Forget Ike It's PetroCan's Fault

P.O. about the 13 cent rise in gasoline prices at the pump last Friday. Don't blame hurricane Ike, rather it was exasperated by the shut down of Petrocan here in Edmonton. The plant has been offline since July!

September 15, 2008

Petro-Canada Refinery Shutdown Causes Shortage Petro-Canada, Canada's second- largest refiner, said filling stations in Alberta and British Columbia may run out of fuel after the unexpected shutdown of a unit at its Edmonton, Alberta, refinery. The company is investigating the reason for the closing of the catalytic cracking unit, a gasoline-producing piece of equipment, according to a Bloomberg report. Petro-Canada spokesperson Jon Hamilton said the reduction in gasoline could last several weeks as the company fixes the unit. "It could be short term, it could be a little longer," Hamilton said. "We're looking at, I'd say, weeks not days, right now." Gasoline shortages may occur in parts of British Columbia's so-called interior region and Alberta, Petro-Canada said in a statement. The Calgary-based company said it's trying to boost supplies in Canada's western provinces partly by buying fuel from rivals. Deliveries to some customers and filling stations have been curbed, Hamilton said without providing details. "The deliveries that we're sending out are reduced from what they would normally get,'' he said. "That might mean a smaller load or that might mean less frequent loads." The company intends to import more supplies to its port terminal in Vancouver and truck the fuel to customers, Hamilton said. Petro-Canada also is altering its distribution network across the country to boost supply in western Canada. The equipment failure is unrelated to a C$2.2 billion ($2.07 billion) modification project nearing completion at the plant. Parts of the refinery were scheduled to be shuttered for about two months starting this month so that the plant can run on crude extracted from Alberta's oil sands. Output at the refinery was cut last month because of a water-boiler equipment problem. The plant is capable of processing 135,000 barrels a day. Imperial Oil Ltd. of Calgary is Canada's largest refiner and marketer.

Since Petrocan, Shell and Imperial Oil are the area's main refiners losing Petrocan put pressure on their retail outlets. Of course this should have been predicated. Add to that the shut down of East Coast gasoline due to Ike and you have the perfect storm.

In March, a shut down at Imperial's 187,000-barrel-a-day Strathcona refinery near Edmonton caused gasoline shortages at Esso stations throughout Alberta, Saskatchewan, B.C. and Manitoba.

Around the same time, Shell Canada Ltd. said its Scotford refinery and upgrader near Fort Saskatchewan, Alta., were operating at reduced rates because of unplanned maintenance.

Last year, Ontarians experienced gasoline shortages for several weeks after a fire at Imperial's Nanticoke refinery.

Canada's refining infrastructure is aging, but companies are not keen on investing in new facilities, said Roger McKnight, an energy analyst with Oshawa, Ont.-based consulting firm En-Pro.

Not only would it would take up to 10 years and billions of dollars to build a new refinery, but they would tilt the market against the companies' favour.

"Their refining margins would drop because of excess supply. So there's no incentive at all for them to do that," McKnight said.

Another factor discouraging the industry from spending money on new refineries is uncertainty about government regulations.

"If I was an oil company, I would like to know in 10 years, when I'm going to have this refinery built, what the eventual specs are going to be and what the emission standards are going to be," McKnight said.

As for the solution it is as clear as the nose on Uncle Ed's face, we need more refinery capacity in Alberta and Canada. Of course given the anti regulatory anti-public ownership attitude of Big Oil and its government in Alberta that ain't gonna happen any time soon.


And so we have gasoline shortages on refinery row.

Back in August, it was Petro-Canada. Now, it’s Shell that has run out of gasoline at some of its Alberta stations.

In Medicine Hat, the Shell stations on Dunmore Road and Eighth St. NW have been out of gas since Friday, while the Shell on South Railway had gas as of Monday but wasn’t sure how long its supplies would last. Shell stations on Redcliff Drive SW and Trans-Canada Way were reporting they still have gas.

Jana Masters, spokesperson for Shell Canada, said there are also a couple of stations in Calgary and Edmonton that are running on empty.

“But these are very small numbers compared to our total operations across the province,” she said.

While the Petro-Canada gas shortage in August had to do with a problem at that company’s refinery, Masters said that is not the case at Shell.

“It’s just a temporary challenge keeping up to customer demand,” Masters said.

It is the lack of tertiary refining that causes gasoline shortages in Canada and subsequently price increases. And wqe won't get more refineries built until there is a national initiative to make it so including a Green Plan.

Call it a Green National Energy Program. If you want to end price gouging lets have a made in Canada Energy Plan that includes increased bitumin processing and tertiary refining capacity.

Of course others have solutions too, like importing more dirty gas from the U.S. but that is all refined in Hurricane Alley, and we know what that means. 13 cent price increases in one day.

Petro-Canada said it’s pulling out all the stops to make sure supplies of gasoline keep flowing.

Company officials said on Petro-Canada’s website that it was able to use trucks to ship approximately 200,000 litres of gasoline per day from its Vancouver storage facility last week, but that volume has now more than quadrupled.

That’s been partially accomplished by hiring truckers from Ontario to move more product, Stevens said.

The company is also trying to find rail cars that could be pressed into service to deliver gasoline to destinations in B.C. and Alberta.

The company also is trying to boost its gasoline supplies by looking to its other Canadian refineries and to the United States and overseas, Stevens said.

An industry group that represents independent gasoline retailers is calling for a harmonization of gasoline standards between Canada and the U.S., which would allow for more importation of American products during shortages.

Canadian gasoline has hard caps on sulphur and benzene levels in gasoline, which prevents the importation of the product from the U.S. to ease any shortages, said Dave Collins, a director with the Canadian Independent Petroleum Marketers Association.

"It’s great if you’re a refinery because it blocks competition and helps you keep our prices up," he said in an interview from Halifax.

"But it’s not good for consumers and, at times like this, it’s not good for our operations either because we can’t get any gas," he said.

The federal government’s failure to ease importation restrictions means such shortages will likely happen again, Collins said.

Of course the solution is not unrestricted trade with the U.S. for dirty gas, rather the solution was in hand until the Liberals under Paul Martin sold off the last of Canadians taxpayers shareholdings in Petrocan.There is a solution to price gouging, that is worker and community control of the refineries.


SEE:

It's Time to Take Back Our Oil and Gas

NDP And Workers Control

Nationalize the Oil Industry

The Myth of the NEP

Aren't you sorry you sold your shares

Find blog posts, photos, events and more off-site about:
royalties, oil, profits,
Bill Hunter, Alberta Royalty Review,
Alberta Cabinet, CAPP, Ed Stelmach,
Big Oil,oil royalties, PC, Calgary, Party of Calgary, politics, NEP, Conservatives, Fort McMurray, One Party State,
Parkland Insititute, Encana, Nationalize, Nationalization, Workers Control, public ownership, Petro Canada, Anarchism, NEP, Self-Management

Oil Speculation

The reason for the gas gouging at the pump. Speculation in the oil market.

Algerian Energy Minister: shortage of oil supply does not cause prices rise According to him, doubts are surrounding oil markets; which has been used by speculators to raise the prices.


Oil mergers forcing prices up: study

Oil rises ahead of US inventory data

Oil Prices Rise After Inventory Report

Oil rises as warships enter Gulf

BP leak reduces Alaskan oil flow

Oil, gasoline futures end higher; traders weigh supply risk



ags:

gasoline, gas gouging, gas prices, big oil, petrochemical, refinery,

Gas Gouging

Gas gouging is here again. The reason of course is that it is spring. And prices rise in the spring just like dandelions.

PILGRIM: Now, this spring, gas price is an annual event. In 22 of the last 23 years, prices have risen some time after March 15th and go up until about mid-May.

The Center for Policy Alternatives reports that Canadians are paying as much as 27 cents per litre too much for gas.

 "For example, drivers in Toronto are currently being overcharged 15 cents
per litre," Mackenzie says. The situation is the same across the country: 
in Halifax drivers arecurrently overpaying 19 cents per litre;
21 cents per litre in Winnipeg; 18 cents per litre in Edmonton;
and a whopping 27 cents per litre in Vancouver.

You can use their handy dandy tool to find out how much you are being
screwed by Big Oil.

And from GasBuddy.com

Edmonton
Today 104.855
Yesterday 104.877
One Week Ago 105.102
One Month Ago 98.740
One Year Ago 101.510

Using the above price for gas Hugh Mackenzie's Gas price gouge: The sequel.calculator finds that in Edmonton;

Your gas prices are 21.1¢ per litre above the normalized cost of 82.9¢ per litre in Edmonton
With today's crude oil price of $62.01 USD per barrel and the US dollar at $1.11 CAD, the price of regular unleaded gasoline in Edmonton should be 82.9¢ per litre at normal profit margins. At a price of $1.04 per litre, you are paying 21.1¢ per litre in pure excess profit. Across Canada, an extra margin of 21.1¢ per litre generates an additional profit of 21.1 million dollars per day

Further from Gasbuddy.com we find that prices for gas have steadily increased over the past six years.

"Expect even higher profits, especially during the second and third quarters, their busiest season," said Jason Toews, co-founder of gasbuddy.com, a website that compares gas prices across the country. Toews predicts prices will peak at $1.30 a litre for self-serve, regular unleaded by August. This means more money for Big Oil, while gas retailers, Toews says, are making very little.

And even if there is competition between Gas Stations over prices this happens; Wisconsin Gas Station Owner Ordered To Raise Prices

So much for the free market.

And even without provincial and federal taxes on gasoline, that Linda Letherdale and her pals at the Canadian Taxpayers Federation whine about, the price would still be going up.

Oil prices rose Thursday despite a U.S. report showing that stocks of gasoline, crude and distillate fuels all rose,

"At this point it doesn't even matter any more what the reasons behind the price rise are," said Bruce Cran, president of the Consumers' Association of Canada.

He said consumers are "exhausted and frustrated" and are being gouged at the pumps for reasons that aren't clear.

"We've got no satisfactory explanations as to why these huge price rises take place year after year," said Cran, whose group received hundreds of calls Tuesday from motorists looking for answers.

According to MJ Ervin & Associates Inc. a Calgary-based consulting firm, the national average price of gas on Tuesday was reported at about $1.10 a litre, up five cents from the average price in March and 19 cents from the average price in January.

"This is a trend that we see every spring," said Catherine Hay, Senior Associate with MJ Ervin and Associates.

"This is something that we see in anticipation of the big driving season every year," she said.

Hay said this time last year the national average gas price was $1.08, only two cents lower that this year

Just like dandelions

tags:

Canada, Edmonton, gasoline, gas gouging, gas prices, big oil, petrochemical, refinery,

Casino Capitalism

Betting in the marketplace....

Bank of Canada Governor David Dodge also repeated a concern over a sharp reduction in the pricing of risk in financial markets, singling out the carry trade as a possible source of trouble.

The carry trade is a popular strategy that involves borrowing money in low interest rate currencies like the yen and then reinvesting in riskier emerging markets.

"One-way bets are always dangerous things," he said in response to a question about such trades.

....like betting on natural gas....

Bank of Montreal, Canada's fourth-biggest lender, said last week it will post a pretax loss of as much as C$450 million ($406 million) from trading in natural gas contracts. The bank plans to fire trader David Lee and Bob Moore, an executive managing director, over the losses, the National Post newspaper said today. The men are staying with the bank until the firm can unwind its trading positions, the paper said, citing unidentified people.

BMO said the losses are primarily from natural gas trading, while Desjardins Securities analyst Michael Goldberg expects more losses in the future.

“The commodity trading losses were the result of decisions that did not adequately recognize the vulnerability of the portfolio to changes in market volatility,” Bill Downe, President and Chief Executive Officer of BMO Financial Group, said in a statement.

Mr. Goldberg interpreted this statement as “faulty trading algorithms were based on garbage in, and they generated garbage out,” he told clients in a note.

This is the same bank that laid off staff knowing full well it was losing money based on a bad bet.

BMO More ATM's Less People

Banks Profit From Job Cuts

Fool me once....fool me twice.....ah heck fool me thrice

U.S. hedge fund faces billions in losses on natural gas bet

Monday, September 18, 2006 | 7:08 PM ET

Amaranth Advisors, a big U.S. hedge fund, has told its investors to brace for huge losses as a result of its costly bet that natural gas prices — now at a two-year low — would rise.

Some reports said the fund's losses could amount to $4 billion US.

"We anticipate our year-to-date losses might be in excess of 35 per cent as we near completion of the disposition of our natural gas exposure," the hedge fund said in a letter to investors obtained by several media organizations.

Amaranth traders apparently placed hugely leveraged bets that natural gas prices would rise.

A Hedge Fund’s Loss Rattles Nerves - New York Times

Enormous losses at one of the nation’s largest hedge funds resurrected worries yesterday that major bets by these secretive, unregulated investment partnerships could create widespread financial disruptions.

Alan Zale for The New York Times

Amaranth Advisors’ trading floor in Greenwich, Conn. The hedge fund said that it had lost more than $3 billion in the downturn in natural gas.

The hedge fund, Amaranth Advisors, based in Greenwich, Conn., made an estimated $1 billion on rising energy prices last year. Yesterday, the fund told its investors that it had lost more than $3 billion in the recent downturn in natural gas and that it was working with its lenders and selling its holdings “to protect our investors.”

Amaranth’s investors include pension funds, endowments and large financial firms like banks, insurance companies and brokerage firms. The Institutional Fund of Hedge Funds at Morgan Stanley was an investor in Amaranth; as of June 30, it had a stake valued at $124 million. The turnabout in the fortunes of the $9.25 billion fund reflects the decline in energy prices recently; natural gas prices fell 12 percent just last week.

The scale of Amaranth’s losses — and how quickly they appear to have mounted — was the talk of Wall Street yesterday, as was speculation on how much the bet was leveraged, or made on borrowed money. Still, there were no signs of ripples on the financial markets as a result.

Amaranth’s woes are largely the result of a decline in natural gas prices that began in December, well before the spring months of March or April, when they typically fall off. Amaranth’s biggest stake was a combination bet on the spread between natural gas futures prices for March 2007 and those for April 2007. Amaranth had often bet that the spread on that so-called shoulder month — when natural gas inventories stop being drawn down and begin to rise — would increase.

But instead the spread collapsed. In the last six weeks, for example, the spread between the two futures contracts ranged from $2.50 at the end of July to around 75 cents yesterday.

Traders briefed on Amaranth’s problems, including one person who examined the fund’s books yesterday, said that the losses might be considerably larger than the firm estimated. Over the weekend, according to one person briefed on the situation, Goldman Sachs examined the fund’s positions.

Amaranth is not the first hedge fund to experience problems in energy markets. MotherRock Energy Fund, a $400 million portfolio, shut down last month after losing money on its bets that natural gas prices would fall. Summer heat sent prices soaring and the fund lost 24.6 percent in June and 25.5 percent in July, according to one investor.

The natural gas market is exceptionally volatile, making it an ideal playground for hedge funds that thrive on wide price movements in securities. Natural gas prices are subject to more severe swings than oil, in part because gas cannot be stored easily.

Amaranth Advisors LLC was an American multistrategy hedge fund managing US$9 billion in assets. In September 2006, it collapsed after losing roughly US$6 billion in a single week on natural gas futures. The failure was the largest hedge fund collapse in history.

Amaranth’s energy desk was run by a Canadian trader named Brian Hunter who placed "spread trades" in the natural gas market. Hunter had made enormous profits for the company by placing bullish bets on natural gas prices in 2005, the year Hurricane Katrina had severely impacted natural gas refining and production. Hoping for a repeat performance, Amaranth wagered with an 8:1 leverage that the difference between the March and April futures price of natural gas for 2007 and 2008 would widen.

Natural Gas: Amaranth Advisors & Centaurus Energy

And although the loser in this, Brian Hunter is doing much better than the Amaranth investors. He’s still has the couple hundred million he made before he nuked Amaranth and being quite cheeky, he’s actually shopping around a new fund!

Econbrowser: Amaranth hedge fund losses

Of course, if anybody ever audited Amaranth's holdings, they would have seen what was going on immediately, and indeed NYMEX apparently inferred from the volumes that something was wrong and warned Amaranth to reduce its positions. But the way the hedge fund game is often played, foolishly credulous investors never get to see the books and base their decision simply on the fund's track record and slick sales pitch. I have to join Big Picture and Motley Fool in blaming the folks who supplied Amaranth with capital, rather than the managers themselves. Anyone who tells himself that 35% annual returns with no risk are there to be obtained by some unseen hedge-fund magic is soon to be parted from his wealth.

When you hold a significant portion of the outstanding contracts, you have the potential to move markets in a big way when you liquidate, making your swan song all the more dramatic when it comes. This is what happened to Long Term Capital Management, and it seems likely that a significant part of the September volatility in the graphs above is directly due to Amaranth.

I have often argued that as long as speculators make a profit, their actions tend to be stabilizing, as they have helped direct resources to where they are most needed. But by that metric, we got $6 billion worth of destabilization out of Amaranth last month. And when I hear a story like this, my first instinct is that there could well be a lot more of this going on. Amaranth's staggering losses leave me more open to the claim that a significant part of the general commodity price increases we have seen in recent years might be the result of actions by speculators who are destined to earn spectacular losses.

See

Criminal Capitalism Redux

CEO

Stock Options

Corporate Crime

White Collar Crime

Criminal Capitalism

Find blog posts, photos, events and more off-site about:
criminology, Amaranth, corporate-crime, white-collar-crime, sociology, hedge funds, scandal, criminal-capitalism, workers, employees, theft, crime, layoffs,, Canada,, banks,, banking,, BMO,, natural gas,, Bank of Montreal,, Banks,, Canada,, jobs,, layoffs,, profits,, BMO,, Bank, of, Montreal,, workers,, bank, workers,,petroleum,,David Dodge, Bank of Canada,

Man Made Volcano

As if Indonesia did not have enough environmental problems; 340000 flee deadly floods in Jakarta, now we find out that the mud spewing volcano that erupted last year is a man-made phenomena.

The Indonesian volcano, known as Lusi, has been spewing steaming mud since May last year, causing 13,000 people to flee their homes (Image: University of Durham)

Drilling for gas most probably caused the eruption of an Indonesian mud volcano, forcing the evacuation of thousands of people, scientists report.

"[The eruption] appears to have been triggered by drilling of over-pressured porous and permeable limestones at depth of around 2830 metres below the surface," says the study, the first published on what caused the eruption.

The study, which appears in the February issue of the journal GSA Today, adds that the volcano has been disgorging 7000-150,000 cubic metres of mud every day since it erupted in May last year.

Such pressures, coupled to the local geology, suggest the flow "will continue for many months and possibly years to come", warn the UK researchers, led by Professor Richard Davies from the University of Durham.

In the coming months, sag-like subsidence several kilometres wide will occur, and around the main vent there is likely to be "more dramatic collapse", forming a crater, the study adds.

An area of at least 10 square kilometres around the volcano will be uninhabitable for years, and over 11,000 people will be permanently displaced, it says.

Add to that the wildfires started by slash and burn operations for palm oil plantations and the continuing disruption and displacement from the 2004 Tsunami and Indonesia is an ongoing environmental disaster.

But do plan to take your holidays there, I hear it is quite nice otherwise.

See

Indonesia

Palm Oil

Borneo

Disasters

Environment

Volcano

Tsunami


Find blog posts, photos, events and more off-site about:
Indonesia, volcano, mud, disaster, manmade, gas, oil, environment

Israeli Rabbi Says Wipe Out Arabs

I wonder if this comment will generate the same world wide outrage and denounciation as comments made by the President of Iran.

The spiritual leader of Israel's ultra-orthodox Shas party, Rabbi Ovadia Yosef, has provoked outrage with a sermon calling for the annihilation of Arabs."It is forbidden to be merciful to them. You must send missiles to them and annihilate them. They are evil and damnable," he was quoted as saying in a sermon delivered on Monday to mark the Jewish festival of Passover. Rabbi Yosef is one of the most powerful religious figures in Israel, He is known for his outspoken comments and has in the past referred to the Arabs as "vipers".

And while there are apologists attempting to excuse his comments let us not forget that in Israel the law is too stike ones enemies first.

The Iranian nuclear threat is uppermost in the minds of many Israelis and Jews around the world who care for their coreligionists living in Israel . However, it seems that the case for a preemptive strike against Iran has not been properly made. From a Jewish legal standpoint it is clear according to Halacha (Jewish law) one must rise first and strike a person who clearly intends to deliver one a fatal blow.

Even if that threat is only 'percieved' and not a real one. Such was the case of Israels attack in the past on Iraq. An act that was a violation of international law.

And with the ramping up of politics of fear, which is what the War on Terror really is, Israelis are getting an itchy trigger finger.

Israel’s powerful deterrent is continually being downplayed by those who insist that the Israeli state is essentially as vulnerable as the Jews of Europe were in 1939.

Of the dozens of articles and speeches which express that fear, one stands out. It is by Benny Morris, one of Israel's top historians who made his name by exploring the origins of the Palestinian refugee problem. He is no right-winger (although he has moved rightward lately) which makes his words especially significant.

In an essay in the "Jerusalem Post," called "This Holocaust Will Be Different," Morris offers this prediction.

"One bright morning, in five or 10 years, perhaps during a regional crisis, perhaps out of the blue, a day or a year or five years after Iran's acquisition of the Bomb, the mullahs in Qom will convene in secret session, under a portrait of the steely-eyed Ayatollah Khomeini, and give President Mahmoud Ahmadinejad, by then in his second or third term, the go-ahead.

"The orders will go out and the Shihab III and IV missiles will take off for Tel Aviv, Beersheba, Haifa and Jerusalem, and probably some military sites, including Israel's half dozen air and (reported) nuclear missile bases….

"With a country the size and shape of Israel (an elongated 20,000 square kilometers), probably four or five hits will suffice: No more Israel. “

The most distressing part of Morris's analysis (or prophecy) is its utter fatalism. “America will do nothing. Iran will get the bomb. Iran will use it on Israel. Israel will be destroyed. It's all inevitable.”

But Israel may not have to go it alone as the United States has ramped up its rhetorical hysteria over Iran in preparation for a potential attack, either by it or Israel.

Testifying before the Senate Foreign Relations Committee on Thursday, Zbigniew Brzezinski, the national security adviser in the Carter administration, delivered a scathing critique of the war in Iraq and warned that the Bush administration’s policy was leading inevitably to a war with Iran, with incalculable consequences for US imperialism in the Middle East and internationally.

The United States is planning what will be a catastrophic attack on Iran. For the Bush cabal, the attack will be a way of "buying time" for its disaster in Iraq. In announcing what he called a "surge" of American troops in Iraq, George W. Bush identified Iran as his real target. "We will interrupt the flow of support [to the insurgency in Iraq] from Iran and Syria," he said. "And we will seek out and destroy the networks providing advanced weaponry and training to our enemies in Iraq."

Like WMD the evidence of Iranian involvement in Iraq is also suspect.

Evidence is still inconclusive on Iran involvement in Iraq

Bush administration officials acknowledged Friday that they had yet to compile evidence strong enough to back up publicly their claims that Iran is fomenting violence against U.S. troops in Iraq.

Administration officials have long complained that Iran was supplying Shiite Muslim militants with lethal explosives and other materiel used to kill U.S. military personnel. But despite several pledges to make the evidence public, the administration has twice postponed the release — most recently, a briefing by military officials scheduled for last Tuesday in Baghdad.

As far as Tehran's involvement in Iraq is concerned, Lionel Beehner of the Council on Foreign Relations wrote Wednesday that " enormous controversy" still swirls around the issue of Iranian influence.

...much of the evidence the United States cites as proof of Iranian involvement remains secret and in some cases is disputed by the Iraqi government, too. This has created an uncomfortable analogy to the period before the Iraq invasion, when secret intelligence ultimately discredited pushed the United States toward war.

With the Real Politick of Fear, evidence does not matter to Israel of the United States, the mere use of pompous rhetoric and inflamatory statements by Mahmoud Ahmadinejad is being used as an excuse to prepare for war with Iran by chicken hawks in both countries.

When Israeli Prime Minister Ehud Olmert declared last week at the Herzliya conference that Israel could not risk another "existential threat" such as the Holocaust, he was repeating what has become the dominant theme in Israel's campaign against Iran – that it cannot tolerate an Iran with the technology that could be used to make nuclear weapons, because Iran is fanatically committed to the physical destruction of Israel. The internal assessment by the Israeli national security apparatus of the Iranian threat, however, is more realistic than the government's public rhetoric would indicate. Since Iranian President Mahmoud Ahmadinejad came to power in August 2005, Israel has effectively exploited his image as someone who is particularly fanatical about destroying Israel to develop the theme of Iran's threat of a "second Holocaust" by using nuclear weapons. But such alarmist statements do not accurately reflect the strategic thinking of the Israeli national security officials. -antiwar

As usual what is forgotten is that the President of Iran does not run Iran, like the President of the United States runs America. He is only one voice which is controled by the Mullahs and their councils.

The Baltimore Sun, in an editorial : "Iran is hardly a monolithic, march-in-step country; everything Iranian is not evil. But that's a hard sell to make in Washington...Iran's interests, in fact, are in some ways parallel to America's. Iran would not benefit from an Iraqi collapse into total anarchy, or from a wider sectarian war. Right now, Iran and the Sunni regime of Saudi Arabia, one of America's traditional allies in the region, have been trying to mediate a settlement in Lebanon.

The fact that this whole issue arose from Irans need to develop nuclear energy, not a bomb, in order to expand its infrastructure is completely lost in the whole chicken little reaction that nuclear energy = nuclear weapon. It is a deliberate obfustication of what Iran wants, which is nuclear power contracts like Pakistan and India have, not weapons, but access to nucelar technology and uranium.

They need an alternative energy source to grow their capitalist infrastructure since their domestic reliance on gas and oil is now restricted because of export demand.

At the meeting with Secretary of the Russian Security Council Igor Ivanov in Tehran over the past weekend, Iran's supreme leader Ayatollah Ali Khamenei said: "Our countries could set up an OPEC-type organization on gas cooperation."

Judging from the initial response, the majority of analysts think that this proposal is rooted in politics rather than economics.

This is not the first time the idea has been put forward. Iranian President Mahmoud Ahmadinejad offered to Russian President Vladimir Putin at their meeting in Shanghai in June 2006 to establish what he described as cooperation "in fixing gas prices, and major flows in the interests of global stability."

Indicatively, the same idea was discussed during the recent Algerian visit of Viktor Khristenko, Minister of Industry and Energy: Algeria and Qatar could join the two countries. The resources of this potential cartel are very impressive - they account for more than 30% of the world's gas production, and their aggregate proven reserves exceed 60% of the total, which is comparable to OPEC's respective share in the global oil reserves - about 68%. The would-be cartel could include other members as well.

Malaysia has warned it will drop free trade talks with the US if it is asked to scrap a multi-billion-dollar gas deal with Iran, a news report said yesterday.

US House of Representatives' Foreign Affairs Committee Chairman Tom Lantos has urged the suspension of negotiations to forge a free trade agreement with Malaysia until it halts a US$16 billion deal to develop gas fields in southern Iran.

The proposition of war with Iran is saber rattling by Israel and America, because their very visible military failures in Lebanon and Iraq have given strength to their regional enemies, which have increased not decreased thanks to Bush's War On Terror.

Now they must strike back, at least rhetorially, ramping up the threat that they will take unilateral action. Whether that threat will come to pass is another question. But it bodes ill for any resolution to the crisis of Middle East. Chickens, home, roost.

See:

Oil the New Silk Road

US Declares Economic War On Iran

Find blog posts, photos, events and more off-site about:
nuclear,, nuclear, weapons,, WMD,, Iran,, Isreal,, Bush,, USA,, Iraq,, Lebanon,, Rabbi Yosef,, anti-arab,, Russia,, Putin,, oil,, gas,, Middle, East