Saturday August 12, 2006

Energy expert warns of tough times ahead

peakoil.com -> wcsh6.com :

Oil prices have risen sharply and gasoline prices are expected to follow after this week's shutdown of one of North America's biggest oil fields. Energy expert Matthew Simmons, the country's top investment banker for the energy industry, says it's a reminder of how fragile the oil supply really is. Simmons says the world's oil supply will start shrinking in the coming years, even as demand for oil and natural gas continues to grow - that means a real risk of shortages. So he says Americans need to change their habits, and learn to conserve much more.

"We need to .. launch a research effort the likes of which we have never done before to go on a quest to find new sources of energy that don't exist today," Simmons said. Among the other changes he advocates: moving more fright by rail and by water, to make less use of trucks and have people work closer to where they live. 70% of America's energy, Simmons says, is used for transportation.

(2006-08-12 16:02:01 SGT) [Energy] Permalink Comments [7]

All signs point to an economic slowdown

peakoil.com -> contracostatimes.com :

From bustling Wall Street to the quiet corridors of the Federal Reserve, there's widespread agreement that the once-sizzling U.S. economy is slowing. The question now is what's next: a return to stable, modest growth or a skid into recession. The answer will play out in the months ahead. It depends on whether soaring energy prices ease, inflation threats diminish and the slumping housing sector stabilizes or sinks.

Richard Berner, the chief U.S. economist for Morgan Stanley, expects the housing slowdown alone to trim U.S. economic growth by as much as 1.5 percentage points. The housing boom helped drive economic growth through a combination of rapidly rising home values and historically low lending rates on refinancing and home-equity loans. These led many Americans to use their homes as a sort of ATM, borrowing against their rising value to fund vacations, new cars or college tuitions. Now that may be ending.

Meanwhile, oil prices keep climbing. Higher oil prices ripple across the economy, driving up the cost of everything from gasoline to asphalt to fertilizer. Businesses pass on those costs to consumers. That's inflation: the rise in prices across an economy. The tipping point for recession could be some supply disruption like last year's hurricanes, which crumpled oil rigs and platforms across the Gulf of Mexico. "When you pair the level of interest rates and that pressure from oil prices, it's more pessimistic than anticipated," said Doug Duncan, the chief economist for the Mortgage Bankers Association in Washington.

(2006-08-12 15:54:51 SGT) [Biz] Permalink

BP sees Alaska repairs costing $100 million

news.yahoo.com :

BP expects the replacement of corroded pipelines at the Prudhoe Bay oil field in Alaska to cost around $100 million, a company source said, but the total cost to BP will likely be several times this figure. BP unexpectedly announced the phased shutdown of the U.S.'s largest oil field on Sunday to replace 16 miles of pipeline at the field after it discovered severe corrosion.

A spokesman said BP's average profit margin in the U.S. was $25 per barrel. This suggests a full outage would cost BP $2.6 million per day or $350 million if the field is fully shut down until the year-end. The U.S. government does not expect full production to resume before January 2007. Around $10 billion has been wiped off BP's market capitalization since the discovery of the corrosion was announced.

See also :

1. Major Alaskan oil field shutting down
2. More BP Alaska pipeline news
3. BP's Prudhoe Bay a "giant water field"

(2006-08-12 15:46:37 SGT) [Energy] Permalink

Seagate Q4 profit dives 98% on Maxtor purchase

business-times.asia1.com.sg :

Seagate Technology - the biggest US computer hard-disk drive maker - said its quarterly net profit plunged 98%, due principally to costs from acquiring rival Maxtor Corp. Seagate said average selling prices fell as personal computer makers cut prices to compete. Seagate also said it planned to repurchase as much as US$2.5 billion of its stock over the next two years.

Seagate acquired Maxtor in May for US$1.9 billion and announced 6,000 job cuts at Maxtor, about half of Maxtor's workforce, after the acquisition. Seagate's main competitors include Japan's Fujitsu and Hitachi.

See also :

1. Seagate buys Maxtor for $1.9 billion
2. Seagate cutting 6000 jobs with Maxtor deal

(2006-08-12 15:40:57 SGT) [Biz] Permalink

Soaring oil prices push up airline surcharges

business-times.asia1.com.sg :

Airlines are raising fuel surcharges or warning of further hikes because oil prices are back on the boil. Oil prices hit US$78.64 a barrel in London after BP said it was shutting down the biggest US oil field in Alaska. Airlines paid a total of US$92 billion for fuel in 2005, an increase of 50% from the previous year.

Jet fuel has now become the single biggest expense for airlines and the sector expects to post an aggregate loss of US$3.0 billion in 2006 despite increased traffic. Almost all carriers except the budget airlines have passed the extra cost on to passengers.

See also :

1. Airlines worldwide set to lose $3 billion this year
2. $100 oil would threaten airlines: IATA economist

(2006-08-12 15:34:44 SGT) [Energy] Permalink

Malaysia requires two nuclear reactors to generate electricity

bernama.com.my :

Malaysia needs at least two nuclear reactors as an alternative to fossil fuel to generate electric power, said Prof Datuk Dr Noramly Muslim, chairman of the Malaysian Nuclear Licensing Board. He said fossil reserves such as petroleum and coal are depleting and as such nuclear fuel is needed as an alternative to generate electric power.

Malaysia was planning to use nuclear power to generate electricity after the year 2020 but it could be implemented much sooner. Noramly said Indonesia and Thailand would use nuclear power by 2016 and 2018. UKM's Deputy Vice-Chancellor (Academic and International Affairs) Prof Datuk Dr Sukiman Sarmani said Malaysian has the expertise and the scientists are now merely waiting for the "green light" from the government to begin the nuclear program.

See also :

1. Malaysia "needs to develop nuclear energy"
2. Malaysians urged to change energy use patterns
3. G8 plan for global nuclear expansion revealed

(2006-08-12 15:26:52 SGT) [Energy] Permalink

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