Tractors delivered to Venezuelans

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Buenos Aires, Dec 2 - The first consignment of tractors called "Ven-Iran" jointly produced in Venezuela were delivered to farmers in a ceremony attended by President Hugo Chavez in Bolivar on Thursday.

Iranian ambassador to Caracas Ahmad Sobhani and several senior Venezuelan officials and MPs including ministers of agriculture, infrastructure, energy and mines and housing were present in the ceremony.

Some 400 tractors were delivered to farmers in the ceremony and President Chavez drove one of them for several minutes.

Several thousand people in the city of Bolivar took part in a parade when the president stood to review them along with 100 tractors decorated with national flags of Iran and Venezuela.

Buenos Aires, Dec 3 - Visiting Iranian Minister of Industries and Mines Alireza Tahmasebi has put forward a proposal to the Venezuelan official to set up joint bank branches.

In the third meeting of Iran-Venezuela joint economic commission, Tahmasebi also called for meetings of the kind every six months.

Given to the bilateral economic activities, the minister said in addition to the construction of cement plant and a plant for assembling tractors and cars, Tehran and Venezuela have started some projects such as production of flour, dairy products and plastic spare parts of cars.

Caracas , Dec 3 - Venezuelan President Hugo Chavez announced late Friday that he plans to visit Iran early next year to bolster the fight against imperialism, US hegemonic pretensions status.

Chavez said his government rejects the US aggression toward Iran over its nuclear program.

Today we can say that Iran and Venezuela, the Iranian revolution and the Venezuelan revolution, are brothers; we have achieved it. And that brotherhood hopes for a world of equals, Chavez said.

[Another sign of a booming economy and a rosy future. This is shameful. – MCR]

PRESTONSBURG, Kentucky (AP) -- Dottie Neeley, 87, was fingerprinted, photographed and thrown in jail, imprisoned as much by the tubing from her oxygen tank as by the concrete and steel around her.

The woman -- who spent two days in jail after her arrest last December -- is among a growing number of Kentucky senior citizens charged in a crackdown on a crime authorities say is rampant in Appalachia: Elderly people are reselling their painkillers and other medications to addicts.

"When a person is on Social Security, drawing $500 a month, and they can sell their pain pills for $10 apiece, they'll take half of them for themselves and sell the other half to pay their electric bills or buy groceries," Floyd County jailer Roger Webb said.

Since April 2004, Operation UNITE, a Kentucky anti-drug task force created largely in response to rampant abuse of the powerful and sometimes lethal painkiller OxyContin, has charged more than 40 people 60 or older with selling primarily prescription drugs in the mountains.

"It used to be a rare occasion to have an elderly inmate," Webb said. "Five years ago it was a rarity."

Local jails are having to bear the increased cost of caring for old and often sickly inmates.

"You've got to give them more attention," Webb said. "It's putting a strain on my deputies. We're understaffed anyway. You've got to get them doctors, and meet their medical needs."

Elderly people "may be looking for a way to bring in a little extra money," said Erin Artigiani, deputy director of the University of Maryland Center for Substance Abuse Research. "We haven't heard a lot about senior citizens being a source of those drugs. We know college students do this. It's not much of a stretch to think that seniors could do it, too."

Dr. Anita Cornett, a physician in Hyden, said one of her patients, a reformed drug addict, told her that he bought all his drugs not from a known dealer, but from elderly people.

Cornett said she does random drug screenings to make sure her patients are taking their prescription drugs instead of selling them. In addition, staffers routinely call patients and ask them to bring their prescription bottles in so that the pills can be counted.

The Rev. Doug Abner, pastor of Community Church in Manchester and an anti-drug activist, said senior citizens may not understand the seriousness of selling prescription drugs.

"They justify it because they're having a hard time financially," he said. "Left to ourselves, we can justify anything, but they're really part of the problem."

However, Dan Smoot, a former state police drug detective who heads the task force, said the elderly people being charged are not necessarily struggling to put food on the table.

"Most of the elderly we arrest are merely continuing a family tradition," he said. "It has been part of their culture for a long time."

Neeley, the old woman who was arrested along with her son and his girlfriend, faces up to 10 years in prison if convicted of trafficking in prescription drugs as well as marijuana.

However, a prosecutor has agreed not to oppose "shock probation" if Neeley enters a guilty plea at her next court appearance, December 29. Under shock probation, a defendant who is unlikely to repeat the crime is released after getting a brief taste of life behind bars.

Her attorney, Terry Jacobs, said the plea bargain would be a gamble, because the judge could decide not to grant her shock probation, and "six months is a death sentence for her."

In a telephone interview, Neeley denied selling drugs. She said she suffers from emphysema and asthma and sometimes uses a wheelchair. She said she was shocked when police arrived to arrest her and made the 4-foot 8-inch, 120-pound woman walk from her house to a cruiser.

"I had to hold my hands up all the way," she said. "They wouldn't let me hold them down."

Her lawyer declined to discuss specifics of the charges. But speaking generally, he said: "You've got a depressed economy. You've got an opportunity for these folks to make money. If you're seeing a disproportionate number of elderly, it's because they are the people who are going to be prescribed most of the drugs."

The press headlines for this story — US Govt. slashes 2025 forecast for OPEC production by 11 million barrels per day — focus on the increased long term forecast for the price of oil (which many will regard as still too optimistic), but the real news is that the EIA has downgraded its long term forecast of production for 2025 from OPEC by 11 million bpd : " OPEC production is now likely to be about 11 million barrels a day less than what the EIA projected in its 2005 report. " (Associated Press).

To put this in perspective, this is more than the whole of current Saudi production (9.5million per day).

There is some reference in the report to 'lack of investment', but if this is the reason for the poor outlook, the report does not go on to explain why this might be the case in an environment of high oil prices.

Some might say that OPEC wants to keep the oil price high; others that there is a shortage of manpower and equipment; others that OPEC knows the oil isn't there in the first place.

Whichever it is, the outcome is the same: less oil available going forward than had previously been assumed.

The net result is that global production/consumption between now and 2025 will not exceed 111 mbpd according to the EIA (a couple of years ago in its 2004 International Energy Outlook the EIA forecast a total global production capacity of 126 mbpd by 2025), although it also forecasts 118 by 2030 (compare this with Peak Oil 'pessimists' who tend to be in the range of 90 - 100 for maximum production somewhere between 2010 and 2020).

This may explain US Energy Secretary Bodman's comments during November when he made a tour of Gulf states to discuss forward investment. His visit coincided with the announcement by the Kuwaitis that their Burgan field (the second largest field in the world) has peaked prematurely both in time and quantity. During the trip Bodman said " We will use Saudi Arabian oil for some time to come. But the goal is to recognize that at some point in time ... we will have to recognize that oil and natural gas, we will run out of it in the world. So we must make plans for it. " CNN, 12 November 2005

It seems the only way the forecasters can now deal with this situation is to trim their figures for future oil demand (which is what PFC said would be necessary back in September 2004). EIA oil consumption growth forecasts therefore now seem to have been cut from 1.9% pa down to 1.4%. Basically this is a 'demand destruction' scenario driven by tightening supply/demand imbalances pushing up prices and in turn reducing consumption.

Surprisingly, the new EIA report forecasts an increase in non-OPEC oil production “ from 52 million barrels per day in 2004 to 67 million in 2025, as compared with the AEO2005 reference case projection of 65 million barrels per day .” This is despite the fact that the IEA (in Paris) confirmed earlier this year that non-OPEC conventional production would peak just after 2010. I assume therefore that some of the difference is to be supplied by 'non-conventional' oil in non-OPEC countries (that is likely to have adverse implications for global warming if it ends up coming from tar sands and oil shales, although these are not referred to directly in the EIA report. It does refer to ethanol, biodiesel, and coal to liquids - I assume the latter may also have an adverse CO2 profile like tar sands and shale although I don't know much about it).

Total global non-conventional oil production is shown by the EIA as increasing from 2.49 million barrels per day in 2004 to 9.25 in 2025, with most coming from 'Other North America' (presumably Canadian tar sands), Asia (China and India?), and South and Central America (presumably Venezuelan heavy oil).

The EIA report also predicts that this situation will put additional pressure on international gas markets including through increased demand for 'gas to liquid' production.

On the subject of gas the Times has this report today: “The soaring price of natural gas in the United States has sparked merger talks between ConocoPhillips, the third-largest US energy company, and Burlington Resources, a leading producer of gas in the US and Canada.... Gas is an increasingly popular fuel in the US, but traditional onshore supplies are dwindling and the country has failed to invest in the pipeline and liquefied gas infrastructure needed to import more of the fuel.... The exceptional US gas price has even affected the UK this winter, drawing cargoes of liquefied natural gas away from Britain's new LNG terminal. The new terminal has remained almost unused despite strong demand for gas and a soaring UK price ."

Meanwhile somehow losing 11 million bpd of forward OPEC production doesn't seem to have made the front pages!

From Annual Energy Outlook 2006 with Projections to 2030 (Early Release) - Overview

"The Energy Information Administration (EIA), in preparing projections for the Annual Energy Outlook 2006 (AEO2006), evaluated a wide range of trends and issues that could have major implications for U.S.energy markets between today and 2030. AEO2006 is the first edition of the Annual Energy Outlook (AEO) to provide projections through 2030.... In preparing AEO2006, EIA reevaluated its prior expectations about world oil prices in light of the current circumstances in oil markets. Since 2000, world oil prices have risen sharply as supply has tightened, first as a result of strong demand growth in developing economies such as China and later as a result of supply constraints resulting from disruptions and inadequate investment to meet demand growth.

As a result of this review, the AEO2006 reference case includes much higher world oil prices than were projected in AEO2005. In the AEO2006 reference case, world crude oil prices, which are now expressed in terms of the average price of imported low-sulfur crude oil to U.S. refiners, are projected to increase from $40.49 per barrel (2004 dollars) in 2004 to $54.08 per barrel in 2025 (about $21 per barrel higher than the projected 2025 price in AEO2005) and to $56.97 per barrel in 2030... The prices in the AEO2006 reference case reflect a shift in EIA's thinking about long-term trends in oil markets. World oil markets have been extremely volatile for the past several years, and EIA now believes that the price path in AEO2005 did not fully reflect the causes of that volatility and the implications for long-term average oil prices.

In the AEO2006 reference case, the combined production capacity of members of the Organization of the Petroleum Exporting Countries (OPEC) does not increase as much as previously projected, and consequently world oil supplies are assumed to remain tight. The United States and emerging Asia-notably, China- are expected to lead the increase in demand for world oil supplies, keepingpressure on prices though 2030. In the AEO2006 reference case, world petroleum demand is projected to increase from about 82 million barrels per day in 2004 to 111 million barrels per day in 2025. The additional demand is expected to be met by increased oil production from both OPEC and non-OPEC nations. In AEO2005, world petroleum demand was projected to reach a higher level of 121 million barrels per day in 2025.

The AEO2006 reference case projects OPEC oil production of 44 million barrels per day in 2025, 44 percent higher than the 31million barrels per day produced in 2004. In the AEO-2005 reference case, OPEC production was projected to reach 55 million barrels per day in 2025, more than 11 million barrels per day higher than in the AEO- 2006 reference case . In the AEO2006 reference case, non-OPEC oil production increases from 52 million barrels per day in 2004 to 67 million in 2025, as compared with the AEO2005 reference case projection of 65 million barrels per day."

Gov't report: $50-plus oil here to stay

WASHINGTON - Oil prices are projected to remain well above $50 a barrel for years to come, resulting in a greater shift to more fuel efficient cars and alternative energy sources, according to an analysis released Monday by the Energy Department.

The analysis reflected a sharp change from the department's projections a year ago when it predicted oil prices in constant dollars - not counting normal inflation - would decline to $31 a barrel by 2025.

The report, issued Monday by the department's Energy Information Administration, now projects oil will cost an average $54 a barrel in 2025 and $57 a barrel in 2030 before inflation. Currently, crude oil prices have been hovering around $60 a barrel, briefly soaring as high as $70 earlier this year.

The EIA report, however, projected that natural gas prices, which have soared to more than $14 per thousand cubic feet in recent weeks, would retreat and return to below $5 a thousand cubic feet in the years ahead. It projected a likely price of $4.46 per thousand cubic feet in 2016 as demand for the fuel eases and supplies increase.

But the agency said domestic gas production even as far out as 2025 is expected to be slightly less than projected a year ago, because of the long-term impact from Hurricanes Katrina and Rita. The hurricanes shut down Gulf of Mexico gas production and full operation is not expected until next summer. The impact of the hurricanes is "expected to delay offshore drilling projects because of a lack of rigs and ... have a long-term effect on production levels," said the report.

The agency said it added about $21 to the future price of a barrel of crude because it does not expect OPEC oil producers to pump as much as oil as previously projected. Consequently, world oil supplies are presumed to remain tight over the next several decades.

Global oil demand, currently about 82 million barrels a day, is projected to grow to 111 million barrels a day by 2025, according to the EIA report. It said OPEC production is now likely to be about 11 million barrels a day less than what the EIA projected in its 2005 report.

With high oil prices a long-term fixture, there will be more domestic crude oil production, increased demand for unconventional transportation fuels such as ethanol and biodiesel and greater use of more fuel efficient hybrid gasoline-electric cars and trucks, the EIA said.

_Scaled back the expected growth of liquefied natural gas imports into the United States . It said an increase of worldwide demand for LNG will reduce the amount coming into U.S. facilities.

_Projected a 9 percent growth in electricity production from nuclear power plants with a half-dozen new reactors likely to be built some time after 2014. Last year's report said no new reactors were on the horizon.

_Said that coal would remain the primary fuel for producing electricity through 2030.

_Predicted that despite higher oil costs and some increases in efficiency, U.S. energy demand would increase by 1.1 percent a year between now and 2030.

_Forecast that heat-trapping carbon dioxide releases into the atmosphere from burning fossil fuels will increase an average of 1.2 percent a year and reach 7,587 million metric tons by 2025, a 28 percent increase over the amount released in 2004.

Carbon dioxide is the leading so-called "greenhouse" gas that many scientists believe will cause a significant warming of the earth over the next century if atmospheric concentrations continue to increase.

The Organisation of the Petroleum Exporting Countries, the cartel that controls 40 per cent of world oil exports, will on Saturday lift a four-decade veil of secrecy and begin regularly to reveal how much oil it is actually pumping.

China and India, the fastest growing major oil consumers, will also supply consumption and storage data for the first time.

The Joint Oil Data Initiative (Jodi), which will be launched on Saturday in Riyadh by energy and finance ministers of the biggest oil producing and consuming countries, will meet a persistent demand of the Group of seven industrialised countries for more transparent energy data.

The price rise of the past three years, which this year saw oil hit nominal highs of $70.85 a barrel, could in part have been avoided by better data, analysts said. It would provide a more accurate basis for industry investment decisions, which in turn help determine long term supplies.

But analysts also suggested that the new database was unlikely to transform the currently unscientific art of guessing world demand and supply into a simple task.

One person close to Saturday's event said that the data would reveal little difference to existing output estimates for some countries including Saudi Arabia, the world's biggest oil producer but would show a five to 10 per cent disparity in the production levels of other Opec countries.

[The Caspian was a bust. ANWR is tiny. Deepwater is reaching its limits. The North Sea is well past its peak. Cantarell and Burgan have peaked. Ghawar is in trouble. And the tar sands are like a festering sore on the biosphere, manageable in money terms but self-defeating in terms of natural gas, freshwater, and environmental degradation. Now we’re told we need another Iraq, but there is no other Iraq to be had. What can we do? Well, with our hands, let’s grow local food; with our legs, let’s ride bicycles; with our ears and mouths, let’s meet our neighbors and arrange for reciprocity; with our arms, let’s picket military recruitment centers; with our heads, let’s plan for a life without Big Energy; and in our hearts, let’s hope bird flu is bullshit, let’s hope Israel isn’t serious about attacking Iran in March, and let’s hope Saudi Arabia doesn’t split into a Holy western coast and a bloody eastern one in which China and the U.S. light up the night with a proxy war. Happy Holidays. –JAH]

Goldman analysts disagree with theory that prices peaked in '05; see five more years of price hikes.

LONDON (Reuters) - Already sky-high oil prices have entered a "super spike" phase that could last for four more years as global demand booms and supply growth slows, Goldman Sachs analysts said Tuesday.

"We disagree with what appears to be a growing consensus that crude oil prices reached their peak levels earlier in 2005," said the firm's Global Investment Research.

The analysts said oil demand remained resilient and supply growth lackluster, prompting them to keep their average U.S. crude price forecast for next year unchanged at $68 a barrel.

Oil futures on the New York Mercantile Exchange have averaged $56.59 so far this year.

The group also predicted oil prices could see 1970s-style price surges to as high as $105 a barrel during this period.

"With WTI oil prices on-track to average about $57 a barrel in 2005, we think the past phase will be remembered as the first of what could be a four-to-five-year 'super-spike' phase," their report said.

Goldman Sachs first mentioned a super-spike phase in March, five months before U.S. oil prices skyrocketed to a record $70.85 a barrel. Prices have since eased.

The bank expressed doubt that OPEC producers, which supply a third of the world's crude, would be able to quench booming demand.

"It is the seeming insurmountable challenge of OPEC's needing to add real new capacity on a just-in-time basis that gives us so much confidence that we are in the super-spike phase," it said.

OPEC, which has been pumping at the highest rate for 25 years, is set to boost its spare capacity to 3.1 million bpd by the end of the 2006.

Despite hurricanes, high fuel prices and increased conservation, energy consumption in the United States remains strong, as does China and India, the bank said.

"Ultimately, we agree that the energy bull market will roll over once demand destruction really begins," it said. "We simply do not believe we have arrived at that point."

The International Energy Agency, the West's energy watchdog, estimated world oil demand could grow at an average of 1.8 million to 2.0 million barrels per day through 2010. Last year's demand growth of 3 million bpd was the highest for a generation.