Comment: This article does not contain anything new. Just to point out that a lot of anti-Peak Oil articles over the last few months (e.g. item 4a below) suggest that the anti-Peak Oil brigade have somehow or other won the argument, i.e. plenty of oil, no problem. If CNN Money is reporting T. Boone Pickens and giving him the limelight over Forbes publisher and former U.S. presidential candidate Steve Forbes, then the anti-Peak Oil brigade have not won the argument.

Article: Legendary oilman T. Boone Pickens said Tuesday that global demand will outstrip supply in the fourth quarter of this year, leading U.S. oil prices to rise to $80 or more a barrel.

Pickens would not predict how high beyond $80 oil would go this year or in 2008 but said he was interested to see how long $80 oil will need to be sustained to lessen demand.

... Pickens, 79, began his career in the oil industry in 1951 as a geologist and now heads BP Capital, a $4 billion hedge fund that made $1 billion last year.

He picks $78 because oil hit a record high just over that level last July when tensions began between Hezbollah and Israel in Lebanon.

"At some point prices will begin to kill demand," said Pickens. "The only way to kill demand is price."

Reminded that $78 oil did not significantly lower demand last summer, Pickens said that was because it did not stay there long enough to test if that was a demand-killing price.

... "What's going to happen is the supply will get very critical in the fourth quarter this year," Pickens said. "Demand will be above supply and we'll see what happens."

Pickens said he has predicted $100-a-barrel oil and he still thinks oil will reach that level, but he would not say when.

"We'll all see $100 in the future," Pickens said. "Everybody says that. You're going to have to conserve at some point. At what price will that conservation really kick in? Again, I don't know."

... Forbes blamed money supply growth for near-record high oil prices, citing policies by central banks, led by the U.S. Federal Reserve.

The true price of oil is between $40-$45 per barrel, Forbes said.

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2a/ Spain hit by property crash fears (BBC News, Wed 25 Apr)

http://news.bbc.co.uk/1/hi/business/6592203.stm

Comment: Several countries have over-inflated property prices, driven high by low interest rates, individuals too keen to go into debt, and banks only too willing to lend what in a post-Peak world will look like ridiculous sums of money. The USA, UK, Ireland and Australia are all at risk. Parts of the Middle East are jumping on the bandwagon.

“Coupled to this has been strong demand for housing helped by the low interest rates that have also underpinned consumer spending and allowed households to take on increasingly large amounts of debt.”

Article: Fears of a Spanish property crash have increased, prompting a sell-off in real estate shares and fanning concerns that thousands of Britons will lose money.

The sell-off was triggered by worries of rising bad debts and speculation that one large company had been buying its own properties to keep prices high.

Spain is one of the main destinations for Britons looking to move abroad or buy a holiday home as an investment.

Analysts warned that a crash could spread to the wider Spanish economy

... Spain's economy has been growing strongly in recent years - the government recently raised its forecast for this year to 3.5% - driven mainly by expansion in the construction industry.

Coupled to this has been strong demand for housing helped by the low interest rates that have also underpinned consumer spending and allowed households to take on increasingly large amounts of debt.

However, in recent months cracks have started to appear and mortgage demand has slowed as homeownership levels topped 85%.

On top of that, households now have some of the highest debt levels in the eurozone, much of which is based on variable lending rates leaving consumers open to sudden increases in borrowing costs.

The worry is that should the suspected property bubble burst, and some analysts estimate that house prices are overvalued by 30%, then many other industries such as banking and retail would also suffer.

Spain's government and construction industry figures tried to calm fears on Wednesday, stating that the fundamentals of the property market remained solid.

... Analysts warned that while the current fears of a crash may be over amplified, the Spanish property boom that had provided strong returns for the past eight years was probably over.

"The country is over-housed, households are over-indebted and the construction industry continues to churn out houses," said Lombard Street analysts in a note to clients.

According to Lombard Street, the biggest problem facing the market was over-supply of housing. Industry estimates show that more than 800,000 new homes were built in Spain last year, four times the number in the UK…

2b/ As Spain falters, is the world's property boom coming to an end? (The Independent, Thu 26 Apr)

http://news.independent.co.uk/business/analysis_and_features/article2486662.ece

Article: Panic selling of Spanish real estate stocks this week sent shudders through property markets worldwide. As investors bet that Spain's 10-year construction boom is finally over, we take a look at global property hotspots to see who will be the next casualty.

Spain - For Brits fantasising about sipping sangria while watching the value of their Spanish holiday-home soar, the dream is over. After five years of double-digit growth, house prices rose by a relatively modest 9 per cent in 2006 and are expected to slow dramatically this year...

UK - Britain's seemingly unstoppable housing market has so far defied predictions of a sharp slowdown, but there are tentative signs that higher interest rates and stretched affordability are starting to take their toll...

London - The capital's housing market continues to power ahead, boosted by foreign billionaires and City bankers eager to spend their bumper bonus cheques on bricks and mortar. Million pound-plus properties in London's swankiest areas, such as Belgravia and Mayfair, have surged by a staggering 32 per cent in the past year, according to estate agent Knight Frank. The mainstream market is also booming...

US - America's housing slowdown has been dramatic. Just 12 months ago, house price inflation was running at more than 13 per cent. By the end of 2006, it had decelerated to 4 per cent. Today, prices are barely rising... But a surge in arrears and defaults and meltdown in the sub-prime mortgage market - which specialises in lending to borrowers with patchy credit records - was the final straw. Paul Ashworth, senior US economist at Capital Economics warns that excess supply caused by a flood of repossessed properties could translate into double-digit annual declines in house prices.

Mumbai - US tycoon Samuel Zell told a gathering of Indian property executives this week it was "mental masturbation" to believe there were endless riches for investors in India's runaway housing market. Coming from a man nicknamed "the grave dancer", the warning was perhaps not that unexpected. For the developers and fund managers who were listening, however, the only question remaining was how far property prices will fall... But in a city where half the population still lives in a slum, there is a growing feeling that the market is on the brink of a collapse. The last time a property bubble burst in India - between 1995 and 2001 - prices slumped by up to 70 per cent. This time, a fall of 30 to 40 per cent is on the cards.

Dubai - The sun always shines, salaries are tax-free and the shopping and leisure facilities rival any other major global city - welcome to Dubai, the largest of the United Arab Emirates, which has begun weaning itself off oil and proving its credentials as a property paradise. An estimated 15 to 25 per cent of the world's cranes are in Dubai, symbolic of a market in such a hurry to build (75,000 new units by 2008; 260,000 units by 2015) that experts warn oversupply could become a real issue...

Latvia - The surprise star-performer in estate agent Knight Frank's latest global house price index is the tiny Baltic nation of Latvia. House prices in the country's capital, Riga, have leapt by a staggering 66 per cent in the past year thanks to a red-hot economy fuelled by booming consumption and easy credit.

Australia - For anxious homeowners wondering whether Britain's housing boom will inevitably turn to bust, Australia's experience of the past three years provides some comfort. If anything, Australia's boom was even bigger than ours, with prices doubling between 1996 and 2003. A flurry of interest rate rises took the wind of the market's sails, but the slowdown was remarkably modest by historical standards. The much-vaunted soft landing was achieved. Since then, the market has shown clear signs of strengthening again, clocking up 8.3 per cent growth last year against 2.3 per cent in 2005. Indeed, the recovery has been such that affordability is now considered the worst on record. Low unemployment, a strong equities market and the commodities boom all point to another year of solid growth.

2c/ Rate rises could spark housing crash, says Nationwide (The Independent, Fri 27 Apr)

http://news.independent.co.uk/business/news/article2489329.ece

Article: Britain's biggest building society warned yesterday of the dangers of a housing crash if interest rates are jacked up aggressively.

Unveiling another punchy increase in house prices, which pushed the annual rate of increase back up into double digits, Nationwide said prices could fall sharply if borrowing costs were lifted above 6 per cent. But it said the market remained on course for a soft landing if rates were raised only once or twice more, to 5.5 or 5.75 per cent, as expected.

"In our view, the talk of rates climbing to 6 per cent and beyond is overblown and if implemented in the current climate could be damaging to housing market stability," said Fionnuala Earley, Nationwide's chief economist.

"With the market already showing signs of cooling, too sharp a rate hike could undermine market confidence and dry up demand swiftly. But on top of this, they could also lead to widespread payment difficulties which, in an illiquid market, could precipitate price falls."

Ms Earley said some month-on-month price falls next year could not be ruled out in any case, but "would not be a disaster". Indeed, prices in the north of England are already sliding, dipping by 0.4 per cent in the first quarter of the year. "But assuming the Bank of England doesn't increase rates in a knee-jerk way, widespread year-on-year falls are unlikely," she added.

Rates would have to rise by another 2 percentage points before affordability for buyers became as stretched as it was before the property crash of the early 1990s, the building society said...

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3/ Alberta's oil boom is already over (Toronto Star, Wed 25 Apr)

http://www.thestar.com/opinion/article/206701

Comment: The title of the article refers to a drop in oil and gas royalties and conventional oil production, not to the total volume of oil being produced.

“Even when [oil sands] production triples to 3 million barrels a day in 2020” – this is the first time I have seen Canadian mainstream media print a realistic forecast for oil sands production in 2020. Usually it is at least 3Mb/d by 2015. 3Mb/d by 2020 is probably the upper limit.

Article: In the midst of this energy-driven boom, it's hard to imagine that the gravy train is already slowing down.

But the truth is the provincial government faces a 33 per cent drop in oil and gas royalties over the next three years, and Albertans should take a close look at the reasons behind it.

First, the supplies of easy-to-get conventional oil and gas have declined to the point that almost 90 per cent of wells are permanently paying lower royalty rates, many as low as 5 per cent.

The highest royalty rate is about 30 per cent, but with so many wells now at the "low productivity rate," the average royalty from conventional oil and gas is down to 20 per cent.

Natural gas, the biggest money spinner for years, which pumped $8.3 billion into the treasury in 2005-06, will bring in only about half that amount, $4.6 billion, by 2009-10.

Conventional oil royalties will also come down. They'll bring in $1 billion this year, one-third less than two years ago, and drop to just $815 million in 2009-10.

Without the oil sands, Alberta would already be in the midst of those unthinkably dark days when the oil runs out, a time most Albertans imagine is still a long way off.

It's tempting to ask, why worry? Oil-sands production is expected to last 40 to 50 years. But the oil sands will never yield the rich flow of petrodollars pumped into the treasury by conventional oil and gas.

Despite the fact that production is rising dramatically, oil-sands royalties will go down, from a high of $2.3 billion last year to $1.1 billion in 2009-10.

Even when production triples to 3 million barrels a day in 2020, royalties will be stuck at $1.1 billion, the same level as 2004-05, according to one report…

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4a/ Non-OPEC oil output seen peaking by 2015 –WoodMac (Reuters UK, Tue 24 Apr)

http://uk.reuters.com/article/oilRpt/idUKSP4119220070424

Comment: Wood Mackenzie have in the past produced a lot of good oil and gas reports. See item 4b for example. It is therefore baffling that they have global oil production growing to 2025, at least. Is it acceptable to warn of global shortages of natural gas, but not oil? Perhaps. At a conference two weeks ago in Edinburgh (see Energy for Scotland : is there a consensus), William C. Ramsay, Deputy Executive Director of the International Energy Agency, said the IEA thought Peak Oil would not happen for something like 20-30 years (I cannot remember his exact words), but that they were now getting seriously concerned about future natural gas supplies, without going into any detail.

Some of the figures in this article are just unbelievable:

- non-OPEC output will force the cartel to hold back some 8 million bpd of capacity by early next decade

- … which should revive oil to around $60 by 2025

- Broughton estimated that Saudi Arabia would have the capacity to pump some 16 million bpd by 2025 [almost double its actual current production]

This reads a bit like a CERA statement. Note that in its latest Medium Term Oil Market Report (Feb 2007), and in various recent speeches, the IEA has/is warning that it expects global spare capacity to remain very tight until at least 2011, and goes into a lot of detail in the MT OMR why. In fact, the IEA has OPEC spare capacity at 4-6 Mb/d (not so different from WoodMac’s 8 Mb/d) by 2011. But it hints that most of this may not be sellable if it is of the wrong quality, and therefore real spare capacity may be say 2 Mb/d, or less.

The tone of the article seems to be a bit anti-Peak Oil: “Countering doomsday 'peak oil' theorists”, and “The study may put to rest immediate concerns over the oil industry's ability to cope with rapid demand growth”. Put to rest?

Article: Oil production outside the OPEC cartel will keep rising until about 2015, while global output will continue to expand through 2025 at least, a top analyst at consultancy Wood Mackenzie said on Tuesday.

Countering doomsday "peak oil" theorists who believe global oil production may be reaching its limits, Wood Mackenzie said research based on its database of field-by-field global data showed supplies should keep expanding for at least 20 years.

It expects global oil production outside the Organization of the Petroleum Exporting Countries to rise to about 52 million barrels per day (bpd) by 2015 from 47 million bpd now, based mostly on existing fields and imminent developments, Kate Broughton, head of oils research at Wood Mackenzie, told Reuters.

That is an annual average growth rate of around 1.25 percent, while OPEC capacity will rise even more quickly.

The study may put to rest immediate concerns over the oil industry's ability to cope with rapid demand growth in big consumers such as the United States and China, and highlights OPEC's weakening market power in coming years.

Against oil demand estimated to rise an average annual 1.8 percent up to 2015, non-OPEC output will force the cartel to hold back some 8 million bpd of capacity by early next decade, a factor that could send price down to $45, she said.

"Around that point (spare capacity) begins to tail off again," she added, which should revive oil to around $60 by 2025, in a repeat of the capacity crunch that caused a spike in 2004. It expects oil demand to grow an average 1.1 percent a year from 2015 to 2025.

Broughton estimated that Saudi Arabia would have the capacity to pump some 16 million bpd by 2025, up from 11.3 million bpd now, despite concerns raised several years ago that its huge but older reservoirs may struggle to pump more.

By 2025, Wood Mackenzie expects non-OPEC production to fall back to 47.2 million bpd, taking into account likely future discoveries and improved recovery at existing fields.

"It's a gradual decline," Broughton said.

Wood Mackenzie also estimated that fuel produced from biofuels, gas-to-liquids, coal-to-liquids and shale oil would account for about 7 percent of capacity by 2025.

4b/ Watch Frank Harris in this pre-recorded video Access to Gas, the LNG Industry's Big Challenge (Wood Mackenzie, April 2007)

http://www.woodmacresearch.com/cgi-bin/wmprod/portal/energy/energyPortal.jsp

Comment: Wood Mackenzie 13.5 minute video. The video warns of LNG shortages between now and 2010. Beyond 2011, shortages may get worse. Frank Harris also states that the International Oil Companies are exploring for gas more now because it is getting harder and harder to find decent sized oil fields! A very good overview of why LNG supplies are tight, about to get tighter.

Article: Watch Frank Harris, Head of Global LNG, in this pre-recording of his address given at LNG 15 April 24th. The paper entitled Access to Gas - The LNG Industry's Big Challenge was co-authored with Gavin Law, Head of Gas & Power Consulting and presented during the session - Commercialisation and Globalisation - Challenges and Opportunities of LNG's Emerging Global Reach.

With strong demand and abundant shipping and regasification capacity, the weak link in the LNG value chain increasingly looks like LNG supply – will there be enough supply available to meet demand?

In the short-to medium term, the big concern is whether the next wave of LNG plants can be developed on schedule, while in the longer-term, the big worry is whether the industry can access sufficient gas reserves to feed the LNG plants needed to meet forecast demand.

Therefore, in our opinion, the industry’s obsession with supply is justified. LNG supply is a big issue in the short, medium and long-term and we expect problems will LNG supply to constrain the growth of the industry.

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5/ Canada to Ban Incandescent Light Bulbs by 2012 (Planet Ark, Thu 26 Apr)

http://www.planetark.com/dailynewsstory.cfm/newsid/41556/story.htm

Article: Canada will ban the sale of inefficient incandescent light bulbs by 2012 as part of a plan to cut down on emissions of greenhouse gases, Natural Resources Minister Gary Lunn said Wednesday.

Canada is the second country in the world to announce such a ban. Australia said in February it would get rid of all incandescent bulbs by 2009.

"Making the switch to more efficient lighting is one of the easiest and most effective things we can do to reduce energy use and harmful emissions," Lunn told a news conference.

If households installed compact fluorescent bulbs -- which use about 75 percent less electricity than old-style bulbs -- they could save C$50 (US$44) a year, he said.

"By banning inefficient lighting, we can reduce our greenhouse gas emissions by more than 6 million tonnes per year," Lunn said.

The ban will not apply to uses where incandescent bulbs are still the only practical alternative.

The Canadian province of Ontario last week announced it would ban inefficient incandescent bulbs by 2012.

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6a/ Moscow backs Lukoil Iraq project (Financial Times, Tue 24 Apr)

http://www.ft.com/cms/s/0f90bf9c-f298-11db-a454-000b5df10621,_i_nbePage=83fca288-3039-11da-ba9f-00000e2511c8.html

Comment: Russian oil company LUKoil has been very busy the last two years in Iraq: “In the past two years Lukoil has spent $20m to train 1000-2000 Iraqi oil field engineers in Russian fields, put another 100 through Russian universities and provide equipment for Iraq’s oil industry.” LUKoil is getting ready-to-go. What have BP, ExxonMobil, Shell, Total been doing to match this?

Article: The Russian government is throwing its full support behind Lukoil’s ambition to become the first big international energy group to develop a major Iraqi oil field following the 2003 US invasion.

Vagit Alekperov, Lukoil’s chief executive, said in an interview on Tuesday: “The Russian government supports us, the foreign ministry supports us, the president of the federation supports us. They support the idea of putting those Iraqi fields [into production] as soon as possible. In all these areas we have the support of the Russian government.”

He added that Lukoil would be able to develop the West Qurna field two to three times more quickly than any other company. “We are ready to move really fast,” he said. “The situation in South Iraq is pretty stable and we have no problem starting operations right after the passage of the hydrocarbon law and once we have the necessary approvals,” he said. Iraq’s parliament aims to pass the law by the end of next month.

West Qurna is believed to hold as many as 11bn-15bn barrels of recoverable oil reserves and has a potential to produce as many as 1m barrels a day, making it one of the world’s biggest fields.

International energy companies such as ExxonMobil, Royal Dutch Shell and BP have been waiting for the security situation in Iraq to improve before developing fields, and analysts believe the situation in the Shia-dominated region close to the southern port of Basra where West Qurna is located is far from predictable.

But at least one US company would benefit if Iraq’s oil ministry assigned the development of West Qurna to Lukoil. In 2004 ConocoPhillips, the US’s third largest energy group, formed a strategic partnership with Lukoil in which the US company gradually expanded its stake to just shy of 20 per cent. At the time of the announcement, the companies noted the eventually development of West Qurna as one of their motives for the deal.

… In the past two years Lukoil has spent $20m to train 1000-2000 Iraqi oil field engineers in Russian fields, put another 100 through Russian universities and provide equipment for Iraq’s oil industry…

6b/ Another 100 billion barrels of oil found in Iraq? (The Oil Drum, Sun 22 Apr)

http://europe.theoildrum.com/node/2480#more

Comment: Last week (18^th April) the Financial Times announced a report by IHS that there were, maybe, over 200B barrels of oil in Iraq, see Iraq may hold twice as much oil. ‘Jerome a Paris’ over at The Oil Drum covered this issue last Sunday. The only point I think I would disagree with is: <<no money will be invested (as opposed to "deals of the century" mooted, announced or even signed) as long as the civil war rages, i.e. for a bit longer than American forces will be in the country >>. Russians have a different way of working from the ‘Western’ International Oil Companies. LUKoil has just announced it is to develop the West Qurna deposit, containing an estimated 11-15 billion barrels of crude oil - see item 6a, which leaves little doubt that they intend to go in soon. They would not be spending so much money training Iraqi technicians/engineers otherwise.

Article: I actually went to the website of IHS and found the underlying press release. It's transparently an attempt to sell their maps to oil producers seeking new oil fields. While IHS is a respected player in the industry, and is known to have one of the most extensive proprietary databases on world oil fields, it is a lot harder to gauge the reliability of this new publication. Iraq has been largely inaccessible and unexplored for most of the past 25 years, and the situation has not really changed in the past few years... While I have no doubt that IHS has been able to put its hands on data on known oil fields, I just don't see how their number for additional resources is anything other than a marketing coup based on wild-assed guesses, as they themsleves admit…

And of course, as the FT article above notes (those innocuous *if* I bolded), and as I have pointed out before in my comments on the new Iraqi oil law (see this story here on TOD: New Iraqi oil law: some facts on PSAs), there is the small issue of the lack of security and, more importantly, the lack of legitimacy of the current government, which makes it certain that

- no money will be invested (as opposed to "deals of the century" mooted, announced or even signed) as long as the civil war rages, i.e. for a bit longer than American forces will be in the country;
- any contract signed today will be re-negotiated in full when a new regime finally emerges.

Did Bush and Cheney genuinely expect a "cakewalk"? Are they just playing a cynical game to deny oil to the market (in the short term) and to preserve the biggest untapped reserves on the planet (in the long term)? Did they simply expect to get US companies to replace the French and the Russians that were sniffing around Iraq's oil fields under Saddam Hussein? I'm not sure we'll know that any time soon, but it's certain that this oil will attract the attention of all oil players for as long as it's there, and will allow smart players like IHS to sell a portion of the dream. And as it's likely to remain there for a while, expect more breathless announcements...

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7/ ANALYSIS - Mumbai shortages highlight India power crunch (Reuters, Thu 26 Apr)

http://in.today.reuters.com/news/newsArticle.aspx?type=topNews&storyID=2007-04-26T181245Z_01_NOOTR_RTRJONC_0_India-295746-1.xml

Comment: There have been several articles of late covering the natural gas shortages in India. Because of its commercial importance, difficulties with energy supplies in Mumbai suggest difficulties everywhere. India’s gas problems would be less severe, if not temporarily solved, if they were willing to pay more to import Iranian natural gas by pipeline and LNG.

Article: India's financial hub of Mumbai is threatened with its first power cuts in decades, underscoring the depth of a power crisis that is crimping the country's economic potential.

Mumbai, which aims to be a global financial centre, might have cobbled enough supply together to keep its air-conditioning and fans on for now and avoid the hours of blackouts suffered daily by its outlying areas, as well as other towns and cities.

But to highlight the problem's urgency, power supplier Tata Power Co. Ltd has urged Mumbai citizens to cut down air-conditioning use, change light bulbs and put computers on sleep mode to conserve energy.

"This is a wake up call for India. This city was long an island of stability," said V. Raghuraman, energy adviser to the Confederation of Indian Industry (CII).

"It shows India's piecemeal strategy for dealing with power shortages can't go on forever."

India, which has a population of 1.1 billion and rising, has suffered power shortages for years, especially in the peak summer months when temperatures in some parts of the country can reach more than 45 degrees celsius.

But an economy which has grown at about 9 percent for two years and an expanding middle class are hotting up demand for electrical goods as well as malls, air-conditioned homes and offices, which are springing up across the country.

Even New Delhi is not immune to long cuts, forcing the city's chief minister to threaten power firms with fines. IT hub Gurgaon suffers up to four hours a day of cuts that have sparked protest from residents.

In Kolkata, two million customers live without power for up to eight hours a day, worse than two to three hours of previous years. Villages often spend half the day cut off as their power share gets diverted to factories and offices.

"This in an annual problem, but this year the problem has been even more acute," said Harry Dhaul, of the Independent Power Producers Association of India.

... But new projects may not be able to cope with soaring demand, growing at 8-9 percent a year. The government plans to add more than 78,500 megawatts of power generation capacity by 2012 on top of India's current 85,000 MW capacity per year.

India's total installed capacity is more than 128,000 MW, but only three-quarters of that is available at any given time, with per capita consumption at 615 kilowatts per hour, a quarter of the global average.

... "In the next 25 years, even if we are able to raise our installed capacity by five to six times, the shortage situation would continue," said R.V. Shahi, a former federal power official.

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8/ Egypt weighs domestic energy needs as export demands grow (Financial Times, Tue 17 Apr)

http://www.ft.com/cms/s/abbfeb72-ec80-11db-a12e-000b5df10621.html

Comment: Going in to some detail about why Egypt’s natural gas consumption is rocketing, the gist of the article is that several countries that are either natural gas exporters or have decent reserves, are facing shortages due to phenomenal growth in domestic consumption.

“All four [United Arab Emirates, Oman, Kuwait and Saudi Arabia] could eventually face gas shortages, according to Wood Mackenzie, as they seek to sustain development plans.” The UAE, Kuwait and Oman I thought were facing shortages already.

Article: In the centre of Helwan town, a 20km drive south of one of Cairo's more affluent suburbs, a large factory spews huge puffs of grey dust into the sky, making it difficult to distinguish clouds from haze.

The Helwan plant was built years ago but new, similar factories have sprung up as economic reforms attract foreign investment.

The cement sector has been one of Egypt's success stories, transforming the country from a net importer to the world's eighth largest exporter in 2005.

... The growth of these industries has coincided with rising domestic demand for gas, putting a huge burden on the treasury as energy subsidies have swelled from E£1.2bn ($220m, €162.8m, £110.8m) in 1999 to E£42bn, according to figures on a government website.

... In recent weeks - after a temporary moratorium - the trade ministry has approved licences to 25 new cement factories and three steel companies. About six companies, including Australian, Chinese and Canadian concerns, are also seeking to set up aluminium smelters - which are even more energy intensive - in the country.

... Colin Lothian, an analyst at Wood Mackenzie, says the United Arab Emirates, Oman, Kuwait and Saudi Arabia are among those who will have to consider whether they have the proven resources both to fuel new industries and cater for growing domestic consumption.

All four could eventually face gas shortages, according to Wood Mackenzie, as they seek to sustain development plans.

In the late 1990s Oman, believing it had ample gas resources, encouraged the establishment of fertiliser plants and an aluminium smelter, but today faces a supply-demand gap, Mr Lothian says, as development of new gas supplies failed to live up to expectations.

Qatar, which boasts some of the world's largest known gas reserves, recently announced a moratorium on the development of gas projects from its North Field until it completes a review to assess its reserves.

In Saudi Arabia, a petrochemicals project has stalled due to a lack of gas supply, Mr Lothian says...

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9/ The Honeymoon's Over for Bush and the Saudis (The Washington Post, Sun 29 Apr)

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/27/AR2007042702054_pf.html

Article: What has happened to the love affair between Saudi Arabia's King Abdullah and President Bush? Two years ago, down on the Texas ranch, they were photographed walking hand in hand. It was the beginning of a beautiful relationship: Bush dropped his demand for democratization in the puritanical kingdom, and Abdullah did his best to moderate oil prices. The dowry was a new U.S. arms deal for the Saudis. A second honeymoon was scheduled for this month, when Bush planned to host Abdullah for his first state visit.

So the White House was mightily perplexed when it was informed that the king's schedule didn't allow for a spring visit to Washington. Then, at an Arab League summit in Riyadh last month, Abdullah denounced the U.S. war in Iraq as an "illegitimate occupation." He also used the occasion to make up with Bush's bete noire, Bashar al-Assad, the brash Syrian president who had previously denounced the Saudi leader as "a dwarf."

What was going on? Simply put, the Bush administration had been listening to the wrong Saudi. Keen for any signs of hope in the region as Iraq spiraled downward, Bush, Secretary of State Condoleezza Rice and other senior U.S. officials had grasped at a grandiose regional game plan being pushed by Prince Bandar bin Sultan, formerly the Saudi ambassador in Washington and now Abdullah's national security adviser. But Bandar wasn't calling the shots; Abdullah was, and he has a very different way of doing business.

... If Bush wants to rekindle the U.S.-Saudi love affair, he needs to deal with the Saudi leader we have, not the one we'd like.

That needn't mean total despair on the Arab-Israeli front. Peace with Israel is essential to Abdullah's anti-Iranian game plan because Tehran exploits the conflict to build its influence in the Arab world. But the Saudi king is not going to get into bed with Israel for a mere photo op. Abdullah will be ready to go to Washington -- and, eventually, perhaps even to Jerusalem -- when Bush, Rice and Olmert signal that they will accept his terms for a comprehensive Arab-Israeli settlement.

His opening price is Bush's accommodation of Hamas and Syria as players in the peace process, and he'll settle in the end for Israel's withdrawal from the Golan Heights and the West Bank. If Bush wants that second honeymoon with Abdullah, he is going to have to renegotiate the terms of endearment.

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10/ Norwegian authorities fear steep crude decline (Energy Bulletin, Mon 23 Apr)

http://www.energybulletin.net/29073.html

Article: This is a direct quotation by Norwegian Oil Director Mr. Gunnar Berge from the Foreword to Facts - The Norwegian Petroleum Sector - 2007 (220-page PDF) published by the Norwegian Ministry of Petroleum and Energy on Friday, April w0:

Forecasts show that gas production is rising while oil production is declining. The number of exploration wells increased significantly in 2006 compared with the previous year, but only six new discoveries were made. These were made in four wellbores. This is figures for reflection [stet]. If we are to achieve the development that we want, with only a slow and gradual decline, serious efforts must be made in several areas.

(page 8)

What is the Norwegian Oil Director actually predicting here?

He is establishing "a slow and gradual decline" as a best case scenario for Norway, concluding that "serious efforts must be made in several areas" to achieve it. The alternative scenario? Steep decline.

Contrary to natural gas, Norwegian crude production has actually been in decline since 2001, but far from acknowledging Hubbert's Peak, the tune from the authorities has up till now been something like "maybe we will be on the increase again next year, due to our investments and many nice enhanced oil recovery (EOR) techniques." Now Hubbert's Peak is finally official in Norway - and the decline will at best be slow and gradual.

While the crude production forecast for 2007 is about 130 million standard cubic metres, the Norwegian crude reserves now officially stands at about 1 billion, reduced by nearly 15 percent only last year. Very little new oil will be coming on stream during the next few years due to minor discoveries. Under such circumstances, with an R/P* of 7-8 years, who can really believe in "a slow and gradual decline" ?

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