World suffering from Libya war

 

Burning Al-Sedr Oil Terminal

I am talking of course about the price of black gold – oil – that is affecting all nations, at the wrong time, when it is still fixing its economy after the 2008 financial crisis.

It has gotten worst with prices reportedly jumping up to over $103 a barrel after a coalition of the U.S., France, U.K. and other nations took military action against Muammar Gaddafi, declaring the skies over Libya a no-fly zone and bombs started falling, hitting tanks and pounding its air defense sites.

“The regime in Tripoli shows no sign of giving up,” Capital Economics said in a report. “The prolonged loss of Libyan oil could push prices all the way up to the highs above $140 seen in 2008.”

Hope not, but then again nobody knows what is in the mind of this despot. He may go down fighting as he promised a long-drawn war against the international forces, and with it his diabolical plan of ‘scorching the earth,’ meaning burning Libya’s oil fields.

Note that even before UN Resolution 1973 was imposed, the uprising already shut down most of Libya’s 1.6 million barrels per day of crude output.

What is being feared now is that this international intervention could extend the conflict and keep Libya’s oil production out of the market longer than expected.

The loss of oil supplies from Libya so far, however, amounts to only about 1 percent of world oil production.

This cannot compare yet with past energy crisis, namely, the 1973-74 Arab oil embargo, the 1978-79 Iranian revolution and the 1990-91 Persian Gulf war which led to losses of 7 percent or more of global oil production.

What we should be more concerned about, especially undeveloped nations like us, is when similar uprisings disrupts the flow of oil in major oil producing countries in North Africa and the Middle East, where 27 percent of oil supply is estimated to come from.

We can only hope that this political, economic and social outbreak happening in the Arab world can be contained the soonest possible time and not wait till the price of oil shoots up to $200 a barrel, God forbids.

China’s economic growth starting to move metal markets

 

China, which is officially considered now as the world’s second largest economy, continue to fuel its economic growth not only by producing most of the commodities the world market need, but its momentum also seem to be fired as well by the growing strength of its metal production.

In order for China to sustain its economic vigor it has to assure itself of a steady supply of oil from Iraq and even from Latin America where it is said that the leading Chinese refinery Sinopec has already acquired a 40 percent stake in the Brazilian branch of Spanish energy company Repsol.

According to Nobuo Tanaka, head of the International Energy Agency, China is now the largest energy consumer by their definition. Seventy percent of China’s energy needs comes from coal and this populous nation is the world’s second largest oil consumer after the U.S.

“There is in China a big supply concern of ensuring what they need — energy and food but also metals,” Philippa Malmgren of the Canonbury Group, said.

Not only will China be producing and supplying their own needs of metals for their various mega-construction projects which are “very metal intensive,” but has also to meet the structural demands of the emerging markets around the world.

“Although China is now the single most important consumer of industrial metals, … the next three places are typically filled by the United States, Japan and Germany,” said John Higgins of Capital Economics.

That being said, there is no doubt that what the world will be seeing next are upheavals in metal prices.

BP succeeds in plugging ruptured oil well

A great relief has been felt by the residents in the coastal areas of the Gulf of Mexico when BP finally succeeded to permanently plug their ruptured oil well.

The apparent success came 106 days after the catastrophic explosion of the BP-leased Deepwater Horizon rig on April 20 that resulted to death of many workers and the unleashing of what is dubbed as the biggest oil spill in history.

The estimated 4.9 million barrel leak was already seriously threatening the fish and wildlife-rich US Gulf coast with environmental ruin and exposed the residents of coastal communities to a bleak, if not uncertain future.

The plugging procedure involved pumping of mud into the busted well for eight hours pushing the leaking crude oil back into its source rock.

Another course of action, if needed still, is to inject cement into the well via the same route.

The “static kill procedure,” as the remedial measure was called, is having the well pressure controlled by the hydrostatic pressure of the drilling mud.

Irony of petroleum products

The world can’t seem to move forward without the black gold – oil – fueling and energizing it.

The irony, however, is that whether oil is in its crudest or refined form and some converted into petrochemical feedstock used in the production of plastics, rubber, fertilizers, cosmetics and the like, if not handled, properly, carefully and safely, it becomes the scourge of nature and menace to mankind and wildlife on planet earth.

In short, it has become one monster of an environmental problem.

Such is the case of the blown oil well in the Gulf of Mexico that is creating an environmental havoc, threatening the livelihoods of people and very well affecting the economy of nearby states.

The oil slick forming on the surface and growing larger by the day because of the still uncapped fractured well is bound to drift towards the bayous and beaches of the Gulf of Mexico making vulnerable to destruction the habitats of fish, shrimps and oysters.

The coastal wetlands of the continental U.S. is not far from being a ‘sitting duck’ to this environmental catastrophe.

As oil continues to take its toll in the Gulf of Mexico, most people everywhere in the world are oblivious of whatever happens to the petroleum-based plastic products they have used one time or another and have discarded it away.

One can just imagine the volume of plastics being thrown away by people all over the world.

One can probably account and appreciates its enormity when one sees what abounds at the garbage dumps.

The harsh reality sometimes come when one is trying to survive in a flash flood and what you see around you are plastics, which could only be a testament to man’s wasteful lifestyle and his careless throwaway culture, as what happened during the 2009 Ondoy flood in the Philippines.

Unknowingly, however, by many is the voluminous plastics found strewn in the oceans polluting the sea and endangering sea animals.

Scientists estimate that 22 species of marine mammals are harmed or killed by plastic waste, either from ingestion, entanglement or strangulation.

One should also start realizing that plastic is not biodegradable.

Japanese workers told beards not allowed at work

This could be going too far, but true.

To save on power, office employees in the northeastern city of Isesaki, Japan were told not to sport facial hair when reporting for work.

This movement is said to have been introduced in 2005 by the Japanese Ministry of Environment in an attempt to curve the country’s power consumption, thereby reducing Japan’s carbon emission.

Part of what Japan calls its “Cool Biz” campaign is also encouraging civil servants to forego wearing of jackets and ties during hot weather to save on energy.

Although some human rights lawyer, like Fumio Haruyama, has criticized the ban, saying it violates personal freedom still the move is being accepted and seems to be the going trend in Japan now.

A growing number of Japanese workers are banned from coming to work unshaven because the public supposedly find it unattractive.

In fact one major convenience store has already made it clear that it will not hire men with beards and would fire staff for growing facial hair.

Dwindling world oil reserves

Researchers from the Smith School of Enterprise and the Environment at Oxford University have issued an alarming statement saying that the world’s capacity to meet projected future oil demand is getting to be at an irreversible stage.

This simply means that the age of cheap oil, as we know it, is reaching a tipping point where demand starts to outstrip supply. In a paper published in the journal Energy Policy, it says that this condition could start happening within this decade as they suggest that the current oil reserves estimates should be downgraded from between 1150-1350 billion barrels to between 850-900 billion barrels.

The question now ahead of us is: How could the onslaught of high fuel demand be mitigated especially from emerging industrialized countries like China, India and Brazil?

Dr. Oliver Inderwildi, Head of the Low Carbon Mobility center at the Smith School, said: ‘The common belief that alternative fuels such as biofuels could mitigate oil supply shortages and eventually replace fossil fuels is pie in the sky. There is not sufficient land to cater for both food and fuel demand. Instead of relying on those silver bullet solutions, we have to make better use of the remaining resources by improving energy efficiency. Alternatives such as a hydrogen economy and electric transportation are not mature and will only play a major role in the medium to long term.”

What is important to remember perhaps is that whatever alternative fuel resources there will be in the future it should be one that continues to be relatively affordable with low carbon content that can meet the demands of a stringent environmental policy.

Unless governments and businesses join hands in swiftly finding solution for an alternative fuel to ensure energy security and/or mitigate oil supply shortages, the world may face an uncertain future far more serious and devastating than the global economic uncertainty nations have experienced during the past two years.

Why create an oil supply shortage when there should not be any?

Or why make the Filipino people suffer unnecessarily?

These questions are being asked after it has been reported that the Bureau of Customs (BOC) has earlier threatened to seize $923 million future imports of Shell covering the period February to May 2010 allegedly as payment for unpaid back taxes incurred by the oil company.

Shell, however, is questioning the BOC’s tax assessment contending that the imports, in the form of Catalytic Cracked Gasoline (CCG) and Light Catalytic Cracked Gasoline (LCCG) are simply raw materials for the production of unleaded gasoline.

This being the case, that both imported products will still go through a refinery yet, it will be unjust for BOC to impose the excise tax on an intermediate product when it should be only levied on finished products for consumption and sale in the domestic market.

Shell legal counsel and former ombudsman Simeon Marcelo said the BOC’s demand constitutes double taxation since Shell already paid billions in taxes for finished products withdrawn from its refinery.

Energy Secretary Angelo Reyes has warned, saying, that “if indeed BOC confiscates the imports of Shell, there will definitely be some disruptions.”

Since the Department of Energy (DOE) and the Bureau of Internal Revenue (BIR) share opinion that Shell did not incur tax deficiencies it is hoped that government will look into this and resolve the issue as early as possible so people will be freed from unnecessary anxiety.

Iraq’s oil reserve could challenge top oil producers

Iraq looks set to shake up the Middle East’s oil hierarchy after the Iraqi Oil Ministry ended its second bidding round last week, awarding seven oilfields in a tender which could eventually increase the war-torn country’s capacity to 11 million barrels per day.

The auction, which centered on oilfields ready for development, saw Russian and Chinese oil firms secure lucrative contracts at the expense of companies from the United States who were largely absent from the tender for deals to tap Iraqi oil reserves, the world’s third-largest.

After suffering from decades of mismanagement, sanctions and war, it is forecasted that Iraq, by the decade’s end, could rival top producers Russia and fellow OPEC member Saudi Arabia.

“They have the oil in the ground,” said James Placke, a senior associate at Cambridge Energy Research Associates who specializes in the Middle East. “It’s getting it out that’s always been the problem.”

Iraq has the third largest proven oil reserve behind Saudi Arabia and Canada, and analysts believe there could be much more, once the country’s western desert is surveyed.

TOYOTA UNVEILS NEW HYBRID SEDAN

Toyota, the world’s largest automaker is pushing hard on the sale of its gasoline-electric hybrids saying it aims to sell 36,000 units a year of its new Sai hybrid sedan in Japan.

The Sai sedan is a repackaged version of the Lexus HS250h and is just the second hybrid model under the Toyota brand after its flagship Prius.

Toyota said it expects to sell 500,000 to 600,000 hybrid vehicles worldwide this year with the goal of selling 1 million hybrids globally soon after 2010.

The Sai sedan has a listed mileage of 23 km/liter (54 mpg), or twice that of a comparable gasoline car, according to chief engineer Shigeru Nakagawa in a news conference.

The new Sai hybrid sedan will be built by unit Toyota Motor Kyushu in southern Japan and will be sold only in Japan.

The name Sai is said to have been derived from a Japanese character meaning talent and coloration.