"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Tuesday, January 01, 2008

Year end thoughts on energy, food and the Presidential hopeful and hopeless

Low oil prices at the start of the year eased fears of an energy crisis. With the dollar rallying, WTI would eventually sink below $50 per barrel. But world oil production wasn't growing and the performance of some producing regions were showing concerning signs. Mexico was clearly suffering from Cantarell's decline, the Caucasus kept raising question marks (a situation later updated here) and there are also major comcerns over Saudi Arabian production figures.... Don;t expect any reduction in the forthcoming 12 months.

Weary soothsayers will turn again to Mr Hunts Site, Signs of the Economic Apocalypse for a yearly roundup....

"The most striking change of the past year in the markets is the sharp rise in gold (32%) and oil prices (57.5%) and the 11.5% drop in the value of the dollar against the euro. The past year also saw the end of economic optimism in the media as the housing bubble finally burst."

He quotes David Seaton on the FT journo ( and Bilderburg visitor) Martin Wolf

"If we examine what Martin Wolf is saying logically, not even really reading between the lines, this supremely informed man is declaring that he knows that, before they ever pay Scandinavian like income taxes, drive small cars and wear sweaters around the house on cold winter days, the elites of the United States will create a police state and go to war endlessly to dominate the resource rich areas of the world."

It is frightening that these people write (it appears) endlessly about the threat from ex Arkansas Governor Huckabee who is several shed loads short of a full load. He has no chance of the nomination and is unelectable... for more reasons than it is worth enumerating.

As worrying, and something Mr Hunt never touches on is the future cost of food - this, driven by world demand from the emerging economies, droughts, crop failures and the politically inspired drive and publically subsidised rush into fuels from crops will lead, with higher housing costs (rents / mortgages / land) to higher inflation (already concealed by the Fed failing to re cord M3 and plainly juggling the COL indices.

Nothing so far deflects the serried ranks of advisers to Lord Patel from the firm belief that Fred Thompson will be the next President of the United States.

Perhaps looming on the horizon is a worse fear expressed early in the year over world coal supplies for energy by Shaun Chamberlin at the Oil Drum .

The general consensus view on coal supplies has long been that we have hundreds of years of the stuff left, and that oil and gas depletion are the pressing concerns. However, dissenting voices are emerging. Canadian geologist David Hughes recently claimed that "peak coal looks like it's occurred in the Lower 48 (US states)", and the consensus position on coal is also called into serious question by the Coal: Resources and Future Production report soon to be released by the Energy Watch Group in Germany.

For example did you know ...the US has now switched from being a net exporter to a net importer of steam coal and arguing that total (volumetric) US coal production will peak between 2020 and 2030.

Only 15% of coal produced globally is exported, the rest being consumed domestically, Australia is responsible for almost 40% of global coal exports. The UK relies for 65% of it's coal on imports. Read on >>>>>

...which is why there are never less than 50 coalers lined up outside the port Newcsatle in Australia at any time and when there is a storm that disrupts supplies it has global ramifications on supplies, stocks, availability and prices. see previous post

Saturday, June 09, 2007 Chinese Coal carriers grounded off Newcastle,NSW, Australia

More revent

Newcastle Coal Trades Near a Record as Demand Rises (Update1)
Dec. 31 (Bloomberg) -- Coal prices at Australia's Newcastle port, a benchmark for Japan, South Korea and Taiwan, traded near a record on concern that demand is outpacing supply.

Power station coal, excluding shipping cost, for delivery within three months posted its second weekly gain, settling at $89.69 a metric ton in the week ended Dec. 28, according to the globalCOAL NEWC Index, an Asian benchmark calculated each Friday. Prices are up 85 cents from the previous week and near the US$89.76 record set earlier this month (nbspNEWC Index up from US$67.72 in September).

``It's going to be a situation of restricted supply throughout 2008, so that will keep spot prices near record levels,'' said Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management in Sydney. ``The miners just can't get the stuff out and onto a ship.''

The queue of ships waiting outside Newcastle port to load coal reached a record 79 in June after storms disrupted operations. There were 34 vessels waiting to load as of midnight, Dec. 30.

Chinese coal imports rose 39 % to 46.68 million tons in the first 11 months of 2007.

Final Cheering message..

The Paris-based International Energy Agency (IEA ) projcts global energy needs growing 55% between 2005 and 2030, ( annual rate of 1.8%,) with almost half of it in China and India. Despite political;;y based efforts to boost the use of biofuels worldwide, the IEA says fossil fuels will remain the dominant source of primary energy, accounting for 84% of the overall increase in demand between 2005 and 2030. (*See Hillarys crazy energy plans)

Electricity use will nearly double, with most new plants burning coal. (In the UK E.ON is to build the first new UK coal-fired power station since 1974, at Kingsnorth in Kent. RWE Npower wants to follow suit with two more, in Essex and Northumberland; Scottish and Southern Energy will submit plans for a plant near Pontefract. ) Aging and less-productive oil fields and resistance among major oil exporters to build spare oil capacity will make crude oil and natural gas more expensive and prompt developing countries to turn increasingly to coal as fuel.

The IEA also says global oil demand will hit 116 million barrels a day by 2030, up from about 85 million barrels a day now.

Happy New Year


Ekk said...

"... before they ever pay Scandinavian like income taxes, drive small cars and wear sweaters around the house on cold winter days, the elites of the United States will create a police state and go to war endlessly to dominate the resource rich areas of the world."

Afraid to say, from what I see every day, that is so :(.


George Dutton said...


Thanks for the link.

"Sea of Oil"...

Give it time to load (slow)...


"The Return Of A Classic To Fuel Production"...


"Coal to oil conversion"...


Anonymous said...

January 1st 2008 ushered in the 'common market' between the six Gulf Co-operation Council (GCC) countries (UAE, Bahrain, Oman, Qatar, Saudi Arabia & Kuwait).

Kuwait is the only 1 of the 6 which has dropped (in May 2007) the peg to the sinking US Dollar.

Having suffered rampant (imported) inflation due to the weakening dollar, the other 5 were going to drop the US Dollar peg, but probably won't now, as Mr Bin Laden has said that they should.

(C) Very Seriously Disorganised Criminals 2002/3/4/5/6/7/8/9 - copy anything you wish