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Soros is right to be scared of Russian monopolies
Nils Pratley, Guardian
The word from Moscow is not to expect a bid from Gazprom for Centrica any time soon, but don’t expect the tale to go away. Gazprom has an ambition to supply 20% of the British gas market, and so the comments by George Soros yesterday on the true nature of Russia’s state-controlled energy companies deserve to be heard.
His prime concern is the danger of allowing Rosneft, the oil company, to float in London, but his analysis applies equally to Gazprom. Both companies are in effect controlled directly by Moscow.
This is what Soros said: “Europe is relying for a large portion of energy supplies on a country that does not hesitate to use its monopoly power in devious and arbitrary ways.”
Gazprom’s heavy-handed, and widely condemned, act of turning off the taps to Ukraine in January is the prime piece of evidence.
To that, we could add last week’s warning from Gazprom’s chief executive that “no good results” would follow if the company was denied its ambition to expand in Europe.
The argument here is very simple. Gazprom is not a normal company. It’s a monopoly supplier that wants to restrict access to its own markets and is not afraid to adopt bullying tactics abroad.
(27 April 2006)
Related:
The Big Question: Should we fear Kremlin control of Europe’s energy supply? (The Independent)
‘Russia has left the western orbit’ (The Guardian)
Terrorism and the race for resources
Heiko Flottau, ISN Security Watch
The US Department of Energy (DoE) predicted in 2004 that world oil demand would rise from 77 million barrels per day (mbd) in 2001 to 121 mbd in 2025 – an in-crease of 57 per cent.
According to the DoE, this increase in demand would be met by Saudi Arabia, the states neighboring the Caspian Sea, Iran, Iraq, Kuwait, and Nigeria.
The DoE foresaw a gradual increase of Saudi production up to 120 per cent – from 10.2 to 22.5 mbd, an increase of the Caspian Sea producers of 8.5 mbd, a combined increase of Iran, Iraq, and Kuwait of 7.6 mbd, and an increase of Nigerian output of 1.6 mbd.
But last year, Houston-based banker, oil investor, and oil analyst Matthew Sim-mons published a book, “Twilight in the Desert”, arguing that Saudi reserves had been largely overestimated.
…According to some analysts, it is no coincidence that the “war on terror” has merged “with the US effort to safeguard access to oil, especially in the Persian Gulf and in the Caspian Sea basin”, as Klare put it even before the 11 September 2001 attacks on the US in an essay for Le Monde Diplomatique.
Some experts argue that the stationing of US forces in Central Asia, in the Persian Gulf region, in the Caucasus, and in Iraq is often justified by the US administration as a means of protecting oil installations against “terrorist threats”.
For instance, when the US was planning to send a military force to Kazakhstan in 2004, the State Department argued that the troops were needed to “enhance Kazakh-stan’s capability to respond to major terrorists threats to oil platforms”.
That is why experts like Klare see a “new landscape of global conflict”, where “anti-terrorism and the protection of oil supplies are closely connected”.
Heiko Flottau is ISN Security Watch`s senior correspondent in Egypt. He wrote for many years for Sueddeutsche Zeitung in Belgrade, Warsaw and Cairo. He is author of the book “From the Nile to the Hindukush – The Middle East and the New World Order” (Ger-man 2004, Arabic 2006)
(27 April 2006)
How America’s foes have us “over a barrel” – of oil
David Wood, Newhouse News Service via Seattle Times
WASHINGTON — If Iran succeeds in building nuclear weapons, it will be paid for in part by American drivers.
With oil prices and global oil consumption at near-record levels, the radical Islamist government in Tehran is raking in more than $68.4 billion a year in oil revenues, helping it finance its nuclear program and underwrite terrorist operations against American soldiers in Iraq and elsewhere across the Middle East.
And with global oil markets sucked dry of excess by growing consumption worldwide, even a small disruption in the flow of oil would drive prices through the roof and stagger the world’s economies.
The United States does not buy oil directly from Iran. But the disappearance of Iran’s 2.5 million barrels per day from the world’s oil markets would be felt acutely in the United States, probably costing 1 million jobs, according to Orde Kittrie, a former State Department official who teaches economics and international law at Arizona State University.
“America’s enemies literally have us over a barrel,” he says.
(27 April 2006)
Second Thoughts in Congress on Oil Tax Breaks
EDMUND L. ANDREWS and MICHAEL JANOFSKY, NY Times
WASHINGTON, April 26 — As anxiety spread in Congress on Wednesday over soaring oil prices, lawmakers in both parties said they were ready to take a tough look at oil and gas incentives they passed as recently as eight months ago.
Citing record industry profits and huge executive pay packages, the top Republican and top Democrat on the Senate Finance Committee asked the Internal Revenue Service to turn over tax returns for the nation’s 15 biggest oil and gas companies.
Leading Republicans echoed President Bush’s call Tuesday to trim about $2 billion in tax breaks Congress passed as part of the energy bill last August. Several prominent Democrats, not to be outdone, pushed for repealing oil and gas tax breaks worth more than $10 billion over the next five years.
“Nobody has any sympathy for oil companies on Capitol Hill right now,” said Representative Jack Kingston, Republican of Georgia and vice chairman of the House Republican Conference. “You talk to someone driving to work in an F-150 pickup and paying $75 to fill up his tank, and everybody’s on his side.”
Both parties jockeyed for political advantage even as they were grasping for ideas. Most experts contend that the government has few options that would quickly reduce gasoline prices, and competing party agendas could block Congressional agreement on any meaningful legislation.
Lawmakers have introduced more than 30 energy bills in the last several months. But they reflect often -conflicting goals of reducing prices, increasing production and soothing consumer anger about oil industry profits.
Democrats called for a 60-day halt on collecting federal gasoline taxes, which are 18.4 cents a gallon, but they were openly split about the more radical step of imposing a windfall profits tax on major oil companies. For their part, many Republicans are torn between wanting to show their sympathy for consumers and maintaining their longstanding support for the oil industry.
(26 April 2006)
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