House Select Committee on Energy Independence and Global Warming, chaired by Ed Markey.

"I am also proud that Congress passed comprehensive energy legislation, signed into law in December 2007, which for the first time in almost 30 years increased fuel efficiency standards.

"We are also hopeful that this year we will be able to pass a renewable electricity standard - President Obama is proposing 25 percent by 2025. We can build a superconducting smart grid that will allow wind or solar power to travel from America's plains or deserts or even rooftops to our cars.

"Last week, President Obama signed the American Recovery and Reinvestment Act to create and save 3.5 million jobs with new investments in health, education, science, infrastructure, and in clean, efficient American energy.

"The recovery package will also help bring our country's electrical infrastructure into the 21st century. With these investments, we will begin updating our aging transmission networks to make the power grid smarter and greener.

"Mr. Markey and I were just at an energy conference in Italy and modernization of the grid was of the highest interest to the participants. We cannot move to a clean energy economy that relies on renewable and energy efficiency without deeper investments in transmission systems.

"Many states have already begun to adopt innovative policies to move toward more clean, efficient transmission systems. But what we need is a national framework for planning, developing, and financing transmission infrastructure.

"As you may know, the recovery package requires the Department of Energy to do a study on the transmission issues facing renewable energy, which should help guide Congress.

"We have an opportunity to shape this framework as Energy and Commerce Committee Chairman Henry Waxman works with his colleagues on legislation to address global warming and promote energy independence.

"We must change the energy marketplace so we can save our country and our planet. We began with the 2007 energy bill, we continued it in the stimulus package, and now we must complete the work. It is a moral, environmental and health, economic, and national security issue.

"You have assembled a distinguished panel of experts to deal with complicated issues surrounding how we connect, transmit, distribute and use the power that provides the engine for our economy.

"I look forward to hearing about the best thinking that comes from your discussions. Together, we can ensure the next generation of innovation, discovery, and growth for America."

SOURCE Office of the Speaker of the House

While announcing a $15 billion annual investment plan to tackle climate change by building a clean energy future, president- elect Barack Obama urged top government officials from all over the world to cooperate in solving this problem. At the Bi- Partisan Governors Global Climate Summit in Los Angeles which was attended by top officials from India, China, Brazil, Britain, Canada, Indonesia and Australia apart from governors from 22 key U.S. states, Obama stated that his presidency would mark a new chapter in American leadership of climate change that would strengthen American security and create millions of new jobs in the process.
To read the whole article on the Times of India website click here.

Oklahoma is geared to become a leader in the renewable energy industry. With a huge wind corridor in western Oklahoma and lots of investments being made in the development of perennial native grasses as biofuels, Oklahoma is quite focussed on adhering to President- elect Obama's visionary goals to make America, energy independent in the years to come.
The state has the potential to generate 40,000MW of wind energy in their western region. With Obama's administration planning to introduce wind energy into the national grid, Oklahoma could profit a lot if they develop their wind energy industry.
Added to this, their plans to convert perennially growing switchgrass into a biofuel, could find Oklahoma emerging as a leader in the renewable energy sector even as the whole world attempts a meteoric shift towards making their economies run on renewable energy.
To read the complete article on the Forbes website click here.

Barack Obama is seriously debating creating an Energy Security Council within the White House that would operate in tandem with other Whitehouse entities, especially the Council on Environmental Quality. The creation of the new council is based on a white paper written by former President, Bill Clinton's, Chief of Staff, John Podesta, who is overseeing the President's transition.
To read the complete article on mlive.com click here.

Pic courtesy jmtimages from flickr.com

Massachusetts is ahead of the rest of America in implementing the president- elect's energy plan which focuses on combating climate change and becoming independent of oil. The states energy and environmental policies already attempt to improve energy efficiency, use more renewable energy and create more green jobs.
To read the complete article that details the advantages, disadvantages and obstacles that lie in the path of the state in adhering to such a plan by Erin Ailworth on boston.com click here.

President- elect Barack Obama's clean energy policies to alleviate America's dependence on foreign oil find favor with several clean energy industries.
ECOtality Inc, a leader in clean electric transportation and storage technologies praised Obama's paln to make the U.S. a leader in climate change by providing people more jobs in the renewable energy industry with targets such as, that of putting 1 million Plug- In Hybrid cars on the road by 2015 and of converting ten percent of electricity generation sources into renewable sources by 2012.
To read the whole article on the marketwatch website click here.

True to his word, President- elect Barrack Obama is set to start work on creating jobs for the people of America by encouraging a legislation to convert America’s economy into one fuelled by renewable energy production first thing next year. Although he is waiting until the economy improves to begin his full fledged fight against climate change with a climate change bill, energy is getting priority now because unemployment is at a five year high so he has to create jobs.
Obama is planning for the long- term benefit of the nation and the world through this plan. George Bush fought a war on terror, Obama is fighting one against global warming. His focus may just take the entire world’s mind off terrorism and put it back on development instead. With a $150 billion investment over ten years, Obama wants to create over five million jobs in the auto and clean energy industry.     
The first American president who has risked the displeasure of big oil companies in America by stating that he may block offshore oil and natural gas drilling if it was required to woo alternative energy investments and more fuel efficient cars, Obama is preparing the American economy and its people for a future independent of the phantom of diminishing oil reserves.

His victory brings hope to people not just in America but all across the world as it signifies a tectonic shift in American governance which has only seen blatant favoritism towards the corporate lobby in the past ten years.

At the G-8 summit in Russia, President Bush and Prseident Putin announced that they would cooperate in the rapid expansion of nuclear energy worldwide. The Bush government feels that the future energy security of the US depends on increasing reliance on nuclear energy and the agreement with Russia was the latest in a long line of initiatives to promote nuclear power.

A technology that brought about the horrific Chernobyl meltdown and the Three Mile island accident and that lay for years in scientific purgatory has been resurrected in today's high oil prices age by a well planned public relations campaign touting it as the energy of choice.
While PM Tony Blair, famed scientist Sir James Lovelock and even some environmentalists have jumped on the nuclear power bandwagon, a sober look at the consequences of re-nuclearizing the world needs to be taken.

The first consideration is the high cost of setting up nuclear power plants. With a minimum price tag of $2 billion each, the plants are 50 percent more expensive than coal-fired power plants up and far more expensive than new gas-fired power plants. The cost of doubling nuclear power's current 20 percent share of US electricity generation could well exceed half a trillion dollars.
With the country facing record consumer and government debt, the idea of nuclear power generation is well nigh unaffordable.

Secondly, the safe transport, disposal or storage of nuclear waste is still an unsolved matter for our scientists. A vault that cost the government $8 billion and 20 years to build is supposed to be an airtight, underground burial tomb dug deep to hold radioactive materials. It's supposed to be leak free for 10,000 years but the Environmental Protection Agency already suspects that the storage facility will leak.

Thirdly, an International Atomic Energy Agency study shows that uranium resources could fail to meet demand as early as 2026. Discovery of new deposits or technological breakthroughs that reduce uranium requirements are possibilities but as of now they are speculative.

Fourthly, nuclear power plants are the ultimate soft target for terrorist attacks. On the one hand, the US is worried that Iran might use enriched uranium from its nuclear power plants for a bomb. On the other hand it is advocating nuclear power all over the world. This would mean uranium and spent nuclear waste in transit everywhere and piling up in makeshift facilities, often close to populated urban areas.

In 2005, the Australian government foiled a terrorist attack on its single nuclear power plant. The U.S. Nuclear Regulatory Commission found that more than half of the nuclear power plants in this country failed to prevent a simulated attack on their facilities!

Finally, nuclear power seems old fashioned and obsolete in today's age when distributed technologies are undermining hierarchies, decentralizing power and giving rise to networks and open-source economic models. These technologies are also giving people the chance to become active participants while nuclear power will be controlled by a few.

An aggressive effort to bring the full range of decentralized renewable technologies online: solar, wind, geothermal, hydro and biomass needs to be brought online. Hydrogen storage infrastructure is required to ensure a steady supply for electricity and transportation.

The future lies with the sun and not with uranium.

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The US government's independent inspector on Iraqi reconstruction reported that Iraq's largest industry, the oil sector, has lost $US16 billion in oil export revenue over a 2 year period and insurgent attacks on the country's energy infrastructure have prevented it, in part, from maintaining adequate electricity supplies.

"A number of factors, including attacks, aging and poorly maintained infrastructure and criminal activity are adversely affecting Iraq's ability to develop a viable energy sector," said Inspector General for Iraq Reconstruction Stuart Bowen.

In an unclassified summary Bowen said that these factors are working together to hold down Iraq's oil exports and the availability of electricity.

The oil sector in Iraq which was expected to be a big revenue raiser for the rebuilding of Iraq, has been subjected to repeated attacks on its pipelines and oil export facilities.
Iraq is paying billions of dollars to import gasoline and other refined petroleum products for its people, in spite of owning huge oil holdings.

The US has invested about $320 million to help Iraq improve its capability to protect its oil and electricity infrastructure.
Bowen noted that in addition to the initiatives Iraqi leaders are taking to enhance security and performance of the oil and electricity infrastructure, they also need to take "bold action" to protect energy sites in the country.

Iraq's oil production is far below pre-war levels when Iraq pumped between 2.8 million and 3 million bpd. Currently the country's oil exports have been running at almost 1.7 barrels a day.

Iraq needs investments by foreign energy companies in its underdeveloped and undiscovered fields to boost its oil production.
Iraq claims to need up to US$20 billion in investment to reach oil production limits of 6 million bpd.

However, many foreign companies are apprehensive about doing business in Iraq due to the ongoing violence.

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A deal between Iran and Sinopec for developing a major Iranian oilfield will be finalized in the next 2 months, Iran's deputy oil minister stated.

Deputy Oil Minister Mohammad Hadi Nejad Hosseinian was quoted as saying "The talks will be finalized in less than two months and the contract will come into effect two months later."

Sinopec agreed in October 2004 to take the lead in developing the Yadavaran field and to buy 10 million tons of LNG a year for 25 years.
But the finalization of the deal, in the manner of other Iranian energy contracts with foreign firms had been subject to protracted negotiations and delays. Disagreements over pricing for the deal were behind a previous delay.

The Yadavaran oilfield is estimated to have 3 billion barrels and is expected to produce 300,000 bpd, around the same amount of crude that China currently imports from Iran.
The deal worth as much as US$100 billion if signed could draw fire from the US.

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With oil falling toward $61 on robust US inventories ahead of the winter heating season, OPEC said that the price slide from summer peaks had gone as far as it should go.

US crude fell to US$61.01 per barrel, reversing the rebound from 6-month lows below US$60.
Easing Middle East tensions, ample fuel stocks and slowing US economic growth have resulted in the steepest decline in oil prices since the Gulf War, falling from July's high of US$78.40 a barrel.

OPEC President Edmund Daukoru said that the slide in prices was harmful for investments and that OPEC was already talking among itself about what needs to be done.

Industry analysts feel that if the price slide continues, OPEC might cut its quota.
It is expected that if prices fall below US$60, it would trigger OPEC action.

While OPEC has avoided setting a target oil price to defend, Saudi Oil Minister Ali al-Naimi said that prices were "reasonable" when they were above US$62 a barrel.

On the other hand, BP is adding to the downward pressure on prices by increasing production at its Prudhoe Bay Field. BP expects to hit 400,000 barrels a day by the weekend, just 50,000bpd below full capacity.US stocks stand at their highest level since January 1999. US stocks of distillates are projected to rise.

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Venezuela's state oil company is helping Grenada build storage tanks needed to store the fuel bought under the Petrocaribe deal.  The lack of storage has been a key issue holding up the delivery of oil to the Caribbean.

Under the Petrocaribe deal which was finalized in June 2005, Caribbean countries pay market price for Venezuelan fuel but need pay only part of the cost immediately. The remaining can be paid over 25 years at low interest. The governments can also pay part of the amount with services and goods such as rice and bananas, while Venezuela will provide storage tanks and docking facilities.

The tanks will hold up to 20 days worth of Grenada's fuel needs - more than the current maximum of a 10 day supply.

Grenada's Petrocaribe program has been weighed down because it lacks the infrastructure to receive and distribute oil.

While 14 countries in the region have signed the Petrocaribe deal, itis unclear whether Grenada has received any oil under the agreement.

The Petrocaribe deal is seen as a bid by anti-Us Venezuelan President Chavez to make inroads in the Caribbean, where the US is a major trading partner. His deals are an opposition to the US free trade deals.

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An editorial in the Chronicle last September warned of peaking global oil production in this decade followed by an inevitable decline. If that were to happen, the US needs to invest heavily in developing alternative energy sources or be prepared to endure steep increases in the price of energy.

A study conducted by the US Department of Energy concurred with the editorial's conclusions.

The study, led by Robert Hirsch, affirmed that global spending on developing alternative energy sources should be $1 trillion per year to prevent the economy from being crippled by oil shortages and the resulting chaos. Considering that the study recommends a 20-year lead time, it might already be too late to prevent a crunch.

Hirsch predicts that oil production will certainly peak by 2020, if not in the next 5 years.
In fact, oil production does not need to peak for severe shortfalls in oil supplies to occur. Natural disasters like Hurricane Katrina, wars like the Israel-Hezbollah conflict, political unrest, government intervention, deteriorating equipment like in the case of the Prudhoe Bay field pipeline, accidents or any combination could interrupt the supply of oil.

The trend of dropping oil prices with the end of the vacation season is extremely temporary. ExxonMobil CEO Rex Tillerson predicts that world demand for crude ol will increase by 50 percent in the next 10 years. Demands from countries like India and China and the developing world will only go up.

Perhaps the report's most sobering conclusion is that the free market and private industry alone will not be able to avoid economic catastrophe from energy shortages. A policy for managing the transition from conventional crude oil to other energy forms is required to be set in place by the government.

If oil companies disagree, they need to make good by showing where all the oil to meet excess demand is going to come from, or come up with plans to develop alternative sources.

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According to a report by Greenpeace and the Global Wind Energy Council, Wind has the potential to supply one third of the world’s electricity by 2050.
Ambitious or unrealistic?

Despite 9 years of government support and subsidy, wind farms in the UK, one of the windiest locations in the world, have been erected at a snail’s pace.
Roughly just 1.4 percent of total UK electricity supply comes from wind power. Though the government wants 20 per cent of electricity generation to come from renewable sources by 2020 (most of that capacity provided by wind farms), there are many hurdles.

Primarily, the problem is inadequacy of the electricity infrastructure. The second problem is nimbysism, that is though most people say they approve of wind farms, the average time it takes to get a wind farm through planning is 5 years!

Offshore wind farms were supposed to be the solution. But development has barely begun because of problems with shipping lanes, bird life, radar interference and soaring costs.
Tax breaks in the US and Germany for investors in wind farms have caused a run on turbines, and the soaring cost of steel, required to embed giant turbines 20 meters in the sea bed, make off-shore wind farms look distinctly uncompetitive.

Greater incentives to build offshore can be offset only by higher electricity prices in the long run.
All in all, wind seems good in theory, but plain old blustery in practice.

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The US Environmental Protection Agency has given a $10,000 grant to a team from the New Mexico Institute of Mining and Technology, as part of their People, Prosperity and the Planet competition.

Dr. Warren Ostergren and his student team will use the grant to develop a lower-cost heliostat with the idea of creating an alternative energy system that is less damaging to the environment.

The idea of EPA's P3 competition is to bring together people from varying disciplines like engineering, chemistry, industrial design, politics, economics and architecture to prevent pollution.
In 2008, the teams will be invited to bring their designs to Washington D.C. to compete for a $75,000 grant which will help them implement their projects in the field.

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A day after Venezuelan President Chavez called President Bush "the devil" in a speech to the UN General Assembly, he visited a Harlem church and pledged to double the amount of discounted heating oil his country ships to poor Americans.
Chavez announced that Citgo, the US-based refining arm of Venezuela's state-run oil company, plans to increase the amount of heating oil it is making available under the relief program from 40 million gallons to 100 million.
He said the oil will reach people in 18 states, including American Indians in Alaska.

Chavez started the heating oil program last winter, accusing Bush of neglecting the poor.
He called Bush "an alcoholic and a sick man" to applause from the crowd which included activists and supporters at the Mount Baptist Olive Church.
Chavez said that the American people are friends of Venezuela and he hoped that they would awaken before long and elect a better president. He called Bush's policies in Iraq criminal.

The South American country receives billions of dollars from the US as its top buyer of Venezuelan oil, which fund many of Chavez's popular social programs.
Chavez repeated warnings that if the US government tries to oust him, Venezuela would halt oil sales to the US.

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California Gov. Arnold Schwarzenegger and New York City Mayor Michael Bloomberg said they cannot wait for the Bush administration to take action on climate change and agreed to work together to reduce greenhouse gas emissions.

Gov. Schwarzenegger said that this partnership with Bloomberg and another made with British Prime Minister Tony Blair in July on clean energy technologies will help improve the environment and they did not need the federal government to take the lead.

His partnership with Bloomberg marks the latest environmental push from a Republican governor who has accused President Bush of failing to show leadership on climate change.

Bloomberg, also a Republican, has echoed the Governor's remarks saying "we can't wait for Washington to do something".

The actor turned politician plans to turn a landmark global warming bill into law that makes California the first U.S. state to mandate a cut in greenhouse gas emissions, equal to 25 percent by 2020.

Bloomberg, who was on a 2-day visit to California, to discuss environment and education also announced a five-point program to make New York an "environmentally sustainable city" by taking an inventory of carbon dioxide and other greenhouse gases that will help set targets for lowering emissions.

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The largest gasoline market in the world hasn't seen a new refinery open in 29 years. Though the industry enjoyed record profits last year, it isn't likely to break that streak anytime soon.

Despite dramatically improved profit margins, most refiners still don't believe that the 5 percent a year return on investment is worth plunking down $2 billion to build a new facility.

New refinery construction has been stunted for years by poor economics, changing environmental rules and vociferous community opposition.
The years long struggle to obtain the necessary air and zoning permits is another factor stymieing the building of new facilities. Instead, refiners run their facilities full-tilt and resort to upgrading and expanding them.

Currently, the US has some 149 refineries processing nearly 17 million barrels of crude a day. This is less than the 1981 figure of 325 refineries handling 18.6 million barrels a day. With demands 20 percent higher today, much of the deficit is made up by imports and also with refiners adding capacity to their existing sites.

Connecticut-based Premcor Refining Group plans to spend up to $220 million to boost capacity at its Port Arthur refinery. San Antonio-based Valero Energy Corp. will add 36,500 barrels-per-day of capacity across its refineries, while Marathon Ashland Petroleum is expanding its Detroit refinery by about 26,000 barrels a day.

Good refining years tend to encourage major expansion projects.
Refining margins, the difference between the cost of a barrel of oil and the price of products made from it, hit $16 a barrel during the second quarter of last year and averaged $10.44 for all of 2004. This is a significant increase from the average margin of $6.45 between 1999 and 2003.

Despite the lucrative margins, experts believe that refiners are not expected to expand production capacity at the same rate as in previous years.
This might be because refiners have tackled the easier expansion projects and have been busy making changes to meet new lower-sulfur regulations.
Concerns over a shifting federal regulation known as New Source Review might also have stifled investments.

During the Clinton administration, an interpretation on the law required refiners to make environmental upgrades when performing what the industry deemed routine maintenance.
Under pressure from the industry, the Bush administration has backpedaled on that provision.

Over the next several years though, we can expect new facilities.
Phoenix-based Arizona Clean Fuels plans to build a $2.5 billion, technologically advanced refinery in southwest Arizona. The company hopes to negotiate an oil supply agreement with Mexico's national oil company, Pemex, which would ship crude to the Pacific Coast using an existing pipeline.
The crude would then be loaded aboard tankers and shipped up the West Coast. The investment group would then build a pipeline from the coast to the refinery.

Considering that the Arizona Clean Fuel partners have been trying to obtain the necessary air permits since 1999, many in the industry remain dubious.

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A rare rebellion by government investigators against their own agency, has 4 auditors who monitor leases for oil and gas on federal property say that the Interior Department clamped down on their efforts to recover more than $30 million in fraudulent underpayments of royalties for oil produced in publicly owned waters in the Gulf of Mexico.

Bobby L. Maxwell, who was formerly in charge of Gulf of Mexico auditing, said that these assets belong to the American public and "the agency has lost its sense of mission, which is to protect American taxpayers."

These lawsuits have surfaced as both Democrats and Republicans are questioning the Bush administration's willingness to challenge the oil and gas industry.
Two of the lawsuits claim that two senior auditors with the Minerals Management Service were ordered to drop their claim that Shell Oil had fraudulently shortchanged taxpayers out of $18 million.
Similar suits against Kerr-McGee Corporation and another 2 dozen companies were also suppressed.

Interior officials have denied these accusations, claiming that the auditors simply want a share of any money recovered through their lawsuits.
The department says that the auditors should have followed proper procedure if they believed that fraud was being committed by the companies they were auditing, instead of pursuing private lawsuits under which they could receive up to 30 percent of the monies recovered from the companies.

The auditors have sued the companies under the False Claims Act, that allows individuals to expose fraud against the government. A losing company is required to pay triple the amount of recovered money as well as back interest. In the cases brought by the auditors, this amounts to more than $120 million. People who successfully recover money for the government in such cases are entitled to a share.

While Shell said it had not seen the suits and could not comment, a spokesman from Kerr-McGee said that the case is without merit and the company is fighting it.

The lawsuits come at a time when the Interior Department is already under fire from Congress, accused of covering up ethical lapses and managerial incompetence.

Senator Ron Wyden, Democrat of Oregon, who has been investigating the accusations said, “If it was one isolated instance, you could say that’s somebody who had a bad experience and was frustrated,” Mr. Wyden said.

“But when you have three or four professional, nonpolitical, independent auditors all bringing the same message, that is too important to ignore.”

The Interior Department under President Bush has focused on increasing oil and gas production in the US. Lawyers who have specialized in lawsuits under the False Claims Act said they had never seen a group of government investigators use the law against their own agency and considering that it is 4 and not an isolated one, it forms a pattern of practice.

The agency’s own statistics indicate that revenue from auditing and enforcement plunged after President Bush took office.

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Expectations of rising fuel stockpiles and long drawn out negotiations with Iran caused crude oil to trade near a 6 month low of $61.66 a barrel in New York.

A statement by President Bush that he will give European diplomacy a chance to resolve the dispute with Iran and reports that

US fuel stockpiles have extended their gains from the past month caused the biggest oil price fall in 4 months.

Crude oil fell by $2.14 to $61.66 a barrel, the lowest close since March 21 and the biggest one-day decline since May 15. In after-hours electronic trading on the Nymex, crude oil for October delivery went up by 13 cents.

Hedge funds may also be selling futures after seeing others lose money in the energy market and as the pace of the decline in oil has accelerated, analysts and traders said.

Gasoline for October delivery was at $1.5090 a gallon in after-hours trading, after falling 4.8 percent to $1.5038 yesterday, the lowest close since Feb. 22.
October heating oil was at $1.6980 a gallon, after falling 2 percent to $1.6916 yesterday, the lowest close since March 10.

The UN-Iran dispute looks like it will be a long drawn out affair.
The US seems to have moved over to the European position with French President Chirac proposing the suspension of plans for sanctions if Iran also suspends its enrichment during negotiations.
Bush said that the US would "come to the table" once Iran suspended enrichment and that there was "no objection" to Iran pursuing a truly peaceful nuclear program.

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If Iran worries about sanctions at all, it should be concerned over those that the US is drawing up and not those than the UN is still deliberating over.

There have been hints that the US may enforce its current sanction laws against foreign companies dealing with Iran and the Congress may further tighten the noose.

Now that the EU has dropped its insistence that Iran stop the controversial nuclear work before talks, US and Eu are not on the same negotiating page. The permanent members of the UN Security Council are expected to meet to thrash out methods to put pressure on Iran but hopes for a resolution aren't high.
Maybe some coherent sanctions will come out of the contrary opinions, most likely the travel bans on the political elite, but it will be seen as the empty diplomatic gesture it is with hardly any actual effect.

US efforts on the other hand are looking tougher. Henry Paulson, the Treasury Secretary called for help in choking off funds to Iranian companies that the US suspects of trading in weapons or nuclear components.
He said that there are reports suggesting that more than 30 front companies are part of a suspected network and have duped Western banks into helping them.

For ten years the US has enforced the Iran-Libya Sanctions Act, which bars non-US oil and gas companies from investing more than $20 million a year in Iran. US companies are banned separately from any dealing with Iran by presidential directive.
With Libya's decision to give up its nuclear program, the Act has been redrafted to excise the part about Libya and will expire on September 29. But a new version, dealing with just Iran is sure to be passed.
There are signs that the US may enforce this version more aggressively, and interpret its provisions more widely than in the past. Under the US’s separate Iran Non-Proliferation Act 2000, there has been much action targeting companies from Russia, North Korea, India and Cuba for allegedly supplying banned equipment.

While some energy companies have been deterred by ILSA from investing in Iran, many have flouted it. But if the US takes a tougher approach, with the Congress producing a much more stringent piece of legislation then these companies will have to be more wary.

A much tougher sanctions package on energy companies investing in Iran, The Iran Freedom Support Act, was passed by the House of Representatives early this year. The White House objected on the grounds that the Bill could harm diplomatic relations.
The Bill languishes so far with the Senate not having passed this version. But the bitter elections could revive it, as well as collapse in diplomatic efforts or the furor created in Iran by the Pope's supposed slur on Islam.

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BP PLC and Shell Oil Co. are among 10 companies that the government is in negotiations with to rework improperly prepared oil and gas leases that didn't include clauses requiring royalty payments for oil selling above $36 a barrel.

Head of Interior's Minerals Management Service, R.M Burton said that BP and Shell "are thinking about it."
Both the companies seem willing to make changes in the leases.

Besides these 2 companies, the Interior department has spoken with 20 of the 55 energy companies that have interest in the leases and has developed "proposed terms".

The leases were made at a time when the price of oil was between $10 to $20 a barrel and the idea was to encourage companied to drill in deep water by waiving the usual 12 percent royalty as long as prices remained low.
But some companies aren't paying royalties since the clause was omitted in their lease agreements.

The government says it is near agreement with the two giants to recover some of neary $10 billion in lost royalty.
Republicans and Democrats shared their outrage over the loss of billions of dollars in lost royalty over what Interior officials have called a "mistake" in lease agreements.
The House Government Reform Committee is not satisfied with the department's explanations.

Burton said that she wants to know if the error was intentional or not. While Republican Darrell Issa said that the error shows the "culture of irresponsibility, unaccountability that pervades the entire department", some Democrats called for criminal investigations saying there was an obvious element of fraud.

Rep. Edward Markey stated “We will have a solution to the Middle East before you have an agreement from Shell and BP for a $36-a-barrel threshold."

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Notwithstanding the $10 drop in the price of oil over the last few weeks, the government predicts that crude will still average near $70 for the rest of 2006.

The Energy Information Administration said it expects gasoline prices to average $2.55 a gallon by January before rising again next spring.

EIA's bullish price view is based on rising demand with only a limited increase in supply.
The agency expects worldwide petroleum consumption to grow by about 1.7 million barrels a day in 2007 as opposed to the 84 million barrels a day used in 2005.
EIA reduced its estimate of oil consumption by 100,000 barrels a day due to high prices.

Production capacity is expected to increase only slightly during the forecast period, existing and potential supply problems throughout the world will shape the tight supply-demand balance resulting in little relief from current pricing patterns.

Following the EIA's report oil prices briefly turned higher but later gave gains back with US light crude for October delivery trading down 51 cents on the Nymex.
It also provided a little boost to the shares of oil majors like ConocoPhillips, ExxonMobil and Chevron.

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Flawed drilling leases issued in 1998-99 are allowing oil companies to avoid federal royalty payments and the companies are now facing pressure to resolve them.

A mistake made 8 years ago omitted a provision in more than 1000 drilling leases that would have required royalty payments if the price of oil went above $36 a barrel.
Congress had set the $36 mark at that time to allow royalty breaks to spur deep-water exploration.

With the current prices being almost double the trgigger level, most of the leases would have been subject to royalty payments if the provision had not been forgotten.

Chevron Corp, which has recently announced the discovery of new oil in the Gulf of Mexico acknowledged that 2 of the 8 leases involved in the discovery were among those issued without the royalty threshold.

The new discovery made by Chevron and its partners, Statoil ASA of Norway and Devon Energy Corp is believed to contain as much as 15 billion barrels of oil.
Chevron said that the "majority of the discovered resource" including the test well is from leases subject to federal royalty payments but oil found in 2 other lease blocks could be exempt.

The company claimed that those 2 lease areas had not been drilled yet and any conjecture about royalties for those blocks is an academic exercise.
Executives from the company have also assured the Congress that they are ready to discuss reworking the royalty issue in the leases to reach a mutually satisfactory resolution.

BP PLC and Shell oil Co. have also agreed to make changes in the leases held by them. But the companies have argued that the leases are contractual agreements and care should be taken while tampering with them.

Congress is applying pressur eon the companies to reach a compromise with a provision being added in an Interior spending bill that would prohibit any company that refused to rework the leases from bidding on new oil leases. The spending bill has not received final approval.

The Government Reform Subcommittee is set to hold another hearing into the royalty relief controversy hoping to ferret out how the mistake was made in the 1990's and why it was not quickly corrected.
The mistake could cost the government $10 billion in lost royalties, even if the new Chevron discovery is not taken into account.

But getting to the bottom of the blunder "is especialy important in light of Chevron's recently announced new discovery."

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China is getting incentive to become a global player in the nuclear power industry from Pakistan's growing nuclear energy needs and the country's determination to look to China for investment and knowledge in the field.

Though China is still in the process of seeking foreign aid to expand its nuclear sector, government officials have made it clear that an internationally competitive nuclear power industry is the ultimate goal.

During meetings in Pakistan last month, President Pervez Musharraf of Pakistan sought more Chinese input requesting new plants to help boost Pakistan's nuclear power capacity.
China has already completed a 300 megawatt nuclear power plant in Pakistan using its domestically built reactors and has started construction on another plant there.

Beijing aims to sign an agreement with Pakistan to help build 6 nuclear power plants with an installed capacity of 300MW each. Pakistan aims to have 8000MW of nuclear power capacity by 2025.

Pakistan had pledged cooperation in the global fight against terrorism and invited the US to set up nuclear power plants in the country but Washington has chosen to deal with Pakistan's arch-rival India instead.

Relations between Pakistan and the US suffered when it was revealed that the forerunner of Pakistan's nuclear weapon's program, Abdul Qadeer Khan, had helped Iran, Libya and North Korea develop their nuclear programs. He has been under house arrest since then.

This episode resulted in the US advising Pakistan to look to Iran for its energy needs. At the same time, the Us has discouraged India from sourcing Iranian gas.

The nuclear deal with India has been tailored to suit the civilian industry but could still allow India to boost its nuclear warheads using US nuclear fuel and technology. It has been passed by the US House of Representatives but still needs the Senates sanction.

China is eagerly stepping in to the breach in Pakistan, hoping to generate markets for its own burgeoning nuclear power industry.
China has revealed ambitious plans to have 4 percent of its electricity needs met by nuclear power by 2020. This would mean that China needs at least 2 reactors annually, each with a capacity of 1,000MW.

China's State Council approved a plan for the country's long-term nuclear devlopment which highlights the nuclear solution as a clean energy option and as the most practical choice for reducing dependence on Middle Eastern oil and heavily polluting coal-fired plants.

Initially, the prospect of a huge rollout of new plants had delighted foreign investors anticipating bolstered demand for their technology considering that only three of China's nuclear reactors were domestically designed and built. But the Chinese goverment has been repeartedly delaying the announcement of the bidding result for four new nuclear reactors causing foreign companies' hopes to dim.

Chen Hua, a senior official of the China National Nuclear Corp, the country's major nuclear conglomerate, argued that the purpose of foreign cooperation is to help China develop its technology so that its nuclear power industry is self sufficient and competitive. He said that in the present tendering process, only 2 reactors should be awarded to foreign companies and two should be reserved for domestic companies.

The CNNC has begun to portray the the planned increase of nuclear power generation as an oportunity for China's domestic industry to test and improve its indigenous second-generation-plus reactors. The CNNC officials claim that this would help China eventually export its home-grown technology making it a global player.

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The two largest oil consuming countries in this region, the United States and Brazil, have markedly different approaches to dealing with their addiction to oil.

While Brazil is seeking to increase its production, use and exports of alternative fuel such as sugar-based ethanol and is seeking alternatives to its dependence on Bolivia's natural gas market, the US is debating whether to open its natural reserves in Alaska for more oil exploration and is inhibiting ethanol imports from Brazil.

The main reason for the difference in approach is the size of the markets involved - Brazil's consumption is a tenth of that of the US.
The market volatilty and global nature of the oil business make it essential for pundits to look for ways to break the addiction to oil. Brazil has come up as a good example of ingenuity and resourcefulness.

Nearly all Brazilian cars have flex-fuel engines running on both gasoline and ethanol, and the country has cut its gasoline consumption by almost half in the past 4 years.
While this is significant, it is barely 3 percent of US gasoline consumption. So without any quick fixes for larger economies, analysts say that the region is likely to experience instability in the years to come and that political relationships will play a key role.

For instance, Venezuela which provides the US with 1.2 to 1.4 million barrels a day, has threatened to cut off supply and send more oil to China over the medium term.
The issue is deeper than supply. Venezuela is using oil to buy influence and has created an alternate trade bloc that operates outside of US influence. Chavez has begun to reassert state control over the private oil sector in Venezuela.

Other countries are following Venezuela's lead with Bolivia moving to nationalize its natural gas sector and Ecuador seeking to get control of private oil fields.

Norway has a progressive oil policy that shifts its windfalls into a tightly controlled fund that serves as a buffer when prices dive. This is in marked opposition to Venezuela which is spending all its profits on various presidential schemes and programs.

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Iraq is planning to gird up its military presence in the oil-rich north of the country, where insurgents and saboteurs have targeted workers, pipelines and faclities.

Iraq's northern fields had produced an estimated 8.5 million barrels of crude in July, but repeated attacks on workers and infrastructure have made it difficult for the country to lift the production back to pre-war levels of about 2.5 million to 3 million barrels a day.

A recent attack on oil workers killed four and injured another.

There is already a miltary presence in the area which will now be supplemented in an effort to protect and use the pipelines that have been down for some months now.
Iraqi authorities have also launched a campaign against smugglers who steal from gas stations and peddle the fuel on the black market.

Al-Shahristani said that the country aims to increase production to about 4 million barrels a day but conceded that it would require $20 billion investment in infrastructure to achieve that and added that "soft" loans could be a solution so that Iraq's budget isn't stretched.

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Sir Richard Branson has joined hands with venture capitalists Vinod Khosla and Ron Burkle and invested more than $60 million in Cilion, a company that will make bio-ethanol from corn in an effort to satisfy California's need for environmentally friendly fuels. California already uses bioethanol to fuel cars, but most of it is imported from the American Midwest.

Gov. Schwarznegger issued a directive, earlier this year, calling for the state to make 20 percent of the fuel itself by 2010.

Cilion, a joint venture between Western Milling and Khosla Ventures, plans to build enough refining capacity to meet the target itself.
Cilion plans to start work on the first of seven bioethanol plants within a few weeks. It will bring corn from the Midwest and process it with technology that makes it competitive with petrol at oil prices as low as $40 a barrel.

Branson's Virgin empire plans to move into environmental businesses of which this project is a starting move.
Virgin Fuels, a subsidiary will alone invest $400 million in several biofuel schemes. The company is also working with the government on a plan to make it economical for train companies to use biodiesel.
Besides this Branson is said to be considering big investments in other technologies including wind power, hydro-electric and even nuclear stations. The company is open to investing in any kind of alternative-energy.

Branson who attended the recent environmental summit in California said that he feels that global warming is the biggest crisis facing mankind and that every company chairman should be thinking about devoting a percentage of his earnings to it.

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The former head of pipeline-corrosion monitoring for BP in Alaska pleaded the Fifth amendment and refused to testify as lawmakers questioned company officials over the cause of the massive oil spill in March this year.

Lawmakers said that the company's lapses were particularly unacceptable given the record profits in the industry and the relatively inexpensive measures that might have prevented the oil spill.
BP exceutive apologized and promised to fix operational lapses.

With Congress aiming to wrap up its session by the end of the month, the hearing was not expected to result in any specific legislative action. It afforded lawmakers an opportunity to talk tough ahead of November elections.

Robert A. Malone, head of BP PLC's US operations said that they had falled short of the standadrds they held for themselves and vowed to manage Prudhoe Bay in "a safe, efficient and environmentally sensitive way", while conceding that the company's reputation had suffered.

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With Chevron tapping a petroleum pool that could hold as much as 15 billion barrels of oil, prospects for companies far beneath the deep waters of the Gulf of Mexico are looking up.

It could be the biggest domestic oil find in over three dacades with prospects of more oil than Prudhoe Bay field, but production is years away and won't be able to reverse the nation's growing reliance on imports or have an effect on the gas prices.

The successful test drill by a group led by Chevron could lead to as much as 750,000 barrels of new daily US crude oil production within 6 years.

Though it's equal to only about 15 percent of what the US has been producing per day, it confirms a new frontier in the untradeep water. The announcement of a test well with a sustained flow of more than 6,000 barrels a day is a good news to western companies at a time when its is harder and more expensive to gain access to countries like Venezuela and Russia and with supplies at risk in the Middle East and Africa due to political unrest.
The first drop of oil from the field is not expected to hit the market till 2012.
The proximity of the Gulf of Mexico to the US makes the new discovery more attractive to the industry and it could have a reaction on other states to relax the limits they have set on drillling for environmental or tourism reasons.

US reserves are far less when compared to Saudi Arabia's - 29 billion barrels to Saudi's 250 billion.

While some observers are cautioning over inferring too much too soon, others feel that this discovery is a portent of the possibilities off Africa and Brazil.

The dearth of rigs capable of deep sea drilling and the long lead times required to drill and complete deepwater wells are some of the limitations forseen about developing the potential of the new discovery.

Analysts say that if oil prices remain high, costly deepwater exploration which is economically recoverable with oil prices as low as $40 a barrel will expand. The present prices of near $70 a barrel make exploration viable.
As oil consultant Peter Beutel put it, "You can drill a lot of dry holes and get one to pay."

It's important to find bigger fields since the cost of looking for oil in deep water far from shore run high. It's unclear whether Chevron and its partners will build a floating platform and put oil directly into tankers or use it to connect pipelines running to the shore.

It's an expensive undertaking but a significant move in the opening up of a whole new exploration horizon.

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US Secretary of State Christopher Hill, is set to visit Beijing to discuss reviving stalled negotiations on North Korea's nuclear program and has accused Pyongyang of boycotting mulitlateral talks on its nuclear ambitions.

Reports of a simulataneous visit of North Korean leader Kim Jong-il to China are uncertain.
An anonymous official said that China has decided to invite Mr. Kim amid speculation that North Korea may be planning an underground nuclear test. An armored train known to be used by Mr. Kim for long travels has been spied at the border with China prompting speculation about his visit to China.
Mr. Hill said he had "no information on Kim Jong-il's travels."

Tensions have been high since early July when North Korea conducted missile tests. They are not yet thought to have tested a nuclear bomb though have admitted to nuclear capabilities.

Christopher Hill and his Japanese counterpart have agreed to work with the other partners to revive talks with North Korea, advocating concrete action to persuade Pyongyang to abandon its nuclear program amid talks of North Korea planning more tests.

Mr. Hill maintained that the Us position has not changed. The September 2005 agreement which promised economic aid in exchange for Pyongyand scrapping its nuclear program is still on the floor. The agreement fell apart over disagreements on how to implement it.

International concerns were raised when North Korea launched 7 missiles in July, including a long-range weapon capable of hitting parts of the US.

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ExxonMobil has been asked to pay up $92.2 million as environmental damages from the 1989 Exxon valdez disaster.

The Alaska Department of Law and the U.S. Department of Justice made the demand not covered in the previous $900 million settlement with Exxon.

The settlement made in 1991 allowed the state and federal government to seek additional damages not foreseen at the time of the settlement.

Alaska and federal officials said in May they would seek additional damages and had until Friday to make their demand of Exxon's successor company, ExxonMobil.

Exxon Mobil is expected to contest the demand since it has said that there are no lingering environmental damages not covered in the 1991 settlement.

If Exxon Mobil does fight the additional damages, the U.S. District Court for Alaska will hear the case.

The Exxon Valdez supertanker grounded on a reef in 1989, spilling about 11 million gallons of crude oil that reached over 1,200 coastline miles making it one ofr the worst environmental disasters in U.S. history.

In addition to the 1991 settlement, Exxon and its successor Exxon Mobil have paid more than $2 billion in cleanup costs, as well as $300 million in claims to affected fishermen.

But it continues to contest a punitive damages verdict of $5 billion issued by a U.S. District Court jury in 1994 in the class-action case brought by fishermen, Alaska Natives and others.

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The U.S. Environmental Protection Agency (EPA) has cut a deal with 3 Phases Energy Services to purchase more than 100 million kilowatt hours (kWh) in renewable energy certificates, making it the first federal agency to purchase renewable energy equivalent to 100 percent of its annual electricity needs.

This green power purchase brings the total to nearly 300 million kwh per year which is equivalent to 100 percent of the EPA's nationwide electricity need annually. This maount can power 27,970 homes for a year.

The arrangement effective from Sept. 1 extends yearly green power purchases to more than 190 EPA facilities nationwide and supports the development of wind farms.

EPA Administrator Stephen L. Johnson said that with this move they are committing to alternative, renewable power sources, and meeting the president's call to green our nation's energy.

In 1999, EPA's Region 9 laboratory, in Richmond, Calif., became the first federal facility to purchase green power equal to its total annual electricity consumption. This was the beginning of the green power purchasing program. Since then, the program has steadily expanded to reduce demand for conventional electricity sources by supporting such renewable energy sources as wind power, geothermal sources, and biomass - primarily through the purchase of renewable energy certificates, or RECs which help reduce emissions associated with conventional electricity sources.

On an annual basis, the EPA's total green power purchases manage to offset more than 600 million pounds of carbon dioxide - nearly the amount 54,000 cars emit during a year.

The EPA is an active partner in the agency's own Green Power Partnership, a voluntary public-private program that promotes renewable energy.

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The US has carried out its 23rd subcritical nuclear experiment since 1997 successfully at an underground test site in Nevada.

It was the tenth test under the Bush administration, despite persistent criticism by anti-nuclear groups and amid intensifying efforts to curb the nuclear programs of Iran and North Korea.

The US government denies that the tests violate the Comprehensive Test Ban Treaty on nuclear weapons saying that these tests do not involve a nuclear chain reaction and are designed to "examine the behaviour of plutonium as it is strongly shocked by forces produced by chemical high explosives".

The government denied allegations that it was carrying out tests to boost its efforts to develop new nuclear arms and that they are fully consistent with the nuclear test moratorium it has maintained since 1992.

The administration said the tests were conducted to gather "scientific data that provides crucial information to maintain the safety and reliability of the nation's nuclear weapons without having to conduct underground nuclear tests."

The government stance is that the tests are essential to ensure the safety of nuclear stockpiles.

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As US demand for energy is consistently increasing, there is a strong possibility of the government seriously stepping up its reliance on nuclear power.

20 percent of US electricity supply comes from nuclear power. The last nuclear power opened in the US ten years ago.

Dale Klein, chairman of the Nuclear Regulatory Commission, said that several things make nuclear power an attractive option, primarily that it does not emit carbon dioxide which contributes to global warming and the unpredictability of fossil fuel costs.

He said the Nuclear Regulatory Commission has received applications for 27 new nuclear power plants in the US and some of them were "very, very strong" expressions of interest.
To adjust with the increasing number of applications, the agency has created a new office of new reactor operations so that the individuals that are monitoring the existing fleet are not distracted.

Past history including the Chernobyl and Three Mile Island nuclear plant disasters have underscored public concerns over the safety of a nuclear plant.

Klein said he is confident that existing and new nuclear energy plants in the US are and will be safe and secure.

France, Japan, Russia and Germany have significant nuclear energy generating programs.

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US Senator Richard Lugar challenged America's automakers and citizens to decrease dependency on foreign oil at a Summit on Energy Security.

The day long summit held at the West Lafayette campus focused on foreign oil dependence and alternative fuels. Besides Lugar, Gov. Mitch Daniels and Purdue President Martin Jischke also spoke to a 1000 strong audience. Panel discussions included representative from BP Inc and Ford Motors.

Lugar proposed a series of measures to contain problems including mandates for more flexible-fuel vehicles, boosted ethanol production and usage, and the implementation of stricter vehicle mileage standards and convincing the federal government to enhance alternative fuel production through a progressive loan program.

He said that failure on the part of the nation to bring about a change in the energy policy despite repeated warnings would be more unconscionable given that success would not only contribute towards a better geopolitical climate but also provide restorative economic benefits to farmers, automakers and others.

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Citing lawyers and traders close to the case, The Wall Street Journal claimed that federal investigators are examining whether BP PLC manipulated crude oil and unleaded gasoline markets.

BP is already facing a civil complaint filed by federal commodities regulators for allegedly manipulating much of the US propane market. Besides this, BP has been summoned before the Congress over the corrosion problems at its Alaska pipelines.

The separate investigations on crude oil and gasoline will intensify pressure on BP as their markets are bigger and directly affect most American households.

The Federal investigation indicates a rise in regulatory scrutiny of BP.

The oil company was not available for comment.

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A semiannual survey of 195 economists conducted by the National Association for Business Economics said that the US economy would go into recession only if oil prices hit $100 a barrel but predicted that oil would not ultimately move that high.

The median forecast for next summer's oil price is similar to the present rate at about $75 a barrel. Terrorism continued to be the paramount short-term problem facing the US economy according to 34 percent of the respondents with energy and inflation following owing to the small prospects of other technologies substituting oil in the next decade.

Only 35 percent of respondents believed that the war in the Middle East would spread and most agreed that violence in that region would not result in major disruptions in oil supply to the US.

Earlier this month, Federal Reserve policy-makers decided to keep the interest rates unchanged at 5.25 percent after more than 2 years of a successive rate increases intended to curb inflation.

The percentage of respondents who expect the Fed will tighten further has dropped from 89 percent to 57 percent.
And while the majority of respondents at 71 percent say the current monetary policy is about right, the panel is spilt on where it should go with 29 percent wanting further rate hikes, 17 percent wanting cuts and 53 percent opting to leave rates at the current level.

The survey was taken in the first fortnight of August.

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ExxonMobil CEO, Rex Tillerson, urged the government to "provide timely access to resources" for energy exploration to boost supplies and meet the rising world demand.

With crude oil prices having more than doubled over the past 3 years owing to surging demand for petroleum-based fuels, Tillerson feels that the government should enable energy companies to exploit the full extent of their technology and know-how to bear to new supply opportunities.

"Most energy technologies are developed with specific resources in mind. If these resources are made off-limits, the incentive for R&D is reduced."
Some international oil producers can lay claim to more expertise than state-owned entities that control some of the world's largest oilfields. This expertise is sorely needed to fully develop aging or difficult-to-reach reserves.

Tillerson said that developing nations spending a higher proportion of their GDP on energy are making themselves vulnerable and that current crude prices are harmful to world econominies.

At the press conference, Tillerson also said that he hopes the company's differences with Venezuela over oil contracts can be resolved with negotiations; He was unable to provide the financial impact of a slowdown in production due to the Prudhoe Bay Field shutdown; He would like to expand ExxonMobil's oil business in Russia and that while rivals are shutting wells in Nigeria, ExxonMobil would like to increase production there.

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An ambitious effort to expand the use of solar power in California's homes was signed into law by Gov. Arnold Schwarzenegger.

As part of the administration's green energy initiative, the "Million Solar Roofs" bill is an aggressive effort to create incentives for homeowners to buy, and builders to offer, solar powered energy.

The bill requires that by 2011 all home builders must make solar panels a standard option on any project of 50 units or more.

Due to the difficulty in obtaining solar cells and the fact that new home buyers might choose granite countertops over energy efficiency, the bill could be difficult to implement.
Les Nelson, executive director of the California Solar Energy Industries Association feels that the bill should have made a solar power energy system a standard option for home buyers.

The new policy also challenges two powerful groups: energy companies and the building industry.
Tim Coyle, senior VP of the California Building Industry Association said that while his organization supported the bill, it can't be shoved down consumer's and builders' throats.

A homeowner with a solar power system can produce more energy than required and sell it back to PG&E for a monthly credit, so that the company owes them money. The new law lengthens the amount of time new homeowners can sell energy back to their utility at retail prices.

Current law capped this program at 0.5 percent of a utility's peak demand which has been increased to 2.5 percent of peak demand under the new law so that more new-home buyers can benefit from solar power incentives.

Municipal utilities like Alameda Power & Telecom are directed under the new law to follow PG&E's example and create their own solar rebate program.

Another point in favor of the new law is that it has called for the Energy Commission to study whether solar energy should be required on new residential and non-residential buildings.

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On the eve of a self-imposed deadline for responding to economic and technological incentives offered by Western powers in lieu of their uranium enrichment program, a spokesman from the Iranian Foreign Ministry said that suspension of uranium enrichment is not on the agenda.

The proposed incentives package includes provisons for direct talks between Washington and Tehran and the offer of nuclear technology and the easing of some trade restrictions. Iran said that it would give a multi-faceted response to the incentive package tomorrow.

United Nations may move fast on its threat to impose sanctions against Iran because of the country's inflexibilty. Nothing less than the suspension of the enrichment program is likely to appease the UN.

After its proxy militia in Lebanon, Iran emphasized its stand by conducting military exercises over the weekend including the televised launch of ground-to-ground short range missiles. These were to showcase "Iran's new defensive doctrine."

After the Israeli failure in disarming Iranian-backed Hezbollah, the country clearly feels it has a strong position and has warned that it would be prepared to use oil as a weapon.
Though Iran insists its uranium enrichment program is permitted under the nuclear non-proliferation treaty and is peaceful, western concerns over nuclear Iran have increased after the Lebanon war.

Iran may feel that it can play for time because any further decisions to be taken by the UN would have to be discussed by the Security Council and Russia and China who have veto-holding powers in the Council have been supporters of Iran.

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Plans for a wind farm that could supply half of Cape Cod's electricity to be built off of Buzzards Bay may have to be revised after a report finds that the wind turbines would be illegal under the Ocean Sanctuaries Act and may also threaten the roseate tern, an endangered bird species.

The Ocean Sanctuaries Act prohibits structures from being built on the seabed or under the subsoil and also forbids construction or operation of offshore or floating electric generating stations in the Cape and Islands Ocean Sanctuary. So the developer's plan to build the 120 450-foot tall turbines would be illegal.

Developer Jay M. Cashman who had hoped to see the turbines produce clean energy by 2011 said he's willing to work with state officials to come to an agreement on the wind farm which cannot go ahead without approval from state regulators.

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Lawmakers in India have accused Washington of trying to curb New Delhi's atomic program with the controversial nuclear deal.
Detractors of the deal in India feel that it is attempting to cap the country's nuclear weapons program and also impinging on India's right to pursue atomic reserach for peaceful purposes.

The civilian nuclear cooperation deal gives India access to US atomic fuel and equipment on the agreement of allowing international inspections of its civilian nuclear reactors and segregation of its civilian and military programs.

The opposition came to the fore in a parliament debate just weeks before the US Senate is to vote on it after the House of Representatives passed it with an overwhelming majority.
The deal also needs the backing of the Nuclear Suppliers Group and has to be jointly aproved by the two houses after technical details of the pact have been finalized.

Yashwant Sinha, a lawmaker from the main opposition party said that the deleterious effect of the deal has never been in any doubt as it aims to suppress the country's strategic nuclear weapons program.

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A lawsuit, filed in 2004, that accuses energy companies of reporting false information to publishers of price indices to manipulate the market during the state's energy crisis of 2000-2001, has reached an interesting place with a San Diego court ruling that 27 energy companies must hand over taped conversations of natural gas traders.

Plaintiff attorney Joseph Cotchett hopes that he can use the tapes to show a pattern of manipulation that pushed natural gas prices in California to 10 times the national average.

Transcripts of conversations of the natural gas traders are laden with expletives and call Californians "a bunch of hippies" who deserve high utility bills because stringent enviromental regulations kept the number of power plants in the state low.

The 16 plaintiffs with separate suits are seeking damages that could reach a total of $3 billion.

55 percent of California's power plants are fuelled by natural gas. So, increase in natural gas prices causes an increase in the price of electricity.

The defendants include EnCana, Duke Energy Corp., Reliant Energy Inc, Sempra Energy and Dynegy Inc.

A transcript of a conversation shows a couple of gas traders talking about whether they could get caught manipulating prices.

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Due to the 400,000 barrel a day Prudhoe Bay Field oil loss, Saudi Arabia and Mexico have pledged to supplement any shortage in the US.

The Energy Department stated that BP's oil field shutdown for corrosion maintenance might not be functional until January.

White House spokesman Tony Snow said that no refineries have reported shortages yet and in the event that there are any, the governement is willing to tap into the Strategic Petroleum Reserve and take up Mexico and Saudi Arabia on their offer.

When accused by Democartic Senator Charles Schumer of a lack of oversight, Snow stated that the discovery ofcorrosion was owing to the inspection rules laid down by the Bush administration.

A team of government investigators is assisting BP in assessing the situation.

When asked if Bush was concerned about the impact on prices, Snow said that the root cause needs to be addressed which is this case is to have the pipelines working in a way that is environmentally sound.

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New York Governor, George Pataki, who has been upping his own presidential aspirations for 2008, offered a 10-year energy plan on the same day as the Prudhoe Bay Field pipeline problems.

He called for tax credits to give incentives to auto makers to produce fuel-efficient cars and development of alternative fuels like ethanol from corn through a combination of tax incentives, loan guaantees and legislative changes.

He said oil's perpetual ties to terror, instability and environmental deterioration makes the reduction of petroleum consumption a matter for immediate and priority action.

His speech was briefly interrupted by the Transit Workers Union shouting out that he was to blame for the strike that paralyzed New York's subway and bus system last year.

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