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Backseat Driver: The polar bear is where the rubber meets the road

The fortunes of the polar bear could well become the ultimate symbol of our thirst for oil.

With the Bush administration, which is not known to be pro-environment when oil industry interests are at stake, declaring the polar bear a threatened species, you got to figure it really is threatened.

But Alaska is now suing to challenge the ruling, according to the Associated Press.
Republican Governor Sarah Palin said the studies that predict the loss of sea ice which the bears need to hunt for seals are unreliable.

At issue is the possible loss of “oil and gas development in prime polar bear habitat off the state’s northern and northwestern coasts.”

The Department of the Interior last week declared the polar bear threatened based on three findings, according to Interior Secretary Dirk Kempthorne:
"First, sea ice is vital to polar bear survival. Second, the polar bear’s sea-ice habitat has dramatically melted in recent decades. Third, computer models suggest sea ice is likely to further recede in the future."

So, will sentiment for one of the most significant animals in the world triumph over oil and gas interests in Alaska?

Frankly, it is hard to see how Alaska can overturn the Bush administration in one of its few nods to the problem of global warming.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 4:13 PM to commentary | Permalink | Comments 3

Backseat Driver: Ready for $5 a gallon for regular?

Sounds incredible, doesn’t it? But given the way gas prices are ratcheting up on an almost daily basis, it is not out of the realm of possibility. Not with the way oil prices are going.

For anyone who has worked in the oil patch, as I did with Petroleum Intelligence Weekly and Platt’s Oilgram in New York in the early 1980s followed by a couple of years helping to set up the energy desk at Reuters, the current surge in oil prices is simply incredible.

And the ramifications are enormous.

But let’s start with gas prices. The national average price for a gallon of regular gasoline is now $3.83 a gallon, according to the Associated Press.

Really? Not around here. On my way down to Westerly yesterday, I saw $3.99 a gallon. Add on that 9/10th of a cent the gas companies love to slide in those tiny numbers – forgive me if I repeat myself – and that’s $4.00 a gallon.

Just weeks ago, that number was seen as a possibility sometime this year. Well, we’re at $4.00 a gallon now and I don’t see any end in sight.

Just look at the crude oil market. At the beginning of the week it was flirting with $130 a barrel; this week we’ve hit over $135 a barrel before coming down to about $132 today. What’s going on?

It’s partly the new demand from developing economies such as China and India; and it’s partly speculation by commodity brokers who are always attracted to prices that are going up.

Now the International Energy Agency (IEA) reports that its previous projections of global crude oil supplies may be off by many millions of barrels a day. According to a front page story in today’s Wall Street Journal, both the agency and the U.S. Energy Department are worried about supply not keeping up with demand.

“The oil investments required may be much, much higher than what people assume. This is a dangerous situation,” the paper quotes IEA chief economist Fatih Birol as saying.

The paper cites all sorts of problems in the global oil patch, including the fighting in Iraq and sanctions on Iran hindering investments in both nations, political turmoil in Nigerian and Venezuela and production slumping in a number of areas.

Earlier this month, Birol told the German magazine Internationale Politik: “We see a sharp decline in production from the existing oil fields, especially in the North Sea, the USA and many non-OPEC countries.”

"Exactly 12.5 million barrels a day are still missing, about 15 % of the global oil demand. This gap means that we could face a supply shortage and very high prices during the next (few) years."

Gulp!

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 3:15 PM to Crude oil market | Permalink | Comments 0

Oil surpasses $135 a barrel on new supply concerns

Oil prices rose above $135 a barrel for the first time Thursday, with supply worries, global demand and an ever weakening U.S dollar driving crude futures up, according to the Associated Press.

Also on Thursday, The Wall Street Journal reported that the world's top energy watchdog is preparing a sharp downward revision of its oil-supply forecast.

Posted by Peter C. T. Elsworth  at 10:16 AM to Crude oil market | Permalink | Comments 0

Ford cuts N. American production, cuts profit goal

DETROIT -- Ford Motor Co. no longer expects to return to profitability by 2009 and is cutting North American production of pickups and SUVs for the rest of this year as high gas prices and the weak economy hurt sales, the company announced Thursday, according to the Associated Press.
The Dearborn-based automaker also cut back its projections for total U.S. sales in 2008 to between 15 million and 15.4 million vehicles. That's down from 17 million vehicles as recently as 2005.

Posted by Peter C. T. Elsworth  at 10:15 AM to Ford | Permalink | Comments 0

Video: NASCAR Drivers Ready for 600-mile Race

AP Photo

NASCAR drivers Casey Mears, Jimmie Johnson, Brian Vickers and David Ragan look ahead to Sunday's 600-mile race at Lowe's Motor Speedway in North Carolina. Click here to see the AP Video.

In above photo, Kasey Kahne takes a victory lap after winning the NASCAR Sprint All-Star auto race at the speedway on Saturday.

Posted by Pam Cotter  at 8:08 AM to Racing | Permalink | Comments 0