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Wednesday May 28, 2008

Indonesia to pull out of OPEC with immediate effect as oil production declines

bloomberg.com :

Indonesia, the only OPEC member in Southeast Asia, will pull out of the group after aging fields and declining production force the region's biggest economy to boost imports as crude oil prices reached records. Energy Minister Purnomo Yusgiantoro will sign a decree today [28 May 2008] to exit the Organization of Petroleum Exporting Countries. "When I get back to the office ... I will sign that we withdraw from OPEC," Yusgiantoro told a group of foreign reporters at a lunch in Jakarta. The nation, a member since 1962, has been considering leaving the body in the past three years.

The country's oil output has slumped 49% from a peak of 1.686 million barrels a day [mbpd] in 1977 while subsidies to cap domestic diesel and gasoline prices may exceed $13 billion this year. Indonesia raised fuel prices by almost 30% this month to reduce the government's subsidy burden. Indonesia's daily crude output has fallen below 1 mbpd since February 2004. Indonesia produced an average 883,000 barrels of crude oil a day in 2006, while its consumption of refined oil products that year was 1.061 mbpd.

- The Indonesians have been talking about withdrawing from OPEC since 2005, and they have been talking about it again at the beginning of May [2008]. For the past months and years, the peakoiler community has been wondering : will they, or won't they - and when?

But today, the question is answered once and for all. Today, Indonesia is withdrawing from OPEC. This marks the end of an era for the country, and it will have wide-ranging implications for the South-East Asian region as a whole as well. And it is not only Indonesia's crude oil but also natural gas that is rapidly running out. Countries dependent on Indonesia's fossil fuel exports, including Japan and Singapore are already starting to feel the impact on their energy security.

(2008-05-28 23:41:15 SGT) [Energy] Permalink

Tuesday May 27, 2008

Toyota, Matsushita to build Ni-MH and lithium-ion battery plants for hybrid-electric cars

greencarcongress.com :

The Nikkei reports that Toyota and Matsushita intend to build two plants for automotive batteries: one for NiMH cells, the other for Li-ion cells. The Li-ion cells reportedly are targeted for plug-in hybrid electric vehicles. The companies seek to lift annual production of such batteries to around 1 million units by 2011. Panasonic EV Energy Co., a joint venture between Toyota and Matsushita, will build the plants. Total spending on the boost to production will be about 70 billion yen [US$673 million].

news.wired.com :

The world's other major automakers are also working on environmentally-friendly cars, and the race is on to produce the best batteries to power them. Earlier this week, Honda, Japan's second-biggest automaker, said it will boost hybrid sales to 500,000 a year by sometime after 2010. Nissan is focusing more on electric vehicles, promising them for the U.S. and Japanese markets by 2010. Nissan said this week its joint venture with electronics maker NEC will start mass-producing lithium-ion batteries in 2009 at a plant in Japan.

- Yes, the race is on for the next generation of hyrid cars and electric vehicles. This latest announcement comes hot on the heels of the previous ones by Nissan and NEC, and Volkswagen and Sanyo. So here are the figures we have so far for planned expenditures on building next-gen battery plants :

1. Volkswagen and Sanyo : $973 million
2. Toyota and Matsushita : $673 million
3. Nissan and NEC : $194 million

With these three industry groupings, the cumulative budget is already well over $1.8 billion dollars. We don't have Bosch's figures as yet, but to give you an idea, they plan to spend 40% of their R&D budget which came up to 3.6 billion euros in 2007, on green technology, which works out to well over 1.44 billion euros. If they were to allocate say a couple hundred million to their automotive battery department, that should bump the industry total to over $2 billion dollars being thrown at next-generation batteries for hybrids and electric vehicles. That is serious, big-time money. Like I said earlier : in time, the Li-Ion industry might even give the LCD industry a run for its money, in terms of potential size and economic impact.

(2008-05-27 23:50:17 SGT) [Energy] Permalink

British Airways to ground part of its fleet over rising fuel cost

business.timesonline.co.uk :

British Airways plans to ground part of its fleet from October [2008] to cut costs and stem potential losses caused by the crippling price of fuel. Confirmation of the move from CEO Willie Walsh comes as analysts warn BA may only break even or worse for the next two years. The sudden reversal has been caused by rapidly rising fuel prices - jet fuel went through the $1,300-a-tonne [$177 per barrel] mark last week - and sluggish demand. "It is a bloodbath," said one industry executive. Airlines rarely ground aircraft, preferring to keep their expensive fleets in the air. The airline would park its oldest, least fuel-efficient aircraft. Walsh said this would be likely to include its older Boeing 747, 767 and 737 airliners. If oil continues at $120 a barrel, BA's profits could be wiped out this year.

- An airline voluntarily parking its airliners over fuel costs instead of keeping them flying to earn some revenue? Now this is something new - they are doing this despite asset depreciation, possibly financing costs, and most definitely opportunity costs. This looks like a desperate, last-ditch measure. And if you thought crude oil prices were high at $130 per barrel or over, check out the jet fuel prices above - the refined product is reportedly going for over $177 per barrel.

Updated :

1. Two major Chinese airlines including China Southern Airlines to cut flights over jet fuel costs
2. Peak Oil, Peak Airlines - as oil prices go up, airlines cut flights and jobs

(2008-05-27 23:02:55 SGT) [Energy] Permalink

Monday May 26, 2008

2009 Honda Global Small Hybrid details released : bigger than Jazz/Fit, smaller than Civic

vtec.net (thread) :

TOV Forum member 'Art of Snow' posted this scan from a recent issue of Mag-X. Depicted in this scan is a rendering of Honda's new "Global Small Hybrid" model, along with a few details. Danielgr translated some of the key points:

- Price below 2 million Yen [USD $19,360].
- Fuel economy in Japanese cycle : 37 km/L.
- Size: 4400 x 1720 x 1520 mm (as tall as a Fit, but larger and wider).
- Japanese debut: March 2009

Compared with the larger Civic, MagX is saying that the new GSHybrid should be:
- 20% cheaper.
- 20-30% more fuel efficient.

- By comparison, the Civic has dimensions of 4540 x 1750 x 1435 mm, so this new "global small hybrid" (official model designation still unknown at this time) seems to sit in between the Civic and the Jazz/Fit in terms of size. A more detailed comparison, based on specifications from Kah Motor, Honda's primary Singapore dealer :

2008 Honda Civic Hybrid : 4540 x 1750 x 1430 mm
2009 Honda Global Small Hybrid : 4400 x 1720 x 1520 mm
2008 Honda City : 4390 x 1690 x 1485 mm
2009 Honda Jazz : 3920 x 1695 x 1525 mm

It's actually only slightly smaller than the Civic in terms of length and width (14 cm and 3 cm shorter respectively), and almost exactly the same height as a Jazz/Fit (0.5 cm difference).

vtec.net has more details :

In addition to weight reduction, a significant cost reduction in Integrated Motor Assist (IMA) components will result in the most affordable hybrid vehicle to date. This dedicated hybrid vehicle will be offered as a 5-door hatchback with seating for five passengers and will employ an exterior design concept that evokes the FCX Clarity fuel cell vehicle. Along with the Civic Hybrid, the new vehicle will be produced at an expanded IMA production line at Honda's Suzuka factory in Japan. The new small gasoline/electric hybrid vehicle will have expected annual global sales of 200,000 units per year - approximately 100,000 of which are bound for the North American market. Following this launch, Honda also plans to introduce another unique small hybrid vehicle based on the CR-Z sports car first shown at the 2007 Tokyo Motor Show as well as a Fit hybrid model. Including the Civic Hybrid, these four hybrid vehicles are expected to reach combined annual global sales of approximately 500,000 units.

It's probably still too early to talk about performance specifications since even the engine type is not known yet. It could be an L-series engine like the Civic Hybrid, perhaps even the same L13A, or maybe a slightly smaller one such as the L12A. There have been rumours some months back about a 1.0L version for this dedicated hybrid model (making it perhaps the L10A). If true, that might be one option to bring down the cost by the 20% they are talking about.

Pricing-wise for the Singapore market, looking at the current pricing for the Civic Hybrid as compared to the Jazz and City, one could imagine this model at a list price of say SGD $64-66K or thereabouts. Prospective 1.3L Jazz or City owners could "just go hybrid" instead.

Some people wonder what happens to the Civic Hybrid when this model comes out. Well, the current platform should still continue to sell well, and the next platform change is some 3 years away when the 2011 Honda Civic Hybrid is planned to be released. A Civic is a Civic. I'm spotting more and more Civic Hybrids on the roads (and carparks) nowadays. With oil over $130 per barrel and headed for $150, $200 and beyond, I'm seriously considering a switch from Civic (conventional) to Civic (hybrid) myself. To a peakoiler, $300 or $400 oil isn't outside the realm of possibility. It is inevitable. It's only a matter of time.

(2008-05-26 13:15:14 SGT) [Energy] Permalink

Sunday May 25, 2008

Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008

This article belongs to the Singapore inflation watch story arc.

channelnewsasia.com :

Singapore's annual [CPI] inflation rate rose to a new 26-year high of 7.5% in April [2008] as food, housing and transportation costs soared and is now a risk to the economy, the government said on Friday [23 May 2008]. Food prices alone rose 8.5%, transportation and communication were 7.0% higher and housing costs became 11.8% more expensive, the statistics department said. It said April's inflation rate is the highest since February 1982, when it stood at 9.0%. Oil prices surged to unprecedented record peaks of more than US$135 a barrel on Thursday [22 May 2008] and analysts said it could still go higher.

Ravi Menon, second permanent secretary at the trade ministry, said inflation is emerging as a bigger risk to the economy : "We expect food and oil prices to remain elevated over the near term and filter through into domestic prices." The trade ministry said inflation should remain around the current levels for the next two months and ease in the second half of the year. Analysts said the central bank could further strengthen the Singapore dollar in a bid to tame inflation.

- And of course, the 7.5% inflation rate is just the official CPI figure. Actual street prices are in many cases running much higher than that. Official "second half easing" talk notwithstanding, my opinion is that eventually we will hit the double-digit inflation figures of the 1970's and there is some chance that we could go beyond that.

And if (or might that be "when") we go beyond double-digit inflation and into triple-digit inflation, we'll be going into hyperinflationary territory. Most people see global hyperinflation as a rather remote possibility at this moment, but remember that most people also saw triple-digit world crude oil prices as a rather remote possibility just a couple of years ago. Inflation is going exponential and we ain't seen nothing yet.

Updated :

1. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%

(2008-05-25 19:20:56 SGT) [Biz] Permalink

Singapore : SMRT adds 700 extra MRT train trips a week costing it S$5m annually

channelnewsasia.com :

SMRT is increasing the number of its train trips. In one week, there will be at least 700 more trips to cut commuters' waiting time and provide them with a more comfortable ride. A common complaint by MRT passengers is that it gets very crowded at peak periods and on many occasions, commuters aren't able to get on the train.

SMRT said they are already operating at the best intervals of two minutes at the peak within peak and can't improve this any further, for now. However, a few commuters were concerned that fares would go up with the increased trips. The additional train trips are expected to cost SMRT an additional S$5 million yearly.

- The transport companies of Singapore aren't exactly charities, so one of two things would happen : margins will be reduced which could lead to cost- (if not corner-) cutting, or prices would have to go up. If they can absorb the additional cost from their existing margins without sacrificing service quality that would be great, but it remains to be seen how this will turn out. That's from an economic point of view. From a peakoiler's point of view, an increase in MRT train trips is a good thing : it encourages more people to go for public transport instead of driving, and that reduces both oil demand and pollution.

(2008-05-25 17:54:11 SGT) [Energy] Permalink

« Previous month (Apr 2008) | Main | Next page of month (May 2008) »

Most popular blog postings on lowem.log :

1. Singapore SIBOR interest rates fall to 1.5%, lowest since Dec 2004
2. 2009 Honda Global Small Hybrid details released : bigger than Jazz/Fit, smaller than Civic
3. Singapore : Inflation rate could push past 6% in Q1 2008
4. Singapore SIBOR rate fell to 1.25% in Apr 2008, lowest since Aug 2004
5. Fuel prices seen stoking Malaysia inflation in 2008
6. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
7. Singapore CPI inflation hits 6.6% in Jan 2008 - a new 25-year record high
8. Singapore SIBOR rate falls to 1.31%, lowest since Nov 2004

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7. Singapore SIBOR rate fell to 1.25% in Apr 2008, lowest since Aug 2004
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