[For well over a year FTW has been alert to the likelihood of proxy wars in various key oil-producing regions. Proxy wars would involve nations like the US, Britain, France, China, Russia, and Iran-supporting guerilla groups that would trigger regional conflicts as a prelude to larger open conflict. This is the classic escalation of covert operations described by the legendary Ted Shackley (CIA) in his rare book The Third Option. Buried at the bottom of this story is an ominous indicator that tensions between Venezuela and Colombia may now be on the rise. Along with the Far East, The Straits of Malacca, and an exploding Africa, South America now looks ripe for conflicts which at any point, could erupt into more widespread violence on the slightest pretext. As we have seen recently with the world’s fifth-largest oil exporter, Nigeria, any one of these regions could produce a spark that shuts down a few hundred thousand barrels a day of production and topples the first domino that would now bring down the global economy. – MCR]
Chavez: Oil Will Be Destroyed if Attacked
by Deborah Rey
The Associated Press
Asuncion, Paraguay
Wednesday, April 19, 2006
http://www.washingtonpost.com/wp-dyn/content/article/2006
/04/19/AR2006041902707.html
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.
Venezuelan President Hugo Chavez on Wednesday again raised the specter of U.S. designs to oust him and promised that his government will blow up his country's oil fields if the United States should ever attack.
U.S. officials have repeatedly denied any military plans against Chavez, but also call him a threat to stability in the region.
Speaking to other South American leaders, Chavez said his conflict with Washington is rooted in the U.S. thirst to control oil. He said the Americans will be denied that in Venezuela, which is the world's fifth-largest oil exporter and one of the biggest suppliers to the U.S. market.
If the United States attacks, Chavez said, "We won't have any other alternative _ blow up our own oil fields _ but they aren't going to take that oil."
Some of Chavez's political opponents at home call his warnings about a U.S. invasion far-fetched and contend he pursues the verbal conflict with Washington to encourage a sense of struggle against a foreign enemy as he heads toward the presidential election in December.
Chavez cited what he called a regular flow of threatening statements and actions from the U.S. government, from U.S. naval exercises being held this month in the Caribbean to U.S. questions about Venezuela's deepening ties with Iran.
"The latest they've invented is that we're sending uranium to Iran, and what's more yesterday it came out in the Venezuelan press that we're making a secret plan to bring Iranian nuclear missiles and install them in Venezuela," he said.
In that report, the Venezuelan newspaper 2001 cited unidentified U.S. intelligence sources as saying Iran and Venezuela made a secret deal to ship missiles to Venezuela and Cuba aboard oil tankers. It did not provide any details about its sources, and the report was roundly denied by Venezuelan officials as preposterous.
Chavez accused the United States of "searching for an excuse for anything" against Venezuela, noting U.S. warship are holding exercises this month in the Caribbean _ "there under our very noses."
In Caracas, meanwhile, Venezuela's defense minister, Adm. Orlando Maniglia, said Chavez's military plans to hold its own exercises soon along the coasts and with neighboring countries' armed forces.
"We already have planned some future exercises with the government of Curacao, and also with the Dutch, with the navy and armed forces of Colombia," he said, without giving any details.'
But Venezuela also has problems with neighboring Colombia. It demanded Wednesday that Colombian President Alvaro Uribe investigate a Colombian magazine's allegations that Uribe's secret police plotted to assassinate Chavez.
"The government of President Uribe is obligated to thoroughly investigate and share its investigation with the Venezuelan government," Vice President Jose Vicente Rangel told reporters in Caracas.
Uribe has denied the accusations.
[In order to prevent a panic, the media will blame the MTBE/ethanol switch for these difficulties as long as possible. There is some truth to the fact that the mandated switch to ethanol is causing problems. Ethanol cannot be transported by pipelines (it corrodes them) but only in trucks. But these shortages are only masking the underlying reality of Peak Oil. The reason that the switch is so problematic is because as much as 20% of US refinery capacity has not recovered since Katrina and Wilma. 23% of all Gulf of Mexico oil production is still shut-in and will probably never be repaired. There is a distinct lack of refinery capacity so that the ethanol blended fuels can only be produced at a few locations. Why? Well, Matt Simmons explained why in 2000 when he said that new power generating stations and refineries weren’t being built “because the return on investment is uncertain.”
If it walks like Peak Oil, talks like Peak Oil, smells like Peak oil, and feels like Peak Oil, it probably is Peak Oil. – MCR]
Local Stations Run Out Of Gasoline
NBC10.com
Thursday, April 20, 2006
http://msnbc.msn.com/id/12410097/
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.
Several local gas stations ran out of fuel on Thursday as gas prices also soared in three East Coast states.
Shortages were reported in Delaware, New Jersey and Pennsylvania on Thursday afternoon.
An NBC 10 news team was at a Wilmington, Del., gas station on Thursday afternoon, where reporter Bill Baldini informed drivers pulling up to the pumps that the station was on empty.
Closer to home for NBC10.com, a Luk Oil station just blocks from our station was out of gas as news trucks hit the street to report the Thursday afternoon news. Stations on the Admiral Wilson Boulevard in New Jersey and in several Pennsylvania areas are also out of fuel, or only selling premium fuel, AAA told NBC 10.
AAA spokeswoman Cathy Rossi told Baldini that the shortages were due to "logistics."
She said that a switch from MTBE to ethanol as a fuel additive is causing the shortages, and that more ethanol was in transit to refinieries.
Rossi said the shortages were expected to be temporary.
By temporary, AAA and other experts said the shortage situation could be for as long as 30 days. The news was unwelcome to drivers who saw a big jump at the gas pumps overnight. On Thursday morning, NBC 10 reported that prices at some local gas stations had hit $3 per gallon.
An NBC 10 news van stopping in Conshohocken, Pa., saw gas selling for $3.09 for a gallon of regular unleaded at a local station.
Don't expect those prices to go down in the near future.
Overseas on Thursday, crude oil prices hit a new record intraday high of $72.49 after weekly data showed a drop in U.S. gasoline stocks.
This is raising worries that refiners don't have an adequate inventory cushion ahead of the peak summer driving season.
The previous record intraday price, set Wednesday, was $72.40 a barrel.
Prime Minister out of Closet on Peak Oil
by Steve McKinlay
PowerLess NZ
Friday, April 21, 2006
http://www.scoop.co.nz/stories/PO0604/S00169.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.
As the price of oil hangs at record heights, unmoving, like a pall threatening to choke economies and festering the sore that is inflation (October delivery contracts on the NYMEX are over US$75 a barrel), the cattle-class as well as the impotent media transfixed by daily trivialities and titillations by and large continue to remain clueless as to why we are paying almost $1.80 a litre at the pump.
Economists and “analysts” roll out the usual suspects whenever the price moves skyward, security worries in Nigeria, “weapons of mass destruction” in Iran, or was that Iraq, hurricanes in the gulf. The point today is any minor supply concern that results in a few thousand-barrel production cutback translates into a several dollar bull-run on oil on the mercantile exchange which is never clawed back. To say that “the end of cheap oil” is here is to merely state the bleeding obvious.
Matt Simmons energy investment banker and Peak Oil advocate argued that 2006 would be the year Peak Oil would be absorbed into the public consciousness as much as climate change and it seems he may be right. This week Helen Clark, New Zealand’s Prime Minister joined a rapidly growing but exclusive club, the penny has obviously dropped – she openly admitted the real reasons behind high oil prices, “because we're probably not too far short of peak production, if we're not already there” [1].
This watershed statement, which incidentally went over the heads of most of the media turkeys in attendance, has enormous economic and social implications. Firstly it absolves Trevor Mallard (acting Minister of Energy) from having to regurgitate International Energy Agency nonsense that Peak Oil is at least 30 years away. “Not too far short of peak production, if not already there” surely can’t mean the same thing as 30 years away. The minister can now base policy in geological reality rather than the flawed economic “business as usual” fantasy that has cheap abundant oil production growing alongside the economy for all eternity.
But will he? Will she?
I can already hear the screams of the damned led by Peter Dunne, all the way down every double-laned highway in the country. By this very admission the Prime Minister puts the Government in a very sticky situation. If indeed we are already at peak oil multi-billion dollar roading projects are about as sensible as New Zealand developing it’s own uranium enrichment program. But New Zealand is obsessed with the “growth” dilemma. Economic growth necessarily depends on a cheap energy subsidy, to grow economically one needs to increase energy consumption. As the price of oil continues to creep upwards the spectre of oil-shock induced stagflation looms. The economy is already stagnant. Interest rates are relatively high and inflation is expected to run at over 3% this year. Expect the ride to become somewhat bumpy over the next couple of years.
In light of Prime Minister Helen Clarks peak oil admission the concept of growth must be re-evaluated. Economic growth and oil production exhibit a linear relationship. As we enter the era of oil decline, Jim Kunstler argues the only growth we are likely to see is “growth in our exertions to stay where we are, and the truth is many of the weak will simply fall behind” [2].
If Helen Clark truly comprehends peak oil then momentous changes in public policy must follow, not to mitigate risk in light of such information incurs liability and, is arguably negligent.
The Clark led Government must start immediately with the recognition that we have adopted (and continue to develop at breakneck speeds) a suburban living arrangement for which the outlook is truly bleak. The public can no longer get what the public wants, the required message will not be popular.
Continuing to pump billions into roading projects, ultimately dependant upon the continued stream of cheap Middle Eastern oil after the Prime Ministers admission is moronic. With less oil being produced every year and as the price of petrol moves beyond Himalayan like territory, Transmission Gully (just picking one example), begins to look like a very expensive white elephant – a monument to the exuberant industrial age when there was always more of everything.
[1](2006) PM Talks Palestinian Aid, Health 'N' (Peak) Oil, Tuesday, 18 April 2006, 5:53 pm , Article: Scoop Audio., http://www.scoop.co.nz/stories/HL0604/S00206.htm
[2] Kunstler, J. (2006) April 3, Clusterfuck Nation Chronicles: Commentary on the Flux of Events., http://www.kunstler.com
[The US is covertly trying harder and harder to materialize the civil war that it really wants. Yes, this is a nasty development. No, it does not mean that Iraq is in a full-fledged civil war as yet. Highly-charged headlines do not a civil war make. This “cookie-cutter” balkanization plan is familiar to any journalist, politician, or military figure over the age of 35. While US covert operations may be fomenting some of these really nasty attacks, we have seen little evidence yet (and I must emphasize “yet”) that the overall US plan is actually succeeding. Time will tell. For now, all we see is continuing mayhem that the western press continues to define as the “brink” of civil war. They’ve been doing that since January and we have yet to see that promise fulfilled.
In the meantime, the US continues to build massive and permanent military bases and has just started construction of the largest and most secure embassy complex outside of the US. All of that to watch over about 95 billion barrels of crude that are in the ground in the Kurdish north and the Shia southeast. – MCR]
Baghdad street battle smacks of open civil war
by Omar al-Ibadi
Reuters
Baghdad
Tuesday, Apr 18, 2006
http://www.truthout.org/docs_2006/041806R.shtml
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.
Snipers held rooftop positions as masked Sunni Arab insurgents said they were gearing up for another open street battle with pro-government Shi'ite militiamen in Baghdad's Adhamiya district on Tuesday.
The Arab Sunni stronghold is still feeling ripples from overnight clashes on Monday that appeared to be the closest yet to all-out sectarian fighting.
It's a reality that has Washington scrambling to avert civil war as Iraqi politicians struggle to form a government four months after parliamentary elections.
A U.S. military spokesman said 50 insurgents attacked Iraqi forces in the middle of the night in a seven-hour battle that killed five rebels and wounded an Iraqi soldier.
Fighting was so fierce that U.S. reinforcements were brought in to the northern district, home to some of Iraq's most hardcore Sunni guerrillas and the Abu Hanifa mosque, near where Saddam Hussein was last seen in public before going into hiding.
Sporadic fighting continued on Tuesday.
"There are six people among our dead and wounded. Just half an hour ago a sniper killed Ali," said Mohammad, a 28-year-old Adhamiya resident, of his friend.
While the February bombing of a Shi'ite shrine pushed Iraq to the edge of civil war and left hundreds of bodies with bullet holes and torture marks on the streets, the scenario in Adhamiya is more alarming, despite fewer casualties.
It appeared to be the first example of a large-scale, open sectarian street battle in the capital, if not all of Iraq.
The boldness of the attack was a stark reminder of the security nightmare that will challenge the new government, which will face a Sunni insurgency that has killed many thousands of Shi'ite security forces and civilians.
"Today at noon a group of army soldiers came near the Abu Hanifa mosque and a sniper went on top of the roof. We managed to kill him with a grenade. I destroyed three of their vehicles with roadside bombs," said another rebel.
Insurgents setting up barricades said they saw Shi'ite fighters calling themselves The Army of Haidar closing in on the Abu Hanifa mosque from three directions.
DEATH SQUADS
"We expect them to come back again," said a man who only identified himself as Abu Bakr and said he was a former army officer under Saddam.
His description of the events of Monday night were even more dramatic than the U.S. military account.
"We saw about 100 to 150 men show up in cars. Some were wearing military uniforms and others were in civilian clothes," he said, as five gunmen stood guard over one of the main roads leading into Adhamiya.
Sunni leaders have accused the Shi'ite-led government of sanctioning militia death squads, a charge it denies.
"What happened in Adhamiya is an evil act by an armed militia backed by security and government operatives," Dhafer al-Ani, a member of the biggest Sunni Alliance, told a news conference.
As Abu Bakr and his men geared up for a new fight, the Sunni town of Ramadi, 110 km (68 miles) west of Baghdad, was recovering from the latest rebel assault.
The U.S. military said marines repelled insurgent attacks at several locations in central Ramadi on Monday, including the local government centre, which often comes under fire.
The multiple suicide car bombs, mortars, rocket-propelled grenades and heavy machine guns appeared to be closely coordinated, said the military.
On Tuesday, residents said they kept their children home because insurgents ordered schools closed. Streets were mostly empty.
Washington hopes training will improve the performance of Iraqi forces and enable U.S. troops to start heading home.
But as the confusing Adhamiya fighting illustrated, it's hard to tell who is wearing Iraqi military uniforms, complicating the task of stabilising the country.
Ahmadinejad: Oil Price Is Lower Than Value
by Nasser Karimi
Associated Press Tehran, Iran
Thursday, April 20, 2006
http://news.yahoo.com/s/ap/20060420/ap_on_re_mi_ea/iran_oil
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.
Wading into oil politics for the first time, Iran's hard-line president said Wednesday that crude oil prices -- now at record levels -- still are below their true value.
In statements likely to rattle world oil markets, President Mahmou Ahmadinejad also said developed countries, not producing countries like Iran, are benefiting the most from the current high prices.
"The global oil price has not reached its real value yet. The products derived from crude oil are sold at prices dozens of times higher than those charged by oil-producing countries," state-run Tehran radio quoted Ahmadinejad as saying.
"The developed nations are the biggest beneficiary of the added value of oil products," he said.
The president, who is embroiled with the West and the United Nations over Tehran's nuclear program, stopped short of saying Iran would use oil as a weapon, a tactic much feared by his antagonists on the nuclear issue. Nor did he say what oil prices should be.
Oil prices leapt above $72 a barrel Wednesday, settling at a record high for the third straight day.
"The products derived from crude oil cost over 10 times the price of oil sold by producing states. Developed and powerful countries benefit more from its value added than any party," Ahmadinejad said.
Oil prices should be determined on the basis of market supply and demand, the Iranian leader said.
"Oil is the major asset of nations possessing it. Its price should not be lowered on the pretext that it will prove harmful to developing states, thus permitting the world powers to benefit the most from it," he said.
George Orwel, an analyst at the New York-based Petroleum Intelligence Weekly, said he thought Ahmadinejad was playing the oil card to resist pressure over Iran's nuclear program.
"They are using the oil as a political football. Every time there's an issue with Iran, the oil market freaks out," he said in a telephone interview.
Earlier this week, as oil prices pushed above $70 a barrel, ABN Amro broker Lee Fader said the trigger was heightened fear about U.S. military action against Iran, which has said it would go ahead with plans to enrich uranium in defiance of the United States, Europe and the U.N. nuclear agency.
Iran says its nuclear ambitions are peaceful, but the West fears it is intent on arming itself with nuclear weapons.
If the United States were to attack Iran, Tehran might try to cripple the world economy by putting a stranglehold on the oil that moves through the Strait of Hormuz -- a narrow, strategically important waterway running to Iran's south.
While discounting Ahmadinejad's seriousness in his Wednesday comments about the value of oil, Orwel conceded that the oil industry could not do without the 2.5 million barrels that Iran exports daily.
"Ahmadinejad is trying to show his muscle so that the Bush administration can realize the consequences on the oil market of further confrontation with Iran," Orwel said, adding that he fully expected Iran to threaten to cut off oil if the confrontation with the West continued.
While Ahmadinejad did not say he would use oil as a weapon in his dispute with the West, Interior Minister Mostafa Pourmohammadi said last month the oil card was in play.
"If (they) politicize our nuclear case, we will use any means. We are rich in energy resources. We have control over the biggest and the most sensitive energy route of the world," he said, referring to the Straits of Hormuz.
In keeping with Iranian leaders' tendency of late to contradict themselves, Foreign Minister Manouchehr Mottaki later denied Iran would adopt such a policy.
Iran is the world's fourth-largest oil-producing country and the second in OPEC.
Ahmadinejad urged oil-producing countries -- within and outside the Organization of Petroleum Exporting Countries -- to establish a fund to help alleviate the pressure resulting from high oil prices on Third World nations.
Oppenheimer & Co. oil analyst Fadel Gheit said he considered it unlikely that Iran had any intention of cutting off its oil, the lifeline of its economy.
Gheit noted, however, that there was some truth in Ahmadinejad's comment on developed countries benefiting most from increased oil prices, though the statement would likely be seen as an attempt at "fanning the flames" of a red-hot oil market.
"What he's saying makes a lot of sense. Unfortunately, the source of the comment is going to send jitters in the market," Gheit said.
"The street value (of oil) is triple what OPEC is making," Gheit added, referring to the value of a barrel of gasoline versus the value of a barrel of oil.
Gheit estimated that in London, where the retail price of gasoline is about $6 a gallon, about $150 worth of gasoline can be made and sold from every $50 barrel of oil.
"That is why Exxon Mobil and all the rest make so much money," he said.
[Commodities. Commodities. Commodities. It’s not just oil, it’s everything. And few in the Peak Oil movement have fully appreciated the potential for cascading dominoes that might trigger or exacerbate collapse. It’s not just about measuring how much energy will or won’t be available. It’s about looking far enough ahead to recognize the things that might lead to additional breakdowns in this super-complex and interwoven human civilization. – MCR]
Big Tires in Short Supply
by Simon Romero
New York Times
Houston
Thursday, April 20, 2006
http://www.nytimes.com/2006/04/20/business/20tire.html?_r=1&oref=slogin
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 worldwide thirst for stuff from the ground —materials as diverse as copper and coal, gold and oil — has set off a stunning boom in just about every commodity market. But there is one item that lately has dealers in the global mining industry really scrambling: the super size tire.
Mining companies are complaining about a shortfall in the supply of the giant tires that go on large dump trucks and other heavy equipment. These out size tires stand as tall as 12 feet tall and can spread 4 feet wide.
They are used prominently everywhere from the Canadian tar sands to open-air coal mines in the United States and China, but lately they have become almost as precious as gold and silver: prices have quadrupled for some of them in the last year to more than $40,000 a tire.
"This has never happened in the 35 years I've been in this business," said Michael Hickman, 63, who, together with his son, owns H & H Industries in Oak Hill, Ohio, one of the nation's largest retreaders of used mining tires.
"Right now the entire mining industry is going berserk, and we're feeding into it," said Mr. Hickman, whose company has tripled its work force to 160 in the last two years.
There are several reasons for the tire shortage. Demand is soaring, with greater needs by the military for the wars in Iraq and Afghanistan and by construction firms rebuilding the hurricane-ravaged Gulf Coast.
But mining companies and tire manufacturers say the biggest reason is the rapid industrialization of China, India and other developing countries, which is expanding the appetite for basic commodities.
The outsize tires have historically been a specialty business, so there was rarely an abundance of production capacity. Making a large tire requires a curing process in which the tire is cooled in a mold, and that can take as long as 24 hours. Factories normally produce just two to three large tires a day.
And with existing factories already running flat out, there is little hope for much increase in the supply of new tires anytime soon. At Michelin, the French tire company, its large-tire manufacturing plants have been "saturated," according to Prashant Prabhu, its president for earthmover tires. He said all of the plants were operating at full capacity 24 hours a day, or near that level in countries where labor laws restricted flat-out production.
"Our customers are very upset," Mr. Prabhu said. "We cannot accommodate them at the rate they want."
Michelin, together with Goodyear of Akron, Ohio, and Bridgestone and Yokohama, both of Japan, rank among the largest manufacturers of heavy tires.
In many ways, the tire shortage both reflects the soaring commodities prices and contributes to it. The price of copper, which is used in electrical wiring and pipes, has climbed 45 percent this year, closing at $2.9595 a pound on Wednesday. Nickel, used to make stainless steel, is up 37 percent during the same period, while gold is up 23 percent and zinc is up 65 percent.
In an attempt to cash in on the commodities rally, mining companies have been reactivating old mines and expanding existing operations. But time and again, these firms have been stymied by a lack of available tires.
Some companies have been forced to idle their heavy equipment or alert investors of the impact of the tire shortage. For instance, Fording, one of Canada's largest coal producers, has repeatedly warned in recent months that the tire shortage could reduce its coal output. Production capacity at its mines in British Columbia and Alberta is 28 million tons a year, but output this year could fall to less than 25 million tons, company said.
Some newsletters in the mining and construction industries have speculated about the possibility of a black market or even outright thievery of heavy tires, but such talk appears premature. In the meantime, salvage firms are doing a thriving business in discarded tires and companies that retread tires are struggling to keep pace with demand, with used tires in some cases fetching higher prices than new tires.
Michelin is investing $85 million to expand its tire factory in Lexington, S.C., a move that will eventually expand production there by 50 percent. It is also building a new $550 million plant in Campo Grande, Brazil.
These moves and plant expansions by other tire manufacturers, however, will do little to ease the tire shortage until late 2008 or thereafter. The heavy equipment used to make the tires is relatively difficult to procure, which means that the earliest any new plants could be operating is more than two years from now.
Tire manufacturers were largely caught off guard by the surge in demand for heavy tires, which began to heat up in 2004 after several flat years in the industry. The largest companies say they have been hesitant to increase prices by larger amounts — despite pleas from some mining companies for tires at almost any price — out of concern for angering long-time customers.
Tire companies complain they are also squeezed by rising prices for raw materials, with natural rubber prices rising nearly six fold, to about $2 a pound since 2002, the last weak period for heavy tire sales. High crude oil and natural gas prices are also adding a burden to tire companies, which use petroleum in large amounts to produce the carbon black needed for tire carcasses and threads.
"The larger the tire, the more difficult it is to source," said Shawn Rasey, executive sales director for off-the-road tires at Bridgestone North America. "I don't see the shockwave of demand peaking until 2009 or 2010."
Faced with such tight tire supplies, mining companies are doing everything they can to extend the life of their tires, which typically are made to last from 4,000 to 7,000 hours.
Phelps Dodge, the Phoenix-based company that produces commodities like copper and molybdenum, carefully monitors its trucks and heavy equipment to achieve the optimum life for its tires. This is especially important in the Arizona heat, according to Kenneth Vaughn, a spokesman, who explained how Phelps is even using truck simulators at its mines to train drivers in "hazard avoidance" techniques, like gently avoiding rocks on the road.
Some companies go even further, laying down a plastic covering, called geo-textile, on moist roads to provide a smoother ride. Newmont Mining of Denver has done that at its gold mines in Nevada, Indonesia and Peru, said Lee Krugerud, vice president of North American business affairs at Newmont.
Mr. Krugerud said Newmont has also been scouring other countries in an attempt to find alternate supplies of tires. Executives visited Belarus, where they found a manufacturer that still produces large, old-style "bias-ply" tires, which are less durable than the more popular radial tires. "We need to have a safety option, even though those tires won't last as long," said Mr. Krugerud. "The other option, parking our trucks, is not something we want to do."
Given the stress the commodities boom has unexpectedly created in an arcane area of the mining supply chain, some experts suggest that the tire shortage may keep prices higher longer than expected by limiting the ability of mining companies to meet the explosive demand for their products. But in the end, they say, there is little to worry about.
"This tire issue is, I believe, more a symptom of the mining industry's strength than its weakness," said Tibor Rozgonyi, head of the mining engineering department at the Colorado School of Mines. "It may be an acute concern at this moment, but the market has a way of taking care of these imbalances."
|
Chavez: Oil Will Be Destroyed if Attacked