Iran ends petrol-only car making

Speaking of the Beeb. They have a story running just now (or rather, on my phone while we ate lunch – sad, isn’t it?). Speaking also of Iran’s petrol problems, lately.

Iran has announced that it will stop producing purely petrol-driven cars and produce more dual-fuel vehicles, which also run on gas.

The minister of industries said the production of petrol-only cars would stop in just over two weeks’ time.

I know, I know – Iran has gas?

Correspondents say it is not clear whether Iran can produce enough gas, or supply it to petrol stations.
…
it is not clear the infrastructure is in place yet, either to produce enough gas or to provide enough filling stations, our correspondent says.

There is already a long list of people waiting to have their cars converted from petrol-only to duel-fuel.

Ah. This story did shit me no end because the writer cannot tell “duel” from “dual”. I also did not know Iran even made its own cars, let along some 1.5m or so of them per year. All of which will now be hybrids (no mention of the mileage at which Iranians are looking), while existing cars wait (by the looks of it, for a while) to be converted.

This follows Iran’s petrol rationing of last week – still very unpopular. Apparently demand has stopped fallen some 20 to 30 percent – no doubt mostly replaced by an underground economy, based on the anecdotes the news media like to place in their stories.

It is still, to my mind, a demonstration of the silliness of command and control vs. straight rational pricing. All the Iranian government had to do was slash the subsidies for oil imported and sold domestically (40% of petrol in Iran is imported). Possibly even use the money saved to build up mercantilist and democratic infrastructure,.

Florida, the foreclosure state…

According to Duane LeGate, president of House Buyer Network. From CNN:

Duane LeGate, president of House Buyer Network, arranges quick sales for home owners in distress. He claims he can predict where markets will go bad by looking at the traffic on his Web site.
…
Short-sale interest can indicate slumping markets that are not detectable by traditional price indices. NAR’s median home price stats and same-home sale-prices from the Office of Housing Enterprise Oversight can lag or disguise actual market conditions.

Most deals close months after prices are agreed on. Evidence of changes in market conditions may not come out for months afterwards. Evidence of significant discounts in a majority of homes sold wouldn’t appear for a while.

When LeGate sees big jumps in client contacts from a single county, he concludes that the area has hit a rough patch that may not come out in price stats for months. It’s played out that way in the past when he saw other markets going into distress.

“We called Phoenix, two counties in California and West Palm Beach, Florida in June of 2005,” he said, at a time when those areas were still perceived to be white-hot.

What an interesting – and distant! – indicator for housing. CNN, whom I don’t rely upon too heavily (go read the BBC, if you need cable news – at least the BBC knows where Afghanistan is) nevertheless also have interesting lists of house price changes by area in the US, as well as the most affordable housing.

If you live in these areas and were wanting a bigger place, sit tight, I suppose. Auction-prices may be just around the corner…

Besides the Florida markets, other locales LeGate identified as likely trouble spots include Clark County, Nevada and Riverside County, California where the site’s traffic more than doubled between June, 2006 and May, 2007, and Price George County, Maryland, where it tripled.

China ‘gets’ pollution

I was impressed by the attitude towards sustainability in China that I saw in the documentary series design: e² (episode 5, “China: from red to green”). Then again, I also been absolutely non-plussed about some of the actions taken there, such as painting a mountain green:

Opinions differ as to whether it was related to feng-shui or a seriously mis-understood memo. Either way, I hope they come up with some name for the birth defects coming from all that paint when it ran off the mountain.

So the news today is that Beijing has found a brilliant mid-point between Command and Control and market-based solutions to pollution in China.

BEIJING, July 6 (Reuters) – In the latest government initiative to improve China’s grim environmental record, the central bank on Friday instructed banks to stop lending to projects that cause heavy pollution and waste energy.

The People’s Bank of China urged banks to realise the “importance and urgency” of using financial services to promote green development.

In a statement on its Web site www.pbc.gov.cn, it instructed banks to call in existing loans, and to extend no new credit, to projects deemed undesirable by the government; it also told banks to lend less to sectors where there is overcapacity.

Beijing has also gone for a little command and control:

No new industrial projects will be approved in several cities and industrial parks along four major river systems to prevent them from being further contaminated.

Six cities, two counties and five industrial zones were indicted by the State Environmental Protection Administration (SEPA) for their role in polluting the Yangtze, Yellow, Huaihe and Haihe rivers.

Of course, Beijing has to work at this. Rioting and collective petitioning has, according the head of SEPA, been steadily increasing in response to environmental degradation and pollution. They’ve also been busted trying to fudge pollution and mortality numbers, internationally.

I view it as two things. I think Beijing has become quite progressive on issues like sustainability and the environment. At the same time they are as paranoid as ever about bad news – but then they wouldn’t be alone in that. They got hassled for trying to lean on the World Bank; the US leant on the WHO during the SARS outbreak. So it goes – we don’t like bad things said about us.

Meanwhile, it must be remembered that China is moving towards cleaning up China, but Chinese companies are going after resources (and polluting) in South America and Africa.

All of which is to say that, along most dimensions (including aggressive targeting of defence spending), China rolls like the rest of us, and has for a long time. This new move with loans however could teach most of the rest of a us a lesson.

Oil prices are up. And down. Saudi Aramco is America’s BFF

I do believe that’s the second time I have used that to entitle a blog post. Sad, really. I spotted this at The Oil Drum, originally (is there anything those magnificent bastards can’t do?).

Saudi Aramco, the state-owned national oil company of Saudi Arabia, is the largest oil corporation in the world and the world’s largest in terms of proven crude oil reserves and production.

It recently increased it’s crude prices (or rather, prices of crude) for Europe and Asia. But it cut the price for the US. Score!

Aramco cut prices of all grades it sells to the U.S. by between 35 cents and 50 cents a barrel, the Dhahran, Saudi Arabia-based company said in an e-mailed statement late yesterday. Aramco said it raised prices for shipments to Europe in August by between 40 cents and 70 cents a barrel.

Prices of light grades to Asia were also cut – only the heavy grades were increased. Saudi Arabia sure takes care of its friends. At a time when oil would be going through the roof, or would be if there was one:

and with Nigeria worrying us all with the (in)stability of its oil, Saudi Arabia cuts us some slack – but not anyone else? Why is Saudi Aramco such a dick to the other energy-hogs of the world?

I guess, to some extent, but (to quote the famous words of Harvey Danger) that only goes so far. Not quite a month ago, they reduced supply to Asia:

Saudi Aramco, the world’s largest state oil company, will cut supplies of its Arab Light and Arab Heavy crude to refiners in Japan, China and South Korea by between 9.5 percent and 10 percent below their contracted volume, officials said. The Organization of Petroleum Exporting Countries last year pledged to cut supplies by 1.7 million barrels a day to support prices.

See? Everyone says they’re the biggest. This was a combination of rising inventories in Asia, as well as soft demand (which would cause inventories to increase further). Score a point for rational pricing! Europe (discussed at the bottom) is a little different.

The odd part is that inventories in the US are at a nine-year high.

Crude oil inventories, which were expected to fall 500,000 barrels last week, instead rose by 3.1 million barrels.

Inventories of distillates, which include heating oil and diesel fuel, rose 1.2 million barrels. Analysts had expected a 200,000 barrel decline.

The problem in the US is that we/they can’t refine it – so oil is stocking up, petrol is not (sorry, gasoline).

But a lower-than-expected increase in refinery runs was disappointing, analysts said. Refinery utilization rose 0.6 percentage points to 90 percent last week, when analysts had expected a 1.1 percentage point increase.

Refiners have reported a number of outages this week, which means overall refinery runs aren’t likely to increase anytime soon, possibly clouding the outlook for inventories in weeks ahead.

Which still leads back to the same question – why lower the price to the US? If the supply of gasoline is stuck in the mud, as it were, the price or amount of oil coming out of Ghawar won’t have much effect at the bowser (and in fact it is demand for petrol that is driving the price of oil). And as inventories pile up, if the US ever does get its refineries running to form, Saudi Aramco risks losing control of the market – which is why they’re turned on Asia and Europe as they did.

My conspiracy theory:

The Bush administration has been eating up the strategic petroleum reserve on and off for the last several years, as Bush has mentioned wanting to do several times (hard as it is to imagine Bush as a man who will risk future stability, security and wealth in order to make his life as painless and hard-decision-free as possible). This is a helping hand from our friends overseas to get our emergency stocks back in order. Hell, I bet the refineries are running are fine, they’re just not telling us until the SPR is topped-up again.

In truth:

I don’t know. It could well be somthing entirely on the Saudi side – rational pricing, as I said. Trying to get demand down in the face of declining production, but taking it easy on political allies the USA? At the moment the big news is Nigeria and its impact on the global market – as good a time as any to pull something like this.

It’s also likely to be a combination – being seen to be helping the US, preventing big increases in inventories in Asia, and responding to strong demand in Europe while the North Sea’s production is down for maintenance. I still prefer the conspiracy theory though. People don’t believe economics, but they believe conspiracy theories…

Don’t Tell Mum I Work on the Rigs, She Thinks I’m a Piano Player in a Whorehouse

Speaking of oil. Okay, not even close, but I’ve been thinking about this book all afternoon, and I’m being kept awake waiting for an application (iSquint, if you’re interested) to finish.

The book is “Don’t Tell Mum I Work on the Rigs, She Thinks I’m a Piano Player in a Whorehouse”, and I need to see whether my father got around to reading my copy, which I left with him on my last trip home:

And it is bloody fantastic. Even by the standards of Ordinary Australian Storytelling, as far back as Henry Lawson through Slim Dusty to the Castle, this book is fantastic. If you ever happen to see a copy of it on a shelf somewhere, (especially if you’re in a departure lounge heading for your flight) I strongly recommend you pick it up. I have an enormous mental list of Great Books for Flying With – I should post it for discussion some time.

Book Description
Don’t Tell Mum I Work on the Rigs is full of dramatic action, humour and great stories. A take no prisoners’ approach to life has seen Paul Carter heading to some of the world’s most remote, wild and dangerous places as a contractor in the oil business. Amazingly, he’s survived (so far) to tell these stories from the edge of civilization.
He has been shot at, hijacked and held hostage; almost died of dysentery in Asia and toothache in Russia; watched a Texan lose his mind in the jungles of Asia; lost a lot of money backing a scorpion against a mouse in a fight to the death, and been served cocktails by an orang-utan on an ocean freighter. And that’s just his day job.
Taking postings in some of the world’s wildest and most remote regions, not to mention some of the roughest rigs on the planet, Paul has worked, got into trouble, and been given serious talkings to, in locations as far-flung as the North Sea, Middle East, Borneo and Tunisia, as exotic as Sumatra, Vietnam and Thailand, and as flat-out dangerous as Columbia, Nigeria and Russia, with some of the maddest, baddest and strangest people you could ever hope not to meet.
You will chuckle the next time you fill up the car.

Synopsis
Strap yourself in for an exhilarating, crazed, sometimes terrifying, frequently bloody funny ride through one man’s adventures in the oil trade. A take no prisoners’ approach to life has seen Paul Carter heading to some of the world’s most remote, wild and dangerous places as a contractor in the oil business. Amazingly, he’s survived (so far) to tell these stories from the edge of civilization. He has been shot at, hijacked and held hostage; almost died of dysentery in Asia and toothache in Russia; watched a Texan lose his mind in the jungles of Asia; lost a lot of money backing a scorpion against a mouse in a fight to the death, and been served cocktails by an orang-utan on an ocean freighter. And that’s just his day job. Taking postings in some of the world’s wildest and most remote regions, not to mention some of the roughest rigs on the planet, Paul has worked, got into trouble, and been given serious talkings to, in locations as far-flung as the North Sea, Middle East, Borneo and Tunisia, as exotic as Sumatra, Vietnam and Thailand, and as flat-out dangerous as Columbia, Nigeria and Russia, with some of the maddest, baddest and strangest people you could ever hope not to meet.

About the Author
Paul Carter was born in England in 1969. His father’s military career had the family moving all over the world. He has worked in the oil industry for fifteen years, re-locating every few years (old habits).When not getting into trouble on the rigs Paul lives in Sydney with two motorbikes and a daschund named Colin, visiting his father in the UK and his mother in France, and is constantly flying to all corners of the globe.

How can you not? iSquint is done – I’m off to bed.