Venezuela Ends Heating Oil Program to U.S. Poor Due to Budget
For the past three years, Venezuela’s state oil company has provided heating oil to low-income households in the U.S. through it’s subsidiary, Citgo Petroleum. Venezuelan leader, Hugo Chavez, began this program after meeting with the Reverend Jesse Jackson a few years ago. For Chavez, the program was a chance to tweak the U.S. government, with which he is constantly at odds.
However, with the dramatically lower price of oil, Venezuela is no longer able to afford these subsidies and has announced it will be ending the program. And while Chavez relies heavily on payments to the poor in order to maintain his legitimacy, once oil fell below $90 per barrel, Venezuela’s budget became unsustainable. Naturally, foreign subsidies like this program are the first to be cut. Whether he has the money, or not, Chavez cannot afford to allow his massive domestic subsidies to wither– which is a fundamental reason why he has so strongly supported OPEC’s efforts to increase the price of oil.
Interactive Map Highlights Our Dependency on Foreign Oil
Check out this cool interactive map that was created by the Rocky Mountain Institute, as part of a grant from Google.org. The map shows how much oil the U.S. has imported, from where, and how much we have spent every month since 1973.
Google explains:
“By clicking on the green light to play, you can see the countries supplying oil to the U.S. (either in terms of barrels or dollar value) and how our imports have changed over the last 35 years. The thicker the line in the map, the more oil produced or imported.”
Watching this dynamic map just further drives home the point that we need to get off of oil now. And to answer those who chant “DBD,” we would suggest pressing the “ANWR” and “Offshore Drilling” buttons on the lower left side of the map.
Europe Being Dragged Into Russia-Ukraine Natural Gas Dispute
Despite claims this week that Ukraine would permit natural gas intended for the EU from Russia to be delivered, there are reports from Poland and Hungary that deliveries from the pipeline have begun to fall. Poland is reporting a 6% decrease in deliveries and Hungary a 25% decrease.
Russia claims that Ukraine is illegally siphoning off gas intended for these countries, while Ukraine asserts that it is Russia that has decreased the output. Leaders of both nations are currently trying to make their case to EU leaders.
Russian natural gas monopoly, Gazprom says that Ukraine can no longer be trusted and that it will have to find an alternative route to get gas to Europe. Whether this is practicable remains to be seen. Fortunately, the EU nations have substantial natural gas reserves, having experienced a similar situation in 2006, the last time these two neighbors reached an impasse.
Via AFP (link may expire)
Ukraine Aims to Calm Fears of Natural Gas Disruption for EU
As the Russian halt of natural gas deliveries intended for Ukraine entered its second day, Ukrainian officials began touring European capitals to provide reassurances that transport of natural gas through Ukraine to the rest of Europe would continue. Since almost all natural gas delivered from Russia to EU countries must travel through Ukraine, concerns have been raised that Ukraine might divert some of that gas for its own use. This is what happened the last time Russia halted natural gas deliveries to Ukraine in 2006.
However, Ukraine asserts that it has enough natural gas reserves to last it through the winter, and regardless, will continue to permit transit of all Russian natural gas through its country to the EU. READ MORE
Russia Shuts off Natural Gas Deliveries to Ukraine
On Thursday, Russian energy monopoly Gazprom, shut off the entire flow of natural gas to Ukraine for that country’s domestic consumption. Ostensibly, the dispute is over price and transit fee negotiations, however, larger geopolitical and economic issues are surely the underlying causes.
The Kremlin has often used its control of Russian natural resources as a tool for international relations. In 2006, Russia shut down deliveries of natural gas to Ukraine for three days, which many attributed to tensions between the two countries stemming from Ukraine’s Orange Revolution in 2004. And earlier this year, the Czech Republic saw a decrease in oil deliveries from Russia, three days after it signed an antiballistic missile agreement with the U.S.
If the current interruption in Ukrainian deliveries continue, Western Europe will also experience shortages, as they receive their natural gas from Russia on the same pipeline.
Russian Natural Gas Monopoly Gazprom Falls Far
A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world. Buoyed by high oil prices and political backing from the Kremlin, it had already achieved third place judging by market capitalization, behind Exxon Mobil and General Electric.
Today, Gazprom is deep in debt and negotiating a government bailout. Its market cap, the total value of all the company’s shares, has fallen 76 percent since the beginning of the year. Instead of becoming the world’s largest company, it has tumbled to 35th place. And while bailouts are increasingly common, none of Gazprom’s big private sector competitors in the West is looking for one.
America Enters the ‘Trance’ Phase of ‘Shock and Trance’
Tom Friedman presents another in-depth case for a dramatic increase in the national gasoline tax, or an economy-wide carbon tax, in the NY Times on Sunday.
His basic argument is that with falling gas prices, we’re quickly falling back into a sense of trance, which is the second half of America’s standard “shock and trance” cycle that has shaped American energy policy over the past forty years.
Although President-elect Obama has articulated his concern that we avoid this oft-repeated mistake of following petro-panic with petro-complacency, he has been opposed to new gas or carbon taxes. Friedman says that this is a terminal mistake.
Here are the highlights of Friedman’s argument:
Regarding the current situation, he notes:
“Of course, it’s a blessing that people who have been hammered by the economy are getting a break at the pump. But for our long-term health, getting re-addicted to oil and gas guzzlers is one of the dumbest things we could do.” READ MORE
Intel to manufacture advanced batteries for electric vehicles?
We firmly believe that Detroit and America cannot go green without advancements in battery technology. Any electric vehicle network must be built upon advanced battery technologies, and as we’ve noted before, if the current state of laptop and cell phone batteries are any indication, we’ve still got a long way to go.
However, not only do we need advancements in battery technology, we also need to build a domestic battery industry. It is not a great strategy to trade one foreign dependency (oil) for another (batteries). Right now, “virtually all advanced nickel metal hydride (NiMH) and lithium ion (Li-ion) production is done overseas, mainly in China, Japan and Korea.” READ MORE
Could gas hit $1 a gallon? Party like it’s 1972!
With global demand continuing to decline, some energy analysts are predicting the price of oil will bottom around $25 a barrel with $1 a gallon of gas. Oil closed on Monday at $43.71 a barrel, with average gasoline prices at $1.70, the lowest since February 2004.
Oil held steady yesterday on the hopes that the Obama stimulus package could restore demand and that OPEC might bring additional production cuts. READ MORE
60 Minutes looks at Saudi Arabia’s oil mega-industry (Part 2)
60 Minutes looks at Saudi Arabia’s oil mega-industry (Part 1)
60 Minutes had a fascinating look at the Saudi Arabian oil mega-industry Sunday night. This clip is the first half of the program and here is the second.
One of the more interesting facts disclosed was that it costs Saudi Arabia less than $2 to manufacture a barrel of oil. However, the country relies on oil being priced at $55 to finance 75% of the domestic spending budget. Anything above that is apparently a windfall.
Missing the link between climate change and terrorism
Apparently in a recent speech, former President Clinton ranked climate change higher than terrorism on a list of global concerns. This has provoked a somewhat heated critique by some, who either don’t believe climate change is real, or think that terrorism is a greater threat than climate change. To those on the fringe who fall into the former category, we hopelessly direct you here, but to those who reasonably fall into the latter category, we have a suggestion–
It doesn’t matter which is a “greater” threat. Time spent debating this issue is a missed opportunity. This is because climate change and global terrorism have a very real relationship, and if the two issues are framed as such, we will be much more likely to achieve meaningful progress in addressing them both. READ MORE
Access to and control over water will shape the next century
One of the biggest impacts of climate change will be on the global fresh water supply. Across the globe, from the Sierra Nevadas to the Himalayas, snow packs are rapidly dwindling, thereby removing a major source of continuous fresh water for downstream population centers. Around a billion people rely on the dwindling Himalayan watershed alone. READ MORE
Climate change may benefit Russia
The National Intelligence Council released its Global Trends 2025 report on Thursday. In it, the NIC made predictions on a number of global trends, including some of the geopolitical effects of climate change. Of particular note, the report indicated that Russia may actually benefit from climate change. Specifically, the melting arctic could open up new swaths of Northern Russia to mining and drilling in regions such as Siberia. Russia, which has built up an extractionist economy, would see a large boost in revenues from these new resources. However, the report notes, that for Russia to experience a real growth in power, they will have to integrate more fully into the global system.
Tom Friedman on Meet the Press
For whatever reason, MSNBC poorly edited the clip of this segment, thereby missing Friedman’s opening remarks. They were very eloquent and powerful so we’re copying them here: READ MORE
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