Daily Archives: February 19, 2012

Voodoo Environomics

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By H. Leighton Steward
Posted on Feb. 16, 2012

President Obama’s rejection of the Keystone Pipeline wasn’t, as he claimed, based on science or the environment. And it certainly wasn’t based on sound economic policy. The decision was, in fact, the product of Voodoo Environomics: a destructive blend of bad science based on fear-mongering and manipulated research with the bad economics of green job fantasies and “starve the beast” energy politics.

At the very heart of Voodoo Environomics is, of course, the much-hyped theory linking man-made CO2 and climate change. Without the world’s policy focus on CO2 emissions, climate change alarmists would be robbed of the ammunition they need to change and control human behavior via draconian energy policies. They’d also be robbed of the substantial financial support needed to continue their biased research.

When adopted as official government policy, Voodoo Environomics can wreak havoc on the economy and represents a double whammy for working Americans. The admitted goal of CO2-slashing schemes like Cap & Trade is to jack up the price of energies like gasoline and coal to make expensive alternative energies more financially competitive. Of course their proponents hope you don’t realize that it’s ordinary Americans who are stuck paying higher prices for utilities and gasoline.

But the hit working Americans take under Voodoo Environomics doesn’t end with higher utility bills and gas prices. In bowing to environmental extremists in rejecting the Keystone Pipeline project, Obama has abandoned working Americans… or should I say unemployed Americans in search of good jobs.

In fact, Obama managed the rare feat of uniting business and labor in crying foul over this senseless decision. Jay Timmons, CEO of the National Association of Manufacturers decries the loss of 20,000 direct jobs and another 118,000 spinoff jobs that would have resulted from Keystone. Standing next to him, Terry O’Sullivan, head of the Laborers’ International Union of North America said, “Blue collar construction workers across the U.S. will not forget this (decision).”

The application of Voodoo Environomics also puts style over substance. Obama’s rejection of Keystone won’t stop the extraction of oil from Canada’s oil sands – the primary objective behind the pressure to kill the project. Canada will proceed without pause in exploiting their oil sands, regardless of what American politicians or environmental extremists say or do.

Anti-Keystone activists also point to the need to protect the Ogallala Aquifer, which encompasses parts of eight states and underlies a portion of the proposed route of the Keystone pipeline. But reviews of the thousands and thousands of miles of oil and natural gas pipelines over the Ogallala, some of which have been transporting oil for more than a half a century, show no contamination of the aquifer.

What it does do is ensure that oil won’t be shipped and refined by Americans and will likely go to other nations, particularly China. This may sound like hyperbole, and I wish it were. But Canadian Prime Minister Stephen Harper, in lambasting Obama’s rejection of Keystone, said that Canada would look to China to sell their oil.

America’s energy insecurity is moving into a dangerous new phase while our economy remains anemic and unemployment systemic. Rather than strengthening America’s energy position with a close ally and neighbor like Canada, Obama has increased our dependence on energy supplies from less-friendly nations that ensure little or no environmental safeguards.

The negative impact of this decision doesn’t end there. America’s risk exposure to dangerous energy disruptions stemming from global hotspots just went up. Such disruptions, such as those that could result from a crisis such as one brewing in the Straits of Hormuz, would be personal disaster for working Americas and a significant national security crisis for America.

The phantom gains and real losses stemming from Voodoo Environomics are starting to be realized. America needs more opportunities, not lost opportunities. Unfortunately for working Americans, there’s a greater abundance of the latter.

H. Leighton Steward is a geologist, environmentalist, author, and retired energy industry executive. He currently chairs the organization Plants Need CO2.

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Iran stops oil sales to British, French companies

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(Reuters) – Iran has stopped selling crude to British and French companies, the oil ministry said on Sunday, in a retaliatory measure against fresh EU sanctions on the Islamic state‘s lifeblood, oil.

“Exporting crude to British and French companies has been stopped … we will sell our oil to new customers,” spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.

The European Union in January decided to stop importing crude from Iran from July 1 over its disputed nuclear program, which the West says is aimed at building bombs. Iran denies this.

Iran’s oil minister said on February 4 that the Islamic state would cut its oil exports to “some” European countries.

The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.

Industry sources told Reuters on February 16 that Iran’s top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third – or over 300,000 barrels daily.

France’s Total has already stopped buying Iran’s crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell has scaled back sharply.

Among European nations, debt-ridden Greece is most exposed to Iranian oil disruption.

Motor Oil Hellas of Greece was thought to have cut out Iranian crude altogether and compatriot Hellenic Petroleum along with Spain’s Cepsa and Repsol were curbing imports from Iran.

Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said.

By the start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban.

Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales. Iran has criticized Riyadh for the offer.

Iran said the cut will have no impact on its crude sales, warning that any sanctions on its oil will raise international crude prices.

Brent crude oil prices were up $1 a barrel to $118.35 shortly after Iran’s state media announced last week that Tehran had cut oil exports to six European states. The report was denied shortly afterwards by Iranian officials.

“We have our own customers … The replacements for these companies have been considered by Iran,” Nikzad said.

EU’s new sanctions includes a range of extra restrictions on Iran that went well beyond U.N. sanctions agreed last month and included a ban on dealing with Iranian banks and insurance companies and steps to prevent investment in Tehran’s lucrative oil and gas sector, including refining.

The mounting sanctions are aimed at putting financial pressure on the world’s fifth largest crude oil exporter, which has little refining capacity and has to import about 40 percent of its gasoline needs for its domestic consumption.

(Writing by Parisa Hafezi; Editing by David Cowell)

EIA: U.S. Gas Pipeline Companies Added 2,400 Miles of New Pipe in 2011

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The U.S. Energy Information Administration said in a report that it estimates that U.S. natural gas pipeline companies added about 2,400 miles of new pipe to the grid as part of over 25 projects in 2011.

New pipeline projects entered service in parts of the U.S. natural gas grid that can be congested: California, Florida, and parts of the Northeast. Only a portion of this capacity serves incremental natural gas use; most of these projects facilitate better linkages across the existing natural gas grid, the EIA said.

By convention, the industry expresses annual capacity additions as the sum of the capacities of all the projects completed in that year. By this measure, the industry added 13.7 billion cubic feet per day (Bcf/d) of new capacity to the grid in 2011. The six largest projects put into service in 2011 added 1,553 miles and about 8.2 Bcf/d of new capacity to the system. Much of this new capacity is for transporting natural gas between states rather than within states. Golden Pass, Ruby Pipeline, FGT Phase VIII, Pascagoula Expansion, and Bison Pipeline projects added 6.1 Bcf/d, or about 80%, of new state-to-state capacity.

The EIA said that natural gas pipeline capacity additions in 2011 were well above the 10 Bcf/d levels typical from 2001-2006, roughly the same as additions in 2007 and 2010, but significantly below additions in 2008 and 2009. Capacity added in 2008 and 2009 reflected a mix of intrastate and interstate natural gas pipeline expansions, related mostly to shale production, liquefied natural gas (LNG) terminals, and storage facilities.

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Swiss come into US sights again over Iran

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Despite sanctions against Iran, there is one clandestine route that remains open for business: a short sea corridor connecting Oman with Iran (Keystone)

by Jean-Michel Berthoud, swissinfo.ch


The United States authorities have long been at odds with some Swiss banks, but could soon be turning their sights on Swiss-based commodity traders.

At issue are new economic sanctions against Iran passed by the US Congress at the end of last year, and which come into force on July 1.

Both the European Union and the US have imposed sanctions because they believe Iran is developing nuclear weapons. Iran says its nuclear progamme is for peaceful purposes only.
Switzerland has been unhappy about sanctions against Iran in the past, chiefly because it has represented US interests in Iran for over 30 years. It has also tried to mediate unofficially in the dispute over Iran’s controversial nuclear programme.

A year ago Switzerland stepped up its economic sanctions against Iran to bring them into line with those of the EU and the US, but only after coming under prolonged international pressure.

Now Switzerland finds itself being pushed into a corner once again. On January 23 the EU announced that it would step up its measures against Iran in the middle of 2012.

And on February 6 Barack Obama ratcheted up US sanctions yet further. He ordered an embargo on property and assets belonging to the Iranian government and to the Iranian central bank in the US. All Iranian financial institutions are also affected.

Switzerland stopped importing oil from Iran in 2006. According to the State Secretariat for Economic Affairs (Seco), in 2010 its imports of other items were worth only €27.4 million (SFr33 million). But its exports – mainly pharmaceuticals and machinery – were worth rather more: €562.6 million in 2010.

Tight-lipped Swiss

According to documents published by WikiLeaks, representatives of the US embassy in Bern have called on Seco to prevent the export of what are described as sensitive goods to Iran several times in the past few years. In most cases it seems that Seco immediately complied.

Seco deputy spokeswoman Marie Avet, could not confirm the truth of these leaks to swissinfo.ch, nor comment on them.
Christa Markwalder, a member of the Foreign Affairs Committee of the House of Representatives, reminded swissinfo.ch that the documents released by WikiLeaks were written for internal use by the US administration.

“I would not overrate Wikileaks,” she said. “After all, Switzerland is a sovereign state with its own foreign policy. We are also the protecting power for the US in Iran, which means we are of particular interest to the US as far as Iran is concerned.”

According to the respected German-language Neue Zürcher Zeitung newspaper, David S. Cohen, the US Treasury’s under-secretary for terrorism and financial intelligence, visited Bern at the beginning of February for talks with various members of the Swiss administration, including Seco. Cohen is responsible for the implementation of sanctions against Iran.

“No comment,” said Avet.

US embassy

However, Alexander N. Daniels, public affairs officer at the US embassy in Bern, was more forthcoming. He confirmed to swissinfo.ch that Cohen had been in Bern to explain the new US measures to the foreign ministry and Seco.

They include a boycott of Iran’s central bank, which has often acted recently as a financial intermediary for oil deals, and which is also thought to finance a large proportion of the imports for the Iranian nuclear programme.

Daniels added that Cohen had had similar talks in Britain and Germany.

Five giants

Although Switzerland no longer imports Iranian oil, about one third of the world’s oil deals are thought to be brokered by five Swiss-based commodity-trading giants – Glencore, Gunvor, Vitol, Trafigura and Mercuria.

Avet assured swissinfo.ch that the commodity traders would follow the sanctions in business involving the US.

She said the same question had arisen over the EU sanctions. But there the problem is that the EU has only issued a decision, and it is not yet clear how the measures are to be implemented in practice.

“So at the moment we cannot give you any more information,” she told swissinfo.ch. “But clearly, in trading and doing business with countries which have introduced these sanctions, we shall keep to them.”

Markwalder pointed out that Switzerland is a major trading centre for raw materials, in particular oil products, and some large companies were deeply involved. But she added that it is not clear to what extent they would be affected as far as oil products from Iran are concerned, if at all.

“It would actually be in the interest of these firms to obey the sanctions. Since these businesses are involved in trade all over the world, they have no interest in losing market access, licences and so on in the US.”

Swiss response

The Swiss government is to consult about how it should react to the strengthened EU and US measures. It will take its decision on the basis of an assessment by Seco.

Markwalder said the foreign affairs committee would also be discussing the matter.

“Switzerland would need some very good arguments if it were to break ranks with the western states – that’s to say, the EU and US,” she said.

“It’s true that we play a rather special role as a protecting power in Iran, but we still cannot afford to stand aside and provide a platform for sanctions busting.”

Jean-Michel Berthoud, swissinfo.ch
(Translated from German by Julia Slater)

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