Politics

Pakistan is being urged to cut its energy subsidies in order to resolve supply problems that have led to chronic electricity shortages. But the debate on reducing energy spending touches upon a more fundamental failing of the Pakistani state: a near total inability to get the population to pay either tax or energy bills.

Theoretically, maintaining artificially low prices for electricity should see the proportion of paid bills rise. But PEPCO, the national power company, has seen collected revenue fall over the past year.

Libyan oil production will take years, not months, to return to full capacity once a political solution to the conflict is found, according to Barclays Capital.

“The reincorporation of Libyan oil into the world market increasingly seems a distant possibility” according to the study, which warns of a lasting political vacuum after the potential fall of the Gaddafi regime.

Energy subsidies in Pakistan are contributing to “severe supply problems” according to a report from the country’s Petroleum Institute.

Power consumption has grown by 80% over the last 15 years, but a failure to keep up with demand has led to crippling electricity shortfalls.

Israel may be considering its energy options after a pipeline bringing gas from Egypt suffered four attacks in the space of five months.

This link provides Israel with 40 per cent of its gas and the most recent explosion, which took place at a monitoring station near the Egyptian town of Al-Arish, was the second incident in as many weeks.

Chevron, the US energy company, will carry out oil exploration off the Liberian coast later this year, giving the west African country the possible chance to join its neighbours as an oil-producing nation.

When the Republic of South Sudan becomes the world’s newest state on Saturday, the new government in Juba will begin to assess how it can establish an independent export route for its vast oil reserves.

India seems to hold the upper-hand over Iran in a dispute over payments for crude oil shipments that has been rumbling for over six months.

Iran supplies India with 12-14 per cent of its total imports, making it India’s second biggest provider after Saudi Arabia. But a payments dispute has left India owing debts estimated at anywhere between $2-6 billion. In effect, this means India has been importing Iranian oil on credit since December 2010.

Pakistan is to become a key buyer of Iranian natural gas at a time when relations with Washington are at their most strained in recent years.

Work on extending the Iran-Pakistan gas pipeline will begin in the next six months and is set to be complete by 2014, according to Asim Hussain, the Pakistani natural resources minister. Some 1,100 km of the 2,700 km pipeline has already been completed on the Iranian side of the border, stretching from the South Pars field to the frontier with Pakistan.

Sheila McNulty

The weekend oil spill by ExxonMobil  into Yellowstone River gives environmentalists more ammunition in their long-running battle against granting the oil industry increased access to US oil resources.

While only the final investigation will prove whether Exxon failed to do some maintenance or take other measures that could have prevented the spill, one thing is certain: the US continues to have an unacceptable number of spills on both oil and natural gas pipelines.

Indeed, one of the key reasons raised by environmentalists to block the Keystone XL pipeline from bringing oil sands fuel from Canada’s tar sands across the US to Texas is the high number of spills on the first stage of that pipeline – the Keystone - in its first year of operation. The company says they are not significant. And Exxon might well be able to contain this spill so that it is not a massive environmental disaster.

But why does it seem regulators tend to wait until disaster strikes before taking appropriate action? There had long been signs that the Gulf of Mexico offshore was not being sufficiently regulated, yet the issue of permits continued at a rapid pace until Macondo struck.

The bottom line is that the US has had a number of red flags this past year on the need to improve pipeline safety. Perhaps the biggest of these was the fatal explosion of a gas pipeline in a California residential area.

But, less than a year later, Exxon is the latest to suffer a spill. Its reaction:

No cause has been identified for the release of oil from the pipeline, which met all regulatory requirements and has undergone inspection most recently in December. A field audit of the pipeline’s integrity management program was undertaken by US Department of Transportation Pipeline and Hazardous Materials Safety Administration in June.

So if regulators just inspected the pipeline, the question is whether they missed something? 

Ray LaHood, US secretary of transportation, late last year sent Congress proposed legislation to provide stronger oversight of the nation’s pipelines and increased  penalties for violations of pipeline safety rules.

Congressman Fred Upton, chairman of the House Energy and Commerce Committee, in June signalled his committment to updating and improving US pipeline safety:

Pipeline safety is a serious matter of protecting human life and our environment.  Our nation’s nearly half a million miles of pipeline infrastructure play a critical role in delivering vital energy supplies to southwest Michigan and the rest of the country.  Disasters like last summer’s Enbridge pipeline rupture underscore the unacceptable costs of failure and the need for meaningful updates to our current pipeline safety laws.

Representative Ed Markey, the top Democrat on the Natural Resources Committee and a senior member of the Energy and Commerce Committee, called on Tuesday for investigative hearings to be held into the Exxon spill and related safety and environmental issues:

 

ExxonMobil has turned parts of the Yellowstone River black with their spilled oil. Just as BP was held to account for their accident in the Gulf of Mexico, ExxonMobil should appear before Congress so that we can examine the holes in oil pipeline safety that led to this incident and how we might prevent another spill in the future. Several aspects of pipeline safety regulations may need review based on this disaster.

Mr Markey noted that Exxon had said that the pipeline had been examined within the five-year increments as required by law. He said that timeline may need to be reduced, in light of this accident and the others over the last few years. 

On top of that, higher penalties would help pay for better enforcement.  Surely, given all its budget issues, Congress can see the benefit of this?

Sheila McNulty

Alaska’s decision to host the largest oil and gas lease sale of any US state this year is good news for the oil and gas industry, which has been pressing for more access. And while the resulting exploration and production certainly will be good for the overall economy – creating jobs and boosting activity – it is a pity that it is not against a backdrop of better news on the environmental front.

By this I mean concerted steps by the US government to reduce the use of oil as part of a larger effort to curtail carbon emissions. This issue has long disappeared from the political radar, despite being a key platform on which President Barack Obama was elected.

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