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Greek Cypriot Navy patrol boats
Navy patrol boats belonging to the Greek Cypriot government would likely find themselves in conflict with their Turkish counterparts in any dispute over who owns the rights to offshore oil and gas reserves around the island. Photo courtesy of the GreekMilitary.net.

Oil Row Simmering in Cyprus

World Energy Review for the Week Ending 10 February 2007

By EV World

OIl Trouble Bubbling in Cyprus
As if the turbulent eastern Mediterranean didn't have enough to worry about politically, there's the possibility that Greece and Turkey could start feuding again over Cyprus, an enclave divided between Greek Cypriots and Turkish Cypriots. Tensions have flared into open violence in the past in the early 60's and again with a civil war in 1974.

Since then, the island off the coast of Syria and Turkey has been a haven for refugees fleeing conflict in neighboring Lebanon and a neutral transition point for travel between the region's Arab nations and Israel.

Now the Greek-controlled half of the island is claiming it controls all the offshore oil and gas rights around the entire island, not that there appears to be any discoveries yet: call it "pre-emptive discoveries". Since Greece is a member of the European Union and Turkey a part of NATO, any tensions on Cyprus is of concern to the EU.

According to ODAC newsletter editor Doug Low, Greek Cypriot government has reached some sort of agreement with both Lebanon and Egypt on joint development of any oil and gas reserves may be found offshore of Cyprus.

"I can't imagine this breaking out into actual war, " Low told EV World publisher Bill Moore. "But I am sure this is a story we'll hear more of in the coming year."

Global Coal Use Growing
Coal may yet be resume the title "King" it once owned a century ago as the world looks increasingly to this abundant, but environmentally dirty energy source; and no nation more than China, which it purportedly building an average of one new coal-fired power plant a week. China's appetite for coal is such that it is likely to become a net importer of coal by 2007. That does not bode well for the people of China or for everyone else on the planet.

But China isn't alone in its lust for coal. England imports 80% of its coal today. Even Senator Obama, who just announced he will be seeking the U.S. Presidency in 2008, supports coal-to-liquid plants, despite the fact that there are currently no efforts to sequester the CO2 from coal anywhere in the world, and only a handful of demonstration projects using CO2 to extend the life of aging oil fields.

Low explained that the two main alternatives to oil and gas, which are depleting is coal and uranium, the latter to generate nuclear power for electricity generation. He pointed out that globally, coal use is increasing by 5 percent per year. That means, at current rates, we will have doubled our consumption of coal in 14 years and increased it by a factor of ten in 50 years. That is clearly unsustainable geologically and environmentally. In effect, the more we turn to coal, even with CO2 sequestration and "clean coal" technology, which currently doesn't exist and may never exist since there are no economic incentives for companies to invest in either, the faster we'll use it up.

According to Congressman Roscoe Bartlett, if we decide to replace petroleum with coal-to-liquid synthetic fuels, the largely mythological 200 years of coal supply in America would be gone in just 40 years.

Canada's Exaggerated Tar Sands
As Mexico's huge Cantarell oil field crashes, America has to find more oil elsewhere to replace and increasingly, it's looking to its neighbor to the north and the tar sands of Alberta, which are currently producing about one million barrels a day of synthetic petroleum. With typical business boosterism, the ruling Tory government has been making all sorts of claims as to how much oil can be produced in the coming years, with numbers ranging from 3.1 mbd to 4.5 mbd by 2015.

The strategy that seems to be at play here is to get outsiders, especially the Chinese to invest in developing these resources.

The trouble is, the consensus within the industry is that output will be closer -- on average -- to 2.9 mbd by 2020, not 2015, said Low, quoting from a respected oil industry journal.

"Three million should be considered an upper limit, " Low asserted.

US Foreign Policy Roils Malaysia
U.S. foreign policy continues to seem to create more foes than friends. This time Uncle Sam has angered the normally-friendly government of Malayasia by insisting that it not do any deals with Iran after the two countries agreed to a joint project to develop a huge gas field that straddles the Iranian and Qatari sides of the Persian Gulf. Malayasia is only one of several Southeast Asian nations, including Pakistan and India who are desperate for natural gas to run their electric power generators.

Since the Bush Administration considers Iran part of the infamous "Axis of Evil", anyone doing deals with them is considering trading with the enemy, this despite allegations that Vice President Dick Cheney's former company, Halliburton sold as late a 2006 " key components for a nuclear reactor to an Iranian oil development company."

Oops!

Obviously, in light of this kind of dual standard -- duplicity might be a better term -- not everyone thinks Washington's foreign policy is all that enlightened or altruistic, including the Malaysians who have basically told Bush to stuff it. Thankfully, the Iran's themselves are growing increasingly disenchanted with their current political leadership, who seems to have about as much appreciation for history as his opposite number occupying 1600 Pennsylvania Avenue.

Pennsylvania Declares Energy Independence
And speaking of the Keystone State -- where I am proud to say I hunted my first deer, owned my first car, married my first (and only) wife and had our first child -- Governor Rendell has implemented a $850 million energy independence initiative. The program is intended to not only encourage investment in renewable energy, but also conservation, offering home owners help in replacing aging air conditioners and refrigerators with more efficient models.

The Patriot-News explained how the funds, which will be raised from bonds, paid for by taxes on electric power bills, will be utilized. "The $850 million plan suggests offering a number of incentives to encourage Pennsylvanians to replace energy-hogging appliances with modern and energy-efficient ones. It proposes to facilitate the spread and use of "smart meters" to allow time-of-day pricing on a voluntary basis. Also included are 50 percent rebates for rooftop solar photovoltaic panels, and new regulations to permit "microgrids," an exciting means of small-scale power and heat generation and distribution among neighbors."

For his part, Low isn't overly optimistic the plan will succeed, but he, like many others, see it as a good start and certainly focusing its efforts in the right areas.

To listen to our entire discussion, use either of the two MP3 Players above, or download the file to your computer hard drive for playback on your favorite MP3 player. You can also receive a free ODAC email newsletter that daily features the top energy news stories from around the world.

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Times Article Viewed: 8193
Published: 11-Feb-2007

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