The Peakist

Reliable energy supplies are set to rival military capability in their contribution to a state’s security, Tony Blair said on Tuesday.

Speaking at the formal opening of a gas pipeline between Norway and the UK, the prime minister noted that demands on the world’s energy resources were increasing, driven by the growth of countries such as China and India, while Britain was moving from near self-sufficiency in oil and gas to heavy dependence on imports. In little more than a decade Britain could be importing 80% of its gas, he said. (more…)

Terry Macalister writing in Monday’s Guardian forsees the Western oil majors under threat and a future of re-nationalisation:

“A former government adviser has warned it is “only a matter of time” before BP or Shell faces a bid from a Russian state-owned group such as Gazprom which could threaten western oil supplies. Professor Peter Odell, an energy economist, says ExxonMobil is also vulnerable to a Chinese takeover as the large UK and American stock-listed oil groups lose their influence in global markets. “A Chinese bid for Exxon and/or Chevron and/or a Russian bid for Shell and/or BP, backed by funds provided by the wealthy member countries of Opec seem likely to be only a matter of time.

“With the ‘majors’ gone there will be concern in the main OECD countries for the future security of supplies,” he said in an unpublished speech to Opec ministers in Vienna last month. Professor Odell, who was an adviser to Tony Benn, the UK energy minister in the late 1970s and has since worked for a host of different foreign governments, said he was not being alarmist or deliberately controversial.

(more…)

Chinese and Russian firms are planning to spend $10bn (£5.4bn) on building power plants in north east China, Beijing media says.

The plants, to be built on the border between the two countries in China’s northeast, will help provide energy needed for China’s economic boom.

The China Daily said that the sites would be fuelled by coal from Siberia.

China’s State Grid Corp and Russia’s Unified Energy systems are behind the project, the report said.

The plant is predicted to generate 60 billion kilowatt hours annually.

China’s shopping centres and factories have been competing for energy supplies with blackouts occurring across the country.

“China’s electricity demand will continue its fast growth in the coming years,” said Bai Jianhua, an analyst at China’s State Power Research Centre.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/6043388.stm

· State withdraws approval for Shell’s Sakhalin project
· Gazprom rumoured to want half of BP venture

Terry Macalister and Michael Mainville in Moscow Tuesday September 19, 2006
The Guardian

Shell and BP were facing legal wrangles and upheaval in Russia last night, raising doubts about the involvement of foreign companies in the country’s oil and gas sector. Government approval for Shell’s $20bn Sakhalin project was withdrawn and state-owned Gazprom was reported to be trying to buy half of the TNK-BP joint venture.

Russia’s Natural Resources ministry said it had revoked the environmental approval for the major Sakhalin-2 scheme in the far east of Russia to “satisfy the arguments of the prosecutor’s office” leaving the future of the scheme in doubt. (more…)

Earlier this month, the Guardian published a piece by Hugo Chavez in which he argued: “If the entire world adopts the energy-consumption patterns and lifestyles of the developed countries, we’re heading for disaster.” Coming from a leader whose ‘Bolivarian’ revolution is bankrolled by petrodollars this strikes me as a significant statement. Events in the Middle East have focussed attention away from the significance of Venezuela to the emergent energy geo-politics. The Chavez regime is more than happy to supply oil to its left wing Latin American allies at subsidised prices, and with no end of high oil prices in sight there is noreason why they won’t continue to do so. Chavez survived a CIA backed coup attempt in 2002 and is in the process of investing in Russian armaments to defend Venezuela against future military intervnetion from the US. As many commentators have pointed out whilst the Bush junta has been caught up in its failed war in Eurasia anti-hegemonic forces have been taking over the US’ backyard. As oil supplies become ever tighter and with the catastrophic loss of Middle Eastern supplies (whether Iranian or Saudi) a very real possibility there can be little doubt that practitioners of real politique in Washington will be looking for control of supplies closer to home. Under the rubric of the ‘war on terror’ US military aid is already committed to defending Columbian oil from left wing guerillas. It is easy to forget that US military presence in the ‘Centcom’ region of the Gulf states and central asaia involves incredibaly costly, long and vulnerable supply lines. Projection of force to control hydrocarbons in the Western hemisphere looks like a good deal by comparison. Whether Chavez can put his environmental rhetoric into action remians to be seen; that, for now, Venezuela is the central obstacle to US hegemony in the Western hemisphere is without doubt.

Drawbridge quarterly magazine

British Gas owner Centrica has said it plans to raise gas bills by as much as 12.4% for its 10.7 million customers.The firm’s 5.8 million electricity customers will also face a 9.4% increase in their bills from September.

British Gas said “unprecedented high wholesale energy costs” had made the price increases necessary.

News of the fresh round of price rises came as British Gas reported record losses of £143m during the first six months of the year. Strangely the conditions that have led to these increases have not affected the investors dividends which have in fact increased!
Earlier this week, rival EDF Energy announced it would be raising gas bills by 19% from next Tuesday, while Scottish Power said two weeks ago that it would also be increasing bills.

The Israeli offensive in Lebanon contributed to pushing oil prices rising above above $78 a barrel for the first time in the last week - just as demand for fuel is increasing with
the start of the U.S. holiday season. The US has given the green light to a massive Israeli offensive in order to hit the one element of what is perceived by the administration
as an emerging ‘Shi’a axis’ that it can without propelling the world into a total oil price meltdown. Having failed massively in its attempt to remodel the region to suit its own
hydrocarbon needs the US has instead unwittingly collapsed the Iraqi state and strengthened the position of Iran. (more…)