Subsidy light or Subsidy Lies? And in the realm of ‘why should I believe this.’ Iran President Ahmadinejad claimed, this month, that, since the (sanction-related) dramatic reduction in fuel subsidies in late 2010, gasoline consumption has fallen 50% (!) and, over a five year period, is now 20% lower, despite a doubling in automobile population.
Implications of A Different type of Entitlement Program I’ve written about the insidious circle of Middle East’s domestic energy subsidies – cheap water/energy requires cheap oil/gas which drives sharp consumption/waste. In some fashion, this is understandable/necessary so satisfy social needs in high poverty populations. However, the IEA reports that 80% of global energy subsidies benefit …
“Can’t they just Get Along?” The Gulf Cooperation Council held an Unconventional Gas Symposium in early October. While experts claim that the region contains 2500 TCF of potential shale gas, outsiders bemoan the lack of expertise, water (necessary for fracking), infrastructure (day rates for rigs are triple the US), and price/economics (incremental gas prices are …
Oil Markets and Geopolitics From the headlines, supply is improving, with Libya’s steady return to service. The country claims over 500 kbd, although the sum of operator figures don’t quite add up. On the other hand, Iraq’s nearterm ramp has stagnated amidst the ongoing lag in takeaway/infrastructure. IOCs/contractors are having trouble developing bids to the …
Energy Contradictions Continue We’ve written about the insidious, unintended, consequences of dramatic and inflexible subsidies, nowhere more n evidence than the MidEast, where sub $1 natural gas, sub nickel water and power costs, while well intentioned for the masses, are proving untenable over the longer term. Add to this the social unrest which argues …
Well, at the end of the day, slowing economic activity inevitably reflects – badly – on energy and commodity prices (duhh), especially when the macro correlations (strong dollar-weak commodities, etc) are so fierce. During periods of economic growth, a key component in commodity valuation is the recognition of supply bottlenecks, and a price attached …
State of the State – Half a Year after Fukushima It’s been less than six months since the human, environmental, and economic tragedies of the Japanese earthquake/tsunami and Fukushima accident. The effect on global nuclear power has not been uniform — US plans continue to move toward late decade construction. Several Westinghouse/Toshiba designs are …
Oil and the Markets The oil price seems secondary to the gyrations of global markets, accounting, in part, for the delay in this note, although US consumption continues to support weakening economic activity (consumption down 3% YoY for most of the summer). While it’s not easy to allocate reduced US consumption between energy …
Middle East and Euro Geopolitics This month’s copy of Sustainable Energy and Geopolitics, published by MEES (Middle East Economic Survey), takes a new turn — almost entirely devoted to the State of the Nuclear Power World, post Fukushima. This is an important statement, given the region’s plans to build up to 20 nuclear power plants, …
Ethanol is a Growth Chemical, but not from Corn I never thought I’d see the day – untaxed moonshine is worth as much as the drinkable stuff. But a few anecdotes: Brazil, the largest ethanol consumerism the world, with the lowest cost process, is short, and getting shorter. High sugar prices are forcing ethanol economics …