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Gasoline Reaches Record, Oil Rises After BP Texas Refinery Fire
March 24, 2005
http://www.bloomberg.com/apps/news?pid=10000103&sid=an0ZZEVcvKqY&refer=us#
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
March 24 (Bloomberg) -- Gasoline futures surged to a record and crude oil rose after an explosion at BP Plc's Texas City refinery, the third-largest in the U.S., raised concern about supplies before more drivers take to the road for vacation.
At least 14 people died and more than 70 were injured by the blast, BP refinery manager Don Parus told reporters in Texas City, Texas, yesterday. The plant can process 460,000 barrels of oil a day, supplying about 3 percent of U.S. fuel needs. Retail prices for U.S. gasoline also rose to a record this week.
"We know that prices will automatically react to any supply disruption because the entire oil-supply chain is working on a just-in-time basis," said Frederic Lasserre, the head of commodities research at Societe Generale SA in Paris. "We have very low coverage in terms of stockpiles and this has stopped the selling wave."
Gasoline for April delivery surged as much as 2.1 cents, or 3.3 percent, to $1.6080 a gallon on the New York Mercantile Exchange and was up 1.76 cents at $1.5925 a gallon at 10:32 a.m. London time. Crude for May delivery was up 22 cents at $54.03 a barrel after jumping as much as 1.3 percent to $54.51.
Crude fell $2.22 a barrel yesterday, or 4 percent, its biggest one-day drop this year after the U.S. government said crude supplies soared to their highest since July 2002. In the past week, prices have declined 6.3 percent from a record $57.60 on March 17. They have still gained 46 percent in the past year.
Fourth Incident
Yesterday's refinery explosion at 1:20 p.m. local time occurred in a unit that makes components that boost octane in gasoline. BP Chief Executive John Browne will travel to Texas today to meet employees and families affected by the blast. The incident was at least the fourth in the past year at the Texas City plant that caused injuries or a partial plant shutdown.
The days of demand that can be satisfied with U.S. gasoline stockpiles has steadily dropped in the past two years, according to the Energy Department. Surging motor-fuel consumption damps the effect on prices of high inventory levels.
The average weekly retail price of gasoline in the U.S. jumped to a record high of $2.11 a gallon as of March 21, the Department said in a report yesterday. Record prices may hurt the economy as consumers earmark a greater part of their income for transport.
"It's a big deal, as we're heading into the gasoline season," said Anthony Nunan, manager of the international oil- trading business at Mitsubishi Corp. in Tokyo. Gasoline "is leading the oil complex right now, even though inventories are high."
Driving Season
Refiners attempt to accumulate gasoline for the so-called driving season, which lasts for about three months in the U.S., running from the Memorial Day holiday in late May to the Labor Day holiday in early September. U.S. stockpiles last week dropped almost three times as much as expected, by 4.1 million barrels.
The refinery is London-based BP's largest, stretching over 1,200 acres and employing about 1,800 workers. It produces about 30 percent of BP's fuel supply in North America, according to the company's Web site.
"The damage at the refinery seems to be confined to one unit," said Andrew Bell, a London-based European equity strategist at Carr Sheppards Crosthwaite, which oversees the equivalent of $11.9 billion, including BP stock. "The next likely move for the oil price will be downward."
Prices have fallen more than $3 from last week's record amid signs that higher U.S. interest rates will slow economic growth and fuel consumption. The Federal Reserve raised the benchmark interest rate on March 22 for the seventh time since June, saying inflation pressures have picked up. Prices paid by U.S. consumers rose 0.4 percent in February.
"People have been shaken by what the Fed has done to keep inflation in check," said Robert Montefusco, a broker at Sucden (U.K.) Ltd. "Demand for oil is still out there and the Fed is trying to ease it. If we had this explosion two weeks ago, we would've surely gone to $60'' a barrel, but the Fed has prompted funds to get out."
Speculative long positions of crude oil on Nymex, or bets that prices will rise, were at their highest since May the week ended March 8, falling for the first week in five last week, according to the Commodity Futures Trading Commission.
Gasoline supplied, a demand indicator, fell to 9.1 million barrels a day for the week ended March 18, according to government figures. U.S. refineries operated at 90.2 percent capacity last week, the Energy Department said yesterday, as they perform seasonal maintenance.
To contact the reporter on this story:
Alejandro Barbajosa in London at abarbajosa@bloomberg.net.
To contact the editor responsible for this story:
Stephen Taylor at staylor8@bloomberg.net
[I had to read this story twice to understand its import for all of us. This should have been the number one story on every network and on the front page of every paper. Even as the hubris of the mind-numbing mass media is telling us there's only a slight problem with oil, the International Energy Agency is preparing measures that could result in police-enforced driving bans, rationing and quotas here in the US. It is clear that the IEA admits that some kind of immediate and drastic reduction in consumption is necessary to avoid a breakdown. This is the same IEA that has been saying for years, "Don't worry, There's plenty of oil." -MCR]
From Adam Porter at Al Jazeera-- International Energy Agency Proposes Ban-Rationing-Enforced Quotas on Oil Consumption -- Measures Would Apply in US
Energy body wants brakes on fuel consumption
by Adam Porter in Perpignan, France
Thursday 24 March 2005 1:51 PM GMT
http://english.aljazeera.net/NR/exeres/655B03B0-32C2-4BF7-A3E8-F7EFD8144333.htm
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
The International Energy Agency is to propose drastic cutbacks in car use to halt continuing oil-supply problems. Those cutbacks include anything from car-pooling to outright police-enforced driving bans for citizens.
Fuel "emergency supply disruptions and price shocks" - in other words, shortages - could be met by governments. Not only can governments save fuel by implementing some of the measures suggested, but in doing so they can also shortcut market economics.
Vehicular fuel accounts for a big
chunk of global oil consumption |
An advance briefing of the report, titled Saving Oil in a Hurry: Measures for Rapid Demand Restraint in Transport, states this succinctly.
"Why should governments intervene to cut oil demand during a supply disruption or price surge? One obvious reason is to conserve fuel that might be in short supply.
"But perhaps more importantly, a rapid demand response (especially if coordinated across IEA countries) can send a strong market signal."
The report goes on to suggest a whole series of measures that could be used to cut back on fuel consumption. They are cutting public-transport costs by a certain amount to increase its usage while simultaneously dissuading car use.
Sweeping proposals
Then more radically the idea of going further and cutting public-transport costs by 100%, making them free to use. Car-pooling, telecommuting and even corrections to tyre pressures are also suggested.
But the most hardline emergency proposals come in the form of drastic speed restrictions and compulsory driving bans. Bans could be one day in every 10 (10%) or more stringently on cars with odd or even number plates. They would be banned from the roads on corresponding odd or even days of the month (50%).
The report says public transport should be made free to use |
In forming its conclusions the IEA tacitly admits that extra police would be needed in these circumstances to stop citizens breaking the bans. Even the cost of those extra patrols are part of the IEA's study.
"Policing costs are more substantial and may consist of overtime payments for existing police or traffic officers or increases in policing staff. We assume this cost at one officer per 100 000 employed people."
As an example that means that the US workforce, currently around 138 million people, would need an extra 1380 officers to help enforce the bans. It may seem an optimistic figure. But even if this were so, the IEA is not put off.
"If our policing cost estimates are relatively low ... results clearly show that even a doubling of our estimate would make (bans) a cost-effective policy. The more stringent odd/even (day) policy is also more cost-effective than a one-day-in-ten ban, as the costs are the same ... maintaining enforcement is critical."
Tough love
Yet despite these measures, that many citizens would find quite draconian, the IEA concludes that tough love is better than none at all.
"Our main conclusion finds that those policies that are more restrictive tend to be most effective in gaining larger reductions in fuel consumption. In particular, driving restrictions give the largest estimated reductions in fuel consumption."
High oil prices are spurring talk of conservation and cutbacks in use |
Here, however, they do strike a word of warning for governments and those in power.
"Restrictive policies such as this can be relatively difficult to implement and thus may come at higher political costs."
According to the IEA's little-known emergency treaty, the Agreement on an International Energy Programme (IEP), "measures to achieve demand restraint fall into three main classes - persuasion and public information, administrative and compulsory measures, and finally, allocation and rationing schemes".
This would mean that countries who signed up to the treaty, including the five biggest economies of the world - US, Japan, Germany, UK and France - would all have to institute cuts.
"In the event of an activation of IEP emergency response measures, each IEA Member country will be expected to immediately implement demand restraint measures sufficient to reduce oil consumption by 7% of normal demand levels. In a more severe disruption, this could be raised to 10%."
Effective ban?
There are some interesting asides in the report. As Americans have the most cars, the driving bans could be got around by having one car with an odd, and one car with an even number plate.
Proportionately it makes the ban less effective than in other countries.
For Opec members, high prices have meant budget surpluses |
As well as this older cars may be kept in service longer if they have "useful" number plates which the IEA admits is "counter-productive from an air-pollution reduction perspective, as older vehicles would tend to pollute more".
However, curtailing the working week and home working would be more effective in the US as more people travel to work alone in their cars.
As would correct tyre pressures. In Japan speed reductions are less effective as there are less motorways on which to travel fast.
Families with only one car would also be hit harder than their richer friends as "bans may have some additional costs in terms of reduced accessibility and mobility options particularly for single-vehicle households with limited access to alternative modes".
Without doubt this report signifies that the IEA is searching for new ways to maintain supply security in a volatile oil market. Whether it can achieve its aims with this radical report is another matter.
[PROMIS-derived software, assassinations, blackmail, threats - whatever it takes, the United States will compel its reluctant partners to participate in its imperial strategy until they fully achieve the power to refuse. As Europe bows to American pressure to renew an arms ban that would deny new weapons to the Chinese, Canada refuses asylum to an astute and principled American paratrooper. The message from Canada: we would rather permit war crimes to occur than disobey the United States. Canadian citizens, who do read, are unlikely to be pleased. But the implications for Americans are enormous. Peak Oil has locked "The Crazies" in the American executive into a pre-planned scheme of world hegemony with little room for maneuver. Like Lyndon Johnson, they will "stay the course," straight past successive thresholds of no return where the costs of imperial slaughter -- even when measured in sheer energy, neglecting lives lost, man-hours, financial expenditure, environmental disaster and lost societal opportunities -- overwhelm any possible benefits.
If the neocon / Cheney junta are fascists, their naïve followers on the "moderate" right are like the Roman noblemen of the Late Republic: believing themselves conservatives, they conserved Rome to death. With its armies overstretched and the national wealth horribly polarized, Rome lost the loyalties of its majority underclass and had to defend its imperial holdings with thousands of paid mercenaries. When the money ran out, the great Imperial bully became the victim, and a desperate authoritarian militarist regime staved off total collapse until it exhausted itself and entered the Dark Ages. But unlike the Roman Empire, ours does not have centuries in which to try and hang on.
Each week's news story of military overstretch adds to the likelihood of a draft and brings us closer to its legal advent. This new extradition from Canada comes after a long period of mixed signals in which the U.S.-Canadian authorities allowed the spread of the impression that Canada might serve as the refuge it was during the Vietnam War. Now that the draft is getting close, another veil is lifted and presto: getting out will be complicated indeed. - JAH]
FTW readers are urged to consult our archive of stories on the draft:
http://www.fromthewilderness.com/free/ww3/index.shtml#draft and our continually updated (subscriber only) EXTRADITION TABLE to see the relative merits of various countries as possible havens :
http://www.fromthewilderness.com/members/022704_draft_ruppert.html
Canadian Government Denies Refugee Status to American Soldier Opposed to War in Iraq
By BETH DUFF-BROWN Associated Press Writer
Mar. 24, 2005
http://abcnews.go.com/International/wireStory?id=610837
In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.
Canada on Thursday denied refugee status to a former U.S. Army paratrooper who said he would be committing war crimes if sent to Iraq, a major blow to Americans who have fled north of the border rather than fight a war they claim commits atrocities against civilians.
The government's ruling said Jeremy Hinzman had not made a convincing argument that he would face persecution or cruel and unusual punishment if sent back to the United States.
The decision, which was formally announced on a government Web site, could affect at least eight and possibly dozens more American soldiers seeking refuge in Canada, yet help improve strained relations between Washington and Ottawa.
Hinzman's attorney, Jeffry House, said his client would appeal the ruling and still believed he would be granted refugee status in Canada.
"He is disappointed," House told CBC TV. "We don't believe that people should be imprisoned for doing what they believe is illegal."
Hinzman, 26, fled from Fort Bragg, N.C., in January 2004, weeks before his 82nd Airborne Division was due to be deployed to Iraq. He had served three years in the Army, but had applied for conscientious objector status before his unit was sent to Afghanistan in 2002.
Hinzman lives with his wife and young son in Toronto, where Quakers and the War Resisters coalition of anti-war groups have taken on his cause and provided some shelter. Coalition supporters intend to demonstrate later Thursday in front of the U.S. Consulate in Toronto.
Hinzman could face charges of desertion if sent home and would face up to five years in prison. He and seven other U.S. military deserters are being represented by House, a Wisconsin native who came to Canada in 1970 as a draft dodger during the Vietnam War.
Canada opposed the U.S.-led invasion of Iraq. The Pentagon has urged the deserters to return to the United States and take up their concerns at their respective military bases.
Immigration and Refugee Board member Brian Goodman, who wrote the ruling, said Hinzman may face some employment and social discrimination. But, he added, "the treatment does not amount to a violation of a fundamental human right, and the harm is not serious."
Hinzman argued before the Immigration and Refugee Board last December that he would have been taking part in war crimes if he had been deployed with his unit. He claimed the war in Iraq was illegal and he would be persecuted if forced to return to the United States.
House believes as many as 100 other American war resisters are hiding in Canada, waiting to see how Hinzman's case is played out before coming forward. He said 30,000 to 50,000 Americans fled to Canada during Vietnam and were allowed to settle here, but Hinzman would have become the first American soldier to be granted political asylum in the country.
During the Vietnam era, young American men could be drafted into military service, but now enlistment in U.S. military is voluntary. The military attracts many young recruits with job skills training and programs that help pay for university.
Pvt. 1st Class Joshua Key, 26, of Oklahoma City is the latest war resister to flee to Toronto, arriving two weeks ago with his wife and four children. He told the Toronto Star that he served in Iraq with the 43rd Combat Engineering Company, which was deployed in April 2003.
Key said he served eight months in Iraq before he left the military when he was on leave back at the 43rd's base in Fort Carson, Colorado in December 2003.
"I was in combat the entire time I was there," said Key. "I left for Iraq with a purpose, thinking this was another Hitler deal. But there were no weapons of mass destruction. They had no military whatsoever. And I started to wonder."
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Gasoline Reaches Record, Oil Rises After BP Texas Refinery Fire