General Interest - Quick Takes EU-Russia summit delegates look to next meeting

A summit between Russia and members of the European Union, held Nov. 14 in Nice, France, was seen as an opportunity for EU members to resume negotiations on furthering EU-Russia pacts on economic, energy, and security issues.

Talks occurred despite Russia's not fully complying with its commitment to fully restore the territorial integrity of Georgia following its August attack on that country. The EU had postponed negotiations when the conflict in Georgia broke out. Negotiations, in fact, had not resumed at the summit but are slated to begin again Dec. 2.

The summit talks mostly were used by delegates for what French President Nicolas Sarkozy referred to as "pan-European security" as well as for smoothing out the many "irritants" that have recendy cropped up.

These irritants included Russia's threat to deploy missiles in Kaliningrad, a Russian enclave between Lithuania and Poland, to counter the US antimissile sytem in countries bordering Russia, Poland, and the Czech Republic.

Also attending the summit with President Sarkozy, who also serves as EU president until yearend, were Russian President Dmitri Medvedev, Commissioner for External Relations and European Neighborhood Policy Benita Ferrero-Waldner, and Trade Commissioner Catherine Ashton.

European security matters would be discussed further at a meeting in mid-2009 within the framework of the Organization for Security and Cooperation in Europe.

House Dems won't try to restore OCS moratoriums

US House Democratic leaders will not try to reimpose offshore oil and gas leasing moratoriums that expired at the end of September, Majority Leader Steny H. Hoyer (D-Md.) said on Nov. 18.

There probably will be attempts to delineate where leasing will take place, he told an authence at the National Press Club. "I do not believe at this point that there are any proposals being made to reinstate the moratoriums across the board," Hoyer said.

His remarks came a day after US Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) said the US needs an intelligent policy to promote more domestic oil and gas production, both onshore and offshore.

"That production has to be undertaken in an environmentally responsible way, and with recognition that multiple users and stakeholders are involved," Bingaman said in remarks at the Center for Strategic and International Studies on Nov. 17.

Bingaman suggested that congressional moratoriums on Outer Continental Shelf leasing began in the early 1980s as a reaction to what he described as "a large and ill-conceived offshore leasing effort" by James G. Watt, former US President Ronald Reagan's first Interior secretary. "I hope that we are smarter and more strategic this time in how we go about dealing with offshore oil and gas resources," he said.

Bingaman said the next step might be "a serious and expeditious inventory" of OCS energy resources. Congress called for an OCS inventory in the 2005 Energy Policy Act but never provided funding to carry it out, he noted.

"Major energy development projects require a steady strategy and steady investments over the long term, so they need to be based on a stable political consensus that isn't reversed every few years. That means that our energy decision-making on the [OCS] , as well as onshore, needs to be based on the best data we can collect on both the energy and environmental characteristics of potential areas for production. Getting that data on a priority basis will greatly increase the chances that we will make energy supply choices that will be sustainable economically, environmentally, and politically," Bingaman said.

Responding to Hoyer's comment, the American Petroleum Institute said that it is the right approach. "Neither Congress nor the next administration should set unreasonable, arbitrary limits on leasing because such restrictions could remove some of the nation's most promising oil and gas prospects for development, and the industry has proven it can develop these resources in an environmentally safe manner," it said in a Nov. 18 statement.

In his prepared remarks, Hoyer said the first focus of the next Congress will be to restore US economic health by rebuilding worn- out infrastructure, helping hard-pressed states and demonstrating fiscal responsibility.

IOGCC chair calls for bipartisan efforts

Oklahoma Gov. Brad Henry assumed the chairmanship of the Interstate Oil & Gas Compact Commission by calling upon US lawmakers to work together toward providing policies to ensure stable, sustainable energy supplies.

"It's more critical now than ever before that we work together in a bipartisan manner," Henry said in addressing the IOGCC annual meeting Nov. 17 in Santa Fe, NM. He took over as chairman when Alaska Gov. Sarah Palin's term as IOGCC chair ended. Palin, formerly the Republican vice-presidential candidate, did not attend the meeting.

Henry noted how public clamor about energy dies when oil and gasoline prices decline as they have in recent weeks. But he said energy still needs to be a national priority, and that energyproducing states should help steer the direction of energy policy.

"Nearly 70% of our nation's oil comes from foreign sources," Henry said. "The goal of energy independence is too complex to believe that renewables alone will be the solution."

Marathon Oil Corp. Chairman and Chief Executive Officer Clarence Cazalot said the world faces an energy transition in learning how to deal with the long-term fundamentals of growing global energy demand in the face of constrained energy supplies.

Cazalot called for the US to develop "a comprehensive, factbased energy plan integrated with climate change" concerns. "All energy sources are going to become increasingly important components of any energy plan," Cazalot said. Nonetheless, he said fossil fuels will dominate world energy supplies through 2030.

The energy plan needs to include efficiency and conservation, diversified energy supply, and the development of new technology, he said.

EIA: OPEC production dropped in October

The Organization of Petroleum Exporting Countries produced a total of 32.3 million b/d of crude oil in October, down 100,000 b/d on month, according to the US Energy Information Administration.

EIA estimated OPEC's production capacity to be 34.24 million b/d and its spare production capacity to be 1.93 million b/d.

It said OPEC's 12 producers, excluding Iraq and Indonesia, produced 29.13 million b/d in October, and exceeded the organization's output target of 28.8 million b/d by 330,000 b/d.

Although Angola increased production, Indonesia, Nigeria, Qatar, Saudi Arabia, and Venezuela all saw declines. Production remained steady in Algeria, Ecuador, Iran, Iraq, Kuwait, Libya, and the UAE.

EIA projects that OPEC crude production will drop even further to 31.3 million b/d in first quarter 2009, where it will remain relatively stable through yearend 2009.

In terms of revenues, EIA said OPEC could earn $979 billion of net oil export revenues in 2008, and $595 billion in 2009. EIA did not explain the substantially reduced earnings projection for 2009.