-Here's another example of how energy costs are compacting the airline industry. We watch airlines go out of business, consolidate, cut routes and capacity. As we see the fares go up, we can kiss goodbye to mobility for the declining middle class.- RK
http://www.nytimes.com/2008/05/31/business/worldbusiness/31silverjet.html?scp=1&sq=loss+of+backer&st=nyt
May 31, 2008
Loss of a Backer Grounds a Business-Class Airline
By JULIA WERDIGIER
LONDON — Silverjet, the business-class-only airline, on Friday became the third such carrier to cease operations in the last six months, unable to cope with rising fuel costs or to attract new financing.
The British airline, one of four independent carriers that focused on flying business travelers across the Atlantic, suspended its service after 18 months. Its last flight touched down in London on Friday afternoon.
Silverjet, which flew from London to New York and Dubai, failed to receive a $5 million payment from the investment fund Viceroy Holdings, based in the United Arab Emirates, as part of a loan agreement, forcing about 9,500 people to rebook flights with other airlines.
In a letter to Silverjet customers, chief executive Lawrence Hunt apologized and said he was “working actively with new investors” to restart the service.
But Geoff Van Klaveren, an analyst at Exane BNP Paribas in London, said, “It will be difficult to secure new funding before the oil price comes down.”
He added: “Even airlines with the strongest balance sheets find their cash flow under pressure these days.”
But the appointed administrator for Silverjet, Begbies Traynor, said Friday that “a number of interested parties have already been in contact,” making the company confident that it can find a buyer.
Small business-class-only airlines mushroomed over the last two years, pledging to change the face of air travel by catering to a growing market of business passengers. But competition from larger network carriers and a record oil price that increased more than 40 percent over the last six months meant that airlines without strong financing started to run out of cash.
One Silverjet rival, Maxjet Airways, stopped flying in December and another, Eos Airlines, grounded its planes last month. L’Avion, a French privately owned airline, still flies between Paris and New York.
Andrew Fitchie, an airline analyst at Collins Stewart in London, said it was just a matter of time for the smaller business-class-only carriers to close down because they lack the economy of scale.
“It’s very difficult for the stand-alone operator without a large portfolio of offerings and a strong franchise to pull it off,” Mr. Fitchie said. “The high oil price has just precipitated their problems.”
That does not mean that the business-class-only concept is doomed, he said. Atlantic business class travel is the most lucrative for larger airlines, and as the likes of Silverjet dwindle, larger carriers started to adopt the all-business-class idea. British Airways, one of Europe’s biggest airlines, announced plans in February to start its own business-class-only flight from London to New York next year. Singapore Airlines started a similar service on May 17, and Deutsche Lufthansa operates such flights through a subsidiary.
Larger airlines are not immune to the increase of fuel prices, and some analysts predicted more companies would go out of business. British Airways said this month that higher oil prices were expected to contribute to a “particularly difficult” first quarter, and several carriers announced plans to eliminate routes, retire aircraft and raise fares. American Airlines, the world’s largest carrier, plans to cut thousands of jobs and added a $15 fee to check one bag.
Rising fuel costs also squeezed independent low-cost airlines. Oasis Hong Kong Airlines left thousands of passengers stranded when it ran out of money last month, and American carriers ATA Airlines, Aloha and Skybus Airlines also stopped flying.
Silverjet, based in London’s Luton airport, never made a profit and struggled to stay in business. The company had to suspend its shares from trading a week ago when the money did not arrive.
Mr. Hunt set up Silverjet with the help of his cousin Christopher Foyles of the British bookstore family empire after he had a string of disappointing experiences flying across the Atlantic. With money from an initial public offering, the airline started flying Boeing 767s with 100 flat-bed seats between Newark and London Luton airport in 2007 and added a route to Dubai in December.
Saturday, May 31, 2008
Fuel Costs Incite Protests by Fishermen in Europe - NY Times 053108
http://www.nytimes.com/2008/05/31/world/europe/31fuel.html?sq=protests%20by%20fishermen&st=nyt&scp=1&pagewanted=print
May 31, 2008
Fuel Costs Incite Protests by Fishermen in Europe
By ALAN COWELL
PARIS — Commercial fishermen across Europe carried out new protests on Friday against soaring fuel bills, blockading ports and refineries in France and handing out fresh fish in Madrid.
The protests against diesel fuel costs have been simmering all week, with truckers in Britain blocking highways and fishing vessels halting port traffic on the English Channel in France.
Outside a government ministry in Madrid, news agencies reported that hundreds of fishermen handed out 20 tons of fish to consumers from trucks loaded with the catch of Europe’s biggest fishing fleet. Spanish union leaders said the strike among fishermen had 100 percent support.
The Spanish government did not respond to the protests, and more trouble was on the way: Truck and taxi drivers were threatening a strike next week.
In Portugal, fishing fleets also stayed in port, and in one harbor, at Peniche, in central Portugal, skippers strung their boats together with mooring lines to prevent other vessels from unloading. Portuguese fishing boat owners, who employ about 21,000 people aboard almost 5,000 boats, were pressing their demands for government help by choking off the supply to markets.
The wave of strikes and protests has alarmed the European Union, which said on Friday that it was following the situation closely. But some officials ruled out fuel price subsidies and said the protests highlighted a deeper problem in the European fishing industry: too many fishing boats chasing dwindling stocks of fish.
Nearly 90 percent of species in Europe are overfished, European Union officials warned on Friday. Because of higher fuel costs, fleets are likely to try to catch more in coming months to make up for fuel-related losses, intensifying the problem.
In Italy, fishing unions claimed widespread support for a strike on Friday, while in France, where the protests have continued for more than two weeks, fishermen blocked the port of Le Havre.
Apart from lower fuel prices, the fishermen are demanding higher government subsidies.
May 31, 2008
Fuel Costs Incite Protests by Fishermen in Europe
By ALAN COWELL
PARIS — Commercial fishermen across Europe carried out new protests on Friday against soaring fuel bills, blockading ports and refineries in France and handing out fresh fish in Madrid.
The protests against diesel fuel costs have been simmering all week, with truckers in Britain blocking highways and fishing vessels halting port traffic on the English Channel in France.
Outside a government ministry in Madrid, news agencies reported that hundreds of fishermen handed out 20 tons of fish to consumers from trucks loaded with the catch of Europe’s biggest fishing fleet. Spanish union leaders said the strike among fishermen had 100 percent support.
The Spanish government did not respond to the protests, and more trouble was on the way: Truck and taxi drivers were threatening a strike next week.
In Portugal, fishing fleets also stayed in port, and in one harbor, at Peniche, in central Portugal, skippers strung their boats together with mooring lines to prevent other vessels from unloading. Portuguese fishing boat owners, who employ about 21,000 people aboard almost 5,000 boats, were pressing their demands for government help by choking off the supply to markets.
The wave of strikes and protests has alarmed the European Union, which said on Friday that it was following the situation closely. But some officials ruled out fuel price subsidies and said the protests highlighted a deeper problem in the European fishing industry: too many fishing boats chasing dwindling stocks of fish.
Nearly 90 percent of species in Europe are overfished, European Union officials warned on Friday. Because of higher fuel costs, fleets are likely to try to catch more in coming months to make up for fuel-related losses, intensifying the problem.
In Italy, fishing unions claimed widespread support for a strike on Friday, while in France, where the protests have continued for more than two weeks, fishermen blocked the port of Le Havre.
Apart from lower fuel prices, the fishermen are demanding higher government subsidies.
*Gates Warns China Not to Bully Region on Energy - NY Times 053108
This is significant. Buried on page 8 of the Saturday NY times was this. We're barely into the decline and already the threats and warnings start.
http://www.nytimes.com/2008/05/31/world/asia/31gates.html?_r=1&scp=1&sq=bully+neighbors+over+energy&st=nyt&oref=slogin
May 31, 2008
Gates Warns China Not to Bully Region on Energy
By ERIC SCHMITT
SINGAPORE — Defense Secretary Robert M. Gates issued a set of thinly veiled warnings to China on Saturday, cautioning that it could risk its share of further gains in Asia’s economic prosperity if it bullied its neighbors over natural resources in contested areas like the South China Sea.
Three years ago at the same lectern here, Mr. Gates’s predecessor, Donald H. Rumsfeld, bluntly criticized China’s swift military buildup. Last year Mr. Gates struck a more conciliatory tone, saying Beijing and Washington had a chance to “build trust over time.”
Mr. Gates seemed to take a third approach in his remarks to a major regional Asia security conference here, seeking to lay down clear markers of continued American commitments to the region while also obliquely criticizing China.
He said that in his four trips to Asia since becoming defense secretary 18 months ago, several countries had expressed concern about “the security implications of rising demand for resources” (translation: China’s voracious quest for new sources of energy) and about “coercive diplomacy” (translation: China’s contested claims of resource-rich territorial waters).
Mr. Gates said there were rewards for playing by an international set of rules in a transparent way. “We should not forget that globalization has permitted our shared rise in wealth over recent decades,” he said. “This achievement rests above all on openness: openness of trade, openness of ideas, and openness of what I would call the ‘common areas’ — whether in the maritime, space, or cyber domains.”
The secretary specifically praised Beijing twice, noting that he had recently set up a telephone hot line with his Chinese defense counterpart and that the American-backed, six-party negotiations intended to temper North Korea’s nuclear ambitions “would not be possible without China’s valued cooperation.”
Otherwise, Mr. Gates spoke in a diplomatic code that his senior aides said would be clearly understood not only in Beijing but also in other Asian capitals and by the hundreds of security experts attending the annual regional conference sponsored by the International Institute for Strategic Studies.
Mr. Gates and his aides had debated just how blunt he ought to be in his address, which opened the Saturday session. In the end, aides said, he accepted the argument that taking a more direct approach would play to Beijing’s advantage and that a subtler, more indirect tack would win more support among Asian allies.
In the speech he recalled disputes in the mid-1990s between China and its neighbors over competing boundary and resource claims in the South China Sea, tensions that have resurfaced among China, Vietnam, Indonesia and Malaysia.
“We urged then, as we do today, the maintenance of a calm and nonassertive environment in which contending claims may be discussed and, if possible, resolved,” he said.
Mr. Gates, as he did last year at the conference, said that the United States “seeks more openness in military modernization in Asia. Transparency enhances confidence and reduces competitive spending.”
He also delivered a scolding reference to China’s unannounced destruction of a satellite in January 2007 when he described how the Pentagon handled a similar situation much differently in February, alerting others before shooting down a failing satellite over the Pacific just before it tumbled uncontrollably to Earth carrying toxic fuel.
Lt. Gen. Ma Xiaotian, deputy chief of the general staff of China’s People’s Liberation Army, pushed back during his speech, saying that China was not engaged in an arms race and that its military spending, compared with other sectors of its economy, was “limited and proportional.” In a clear reference to America’s plan to build missile defense systems, General Ma said deploying such defenses “was not helpful” to regional stability.
Mr. Gates made clear that central to the Bush administration’s Asia policy is maintaining American military might and economic sway in the region.
Indeed, Mr. Gates’s first stop on his weeklong visit to Asia was to Guam, where he took a helicopter tour on Friday to review Pentagon plans to spend $15 billion over the next six years to upgrade and expand World War II-era installations to accommodate thousands of additional American troops, and to broaden training missions with regional partners like Japan.
He said Saturday that Washington’s policy also focused on empowering regional allies to defend themselves by strengthening their armed forces and by building more robust economies and open political systems.
This policy is almost sure to endure no matter which party wins the White House in the November election, he said.
He showed an unusual flash on anger in response to a question after his speech about American efforts to deliver relief to cyclone victims in Myanmar, saying the United States has tried 15 times to get the Burmese leadership to allow more foreign assistance, but to no avail.
“We have reached out, they have kept their hands in their pockets,” he said.
http://www.nytimes.com/2008/05/31/world/asia/31gates.html?_r=1&scp=1&sq=bully+neighbors+over+energy&st=nyt&oref=slogin
May 31, 2008
Gates Warns China Not to Bully Region on Energy
By ERIC SCHMITT
SINGAPORE — Defense Secretary Robert M. Gates issued a set of thinly veiled warnings to China on Saturday, cautioning that it could risk its share of further gains in Asia’s economic prosperity if it bullied its neighbors over natural resources in contested areas like the South China Sea.
Three years ago at the same lectern here, Mr. Gates’s predecessor, Donald H. Rumsfeld, bluntly criticized China’s swift military buildup. Last year Mr. Gates struck a more conciliatory tone, saying Beijing and Washington had a chance to “build trust over time.”
Mr. Gates seemed to take a third approach in his remarks to a major regional Asia security conference here, seeking to lay down clear markers of continued American commitments to the region while also obliquely criticizing China.
He said that in his four trips to Asia since becoming defense secretary 18 months ago, several countries had expressed concern about “the security implications of rising demand for resources” (translation: China’s voracious quest for new sources of energy) and about “coercive diplomacy” (translation: China’s contested claims of resource-rich territorial waters).
Mr. Gates said there were rewards for playing by an international set of rules in a transparent way. “We should not forget that globalization has permitted our shared rise in wealth over recent decades,” he said. “This achievement rests above all on openness: openness of trade, openness of ideas, and openness of what I would call the ‘common areas’ — whether in the maritime, space, or cyber domains.”
The secretary specifically praised Beijing twice, noting that he had recently set up a telephone hot line with his Chinese defense counterpart and that the American-backed, six-party negotiations intended to temper North Korea’s nuclear ambitions “would not be possible without China’s valued cooperation.”
Otherwise, Mr. Gates spoke in a diplomatic code that his senior aides said would be clearly understood not only in Beijing but also in other Asian capitals and by the hundreds of security experts attending the annual regional conference sponsored by the International Institute for Strategic Studies.
Mr. Gates and his aides had debated just how blunt he ought to be in his address, which opened the Saturday session. In the end, aides said, he accepted the argument that taking a more direct approach would play to Beijing’s advantage and that a subtler, more indirect tack would win more support among Asian allies.
In the speech he recalled disputes in the mid-1990s between China and its neighbors over competing boundary and resource claims in the South China Sea, tensions that have resurfaced among China, Vietnam, Indonesia and Malaysia.
“We urged then, as we do today, the maintenance of a calm and nonassertive environment in which contending claims may be discussed and, if possible, resolved,” he said.
Mr. Gates, as he did last year at the conference, said that the United States “seeks more openness in military modernization in Asia. Transparency enhances confidence and reduces competitive spending.”
He also delivered a scolding reference to China’s unannounced destruction of a satellite in January 2007 when he described how the Pentagon handled a similar situation much differently in February, alerting others before shooting down a failing satellite over the Pacific just before it tumbled uncontrollably to Earth carrying toxic fuel.
Lt. Gen. Ma Xiaotian, deputy chief of the general staff of China’s People’s Liberation Army, pushed back during his speech, saying that China was not engaged in an arms race and that its military spending, compared with other sectors of its economy, was “limited and proportional.” In a clear reference to America’s plan to build missile defense systems, General Ma said deploying such defenses “was not helpful” to regional stability.
Mr. Gates made clear that central to the Bush administration’s Asia policy is maintaining American military might and economic sway in the region.
Indeed, Mr. Gates’s first stop on his weeklong visit to Asia was to Guam, where he took a helicopter tour on Friday to review Pentagon plans to spend $15 billion over the next six years to upgrade and expand World War II-era installations to accommodate thousands of additional American troops, and to broaden training missions with regional partners like Japan.
He said Saturday that Washington’s policy also focused on empowering regional allies to defend themselves by strengthening their armed forces and by building more robust economies and open political systems.
This policy is almost sure to endure no matter which party wins the White House in the November election, he said.
He showed an unusual flash on anger in response to a question after his speech about American efforts to deliver relief to cyclone victims in Myanmar, saying the United States has tried 15 times to get the Burmese leadership to allow more foreign assistance, but to no avail.
“We have reached out, they have kept their hands in their pockets,” he said.
Friday, May 30, 2008
Irate Europeans Protest the Soaring Price of Gasoline - 053008 NYT
http://www.nytimes.com/2008/05/30/business/30fuel.html?sq=irate%20europeans&st=cse&scp=1&pagewanted=print
May 30, 2008 - NY Times
Irate Europeans Protest the Soaring Price of Gasoline
By KATRIN BENNHOLD
PARIS — Marie Schneberger has always been thrifty about gasoline. The high price of filling up made it prohibitively expensive for Ms. Schneberger, a middle-income airline employee, to own anything bigger than a Fiat subcompact.
But with prices surging past 1.40 euro a liter in France (about $8.20 a gallon), Ms. Schneberger’s old economies have proved insufficient. So, she recently started taking the Métro to work and splitting the use of her car with two other women, to share fuel costs.
Gas prices that make drivers queasy at the pump are a relatively new occurrence in the United States, but persistently high prices forced Europeans to curtail their fuel consumption long ago. (In many countries, government taxes account for more than half the price.)
Highways are filled with fuel-efficient Smart cars and Minis, most cities have highly developed public transportation systems, and green-minded policies have spawned everything from special bicycle lanes to downtown congestion charges. Now the current surge in the price of oil has many Europeans asking how much leaner they can become.
“This concerns everyone who drives,” Ms. Schneberger said. “And that makes a lot of angry people.” Indeed, protests broke out across the Continent this week as irate port workers clashed with the riot police in Marseille and truckers stopped traffic in London to demand government fuel rebates. On Thursday, the protests spread to truckers in the Netherlands and French farmers blocked the entrance to oil depots. Italian and Spanish fishermen were planning strikes for Friday.
Less audible, but no less angry, are French nurses fretting about the cost of making home visits in their cars, Italian travel agents worried about fueling tour buses, and families from Madrid to Moscow who are leaving their cars at home or reducing spending in other areas.
European governments, already under pressure from slowing economic growth and falling tax revenue, are increasingly concerned the anger could grow. On Tuesday, faced with furious truckers, President Nicolas Sarkozy of France called for the European Union to cap fuel taxes — a proposal immediately rejected by other countries that count on the income to bolster their budgets.
The problem in Europe is that the upsurge has come faster and harder than in previous cycles. For instance, the cost of a liter of unleaded gasoline surged 17 percent in the last 12 months in Britain, 15 percent in Austria and 8 percent in France.
Prime Minister Gordon Brown of Britain, a major opponent of the Sarkozy proposal, warned that the world was facing an oil shock. His solution was to persuade governments around the world to take coordinated global action to mitigate price increases.
Britain, which has Europe’s highest fuel consumption taxes, granted licenses Wednesday for two new North Sea oil fields.
But as protesters and industry groups press for immediate tax breaks, analysts, European officials and consumer groups are concerned that artificially lowering prices would only engrain a consumption pattern that is not sustainable.
Instead, they say, politicians should provide long-term incentives to reduce fuel use and increase energy efficiency. The European Commission said Thursday that short-term relief should be narrowly focused on the poorest families, and warned European Union states not to provide tax relief to interest groups.
In Germany, Europe’s largest economy, the Federation of German Consumer Organizations is lobbying the government to invest 5 billion euros in public transportation and to allocate 10 billion euros in subsidies to households that install energy saving devices.
“Dealing with the issue through taxes is not the solution,” Holger Krawinkel, director of the federation’s energy department, said Thursday. “We need a serious commitment to investing in energy saving schemes.”
Such incentives to reduce consumption have worked in the past. Fuel taxes imposed after an oil shock in the 1980s are the main reason Europe has a vastly more fuel-efficient car fleet than the United States, said Lawrence Eagles, chief market analyst at the International Energy Agency.
But greater energy efficiency in Europe has also made it harder for Europeans to make further substantial improvements, analysts say.
Yet, the latest price shock has reignited the trend. Moshiur Rahman, a 28-year-old newspaper vendor in London, said higher fuel prices meant that he could no longer afford to drive to work. He now travels more than an hour by train every day.
“I have been sharing a car with a friend but it has just become too much money,” he said.
In Warsaw, where gas prices are nearing 5 zloty ($2.31), a liter, Leszek Tumkiewicz tries to leave his Polonez — a fuel-intensive communist-era car — at home. “I drive a lot but I also try to be fond of the Warsaw Metro,” said Mr. Tumkiewicz, 50, a business consultant who lives 12 miles from the city center.
Higher gas prices have prompted motorists to look for the best possible deal around. Drivers in Northern Ireland are making the trip south to fill their tanks in the Republic of Ireland, where fuel duties are considerably lower.
Not everyone is able to find cheaper fuel or reduce their driving. In Milan, Marco Germani, a self-employed salesman who is constantly on the road, said he had no choice but to pay up. “Unfortunately there is nothing I can do about it because I need to use the car for work,” he said.
Particularly in rural areas, where public transport is more limited, high energy costs take their toll elsewhere. Analysts call it the “Starbucks effect” — a decline in discretionary consumption in response to higher fuel bills.
The effect is hard to measure, especially because many products have increased in price as a result of rising transportation costs. In Spain, for example, where gasoline costs 1 to 1.25 euros a liter, many consumers are grumbling more about the accompanying rise in grocery bills than the price at the pump.
Even in Russia, one of the world’s largest oil producers, consumers have cut back spending and demonstrations by disgruntled drivers have erupted after prices at the pump rose by more than 7 percent from a year ago.
“The prices are nightmarish,” said Arutsun Hachaturyan, the manager of a jewelry business, who said he pumps about $1,200 in gas a month into his black Range Rover. “This is Russia,” he said, while filling his tank at a Moscow gas station. “We live on oil.”
The only solution, said Ms. Schneberger, the airline worker in Paris, is to “become less dependent on oil.”
But as fears of high energy costs merge with broader concerns about slipping standards of living, the calls for tax cuts are growing louder, suggesting that farmers, truckers and fishermen may end up with broader support in the general public.
In London, for instance, expectations of government tax cuts are high. Julian Popa, the manager of a hauling company, said he had not yet raised the prices he charges customers because “we’re waiting for the government to do something like reducing the levy or subsidize” oil.
Reporting was contributed by James Kanter from Brussels, Judy Dempsey from Berlin, Eamon Quinn from Dublin, Julia Werdigier from London, Michael Schwirtz from Moscow, Carter Dougherty from Warsaw, Eric Sylvers from Milan, Dan Bilefsky from Paris and Dale Fuchs from Madrid.
May 30, 2008 - NY Times
Irate Europeans Protest the Soaring Price of Gasoline
By KATRIN BENNHOLD
PARIS — Marie Schneberger has always been thrifty about gasoline. The high price of filling up made it prohibitively expensive for Ms. Schneberger, a middle-income airline employee, to own anything bigger than a Fiat subcompact.
But with prices surging past 1.40 euro a liter in France (about $8.20 a gallon), Ms. Schneberger’s old economies have proved insufficient. So, she recently started taking the Métro to work and splitting the use of her car with two other women, to share fuel costs.
Gas prices that make drivers queasy at the pump are a relatively new occurrence in the United States, but persistently high prices forced Europeans to curtail their fuel consumption long ago. (In many countries, government taxes account for more than half the price.)
Highways are filled with fuel-efficient Smart cars and Minis, most cities have highly developed public transportation systems, and green-minded policies have spawned everything from special bicycle lanes to downtown congestion charges. Now the current surge in the price of oil has many Europeans asking how much leaner they can become.
“This concerns everyone who drives,” Ms. Schneberger said. “And that makes a lot of angry people.” Indeed, protests broke out across the Continent this week as irate port workers clashed with the riot police in Marseille and truckers stopped traffic in London to demand government fuel rebates. On Thursday, the protests spread to truckers in the Netherlands and French farmers blocked the entrance to oil depots. Italian and Spanish fishermen were planning strikes for Friday.
Less audible, but no less angry, are French nurses fretting about the cost of making home visits in their cars, Italian travel agents worried about fueling tour buses, and families from Madrid to Moscow who are leaving their cars at home or reducing spending in other areas.
European governments, already under pressure from slowing economic growth and falling tax revenue, are increasingly concerned the anger could grow. On Tuesday, faced with furious truckers, President Nicolas Sarkozy of France called for the European Union to cap fuel taxes — a proposal immediately rejected by other countries that count on the income to bolster their budgets.
The problem in Europe is that the upsurge has come faster and harder than in previous cycles. For instance, the cost of a liter of unleaded gasoline surged 17 percent in the last 12 months in Britain, 15 percent in Austria and 8 percent in France.
Prime Minister Gordon Brown of Britain, a major opponent of the Sarkozy proposal, warned that the world was facing an oil shock. His solution was to persuade governments around the world to take coordinated global action to mitigate price increases.
Britain, which has Europe’s highest fuel consumption taxes, granted licenses Wednesday for two new North Sea oil fields.
But as protesters and industry groups press for immediate tax breaks, analysts, European officials and consumer groups are concerned that artificially lowering prices would only engrain a consumption pattern that is not sustainable.
Instead, they say, politicians should provide long-term incentives to reduce fuel use and increase energy efficiency. The European Commission said Thursday that short-term relief should be narrowly focused on the poorest families, and warned European Union states not to provide tax relief to interest groups.
In Germany, Europe’s largest economy, the Federation of German Consumer Organizations is lobbying the government to invest 5 billion euros in public transportation and to allocate 10 billion euros in subsidies to households that install energy saving devices.
“Dealing with the issue through taxes is not the solution,” Holger Krawinkel, director of the federation’s energy department, said Thursday. “We need a serious commitment to investing in energy saving schemes.”
Such incentives to reduce consumption have worked in the past. Fuel taxes imposed after an oil shock in the 1980s are the main reason Europe has a vastly more fuel-efficient car fleet than the United States, said Lawrence Eagles, chief market analyst at the International Energy Agency.
But greater energy efficiency in Europe has also made it harder for Europeans to make further substantial improvements, analysts say.
Yet, the latest price shock has reignited the trend. Moshiur Rahman, a 28-year-old newspaper vendor in London, said higher fuel prices meant that he could no longer afford to drive to work. He now travels more than an hour by train every day.
“I have been sharing a car with a friend but it has just become too much money,” he said.
In Warsaw, where gas prices are nearing 5 zloty ($2.31), a liter, Leszek Tumkiewicz tries to leave his Polonez — a fuel-intensive communist-era car — at home. “I drive a lot but I also try to be fond of the Warsaw Metro,” said Mr. Tumkiewicz, 50, a business consultant who lives 12 miles from the city center.
Higher gas prices have prompted motorists to look for the best possible deal around. Drivers in Northern Ireland are making the trip south to fill their tanks in the Republic of Ireland, where fuel duties are considerably lower.
Not everyone is able to find cheaper fuel or reduce their driving. In Milan, Marco Germani, a self-employed salesman who is constantly on the road, said he had no choice but to pay up. “Unfortunately there is nothing I can do about it because I need to use the car for work,” he said.
Particularly in rural areas, where public transport is more limited, high energy costs take their toll elsewhere. Analysts call it the “Starbucks effect” — a decline in discretionary consumption in response to higher fuel bills.
The effect is hard to measure, especially because many products have increased in price as a result of rising transportation costs. In Spain, for example, where gasoline costs 1 to 1.25 euros a liter, many consumers are grumbling more about the accompanying rise in grocery bills than the price at the pump.
Even in Russia, one of the world’s largest oil producers, consumers have cut back spending and demonstrations by disgruntled drivers have erupted after prices at the pump rose by more than 7 percent from a year ago.
“The prices are nightmarish,” said Arutsun Hachaturyan, the manager of a jewelry business, who said he pumps about $1,200 in gas a month into his black Range Rover. “This is Russia,” he said, while filling his tank at a Moscow gas station. “We live on oil.”
The only solution, said Ms. Schneberger, the airline worker in Paris, is to “become less dependent on oil.”
But as fears of high energy costs merge with broader concerns about slipping standards of living, the calls for tax cuts are growing louder, suggesting that farmers, truckers and fishermen may end up with broader support in the general public.
In London, for instance, expectations of government tax cuts are high. Julian Popa, the manager of a hauling company, said he had not yet raised the prices he charges customers because “we’re waiting for the government to do something like reducing the levy or subsidize” oil.
Reporting was contributed by James Kanter from Brussels, Judy Dempsey from Berlin, Eamon Quinn from Dublin, Julia Werdigier from London, Michael Schwirtz from Moscow, Carter Dougherty from Warsaw, Eric Sylvers from Milan, Dan Bilefsky from Paris and Dale Fuchs from Madrid.
Food Report Criticizes Biofuel Policies - 053008 NYT
http://www.nytimes.com/2008/05/30/business/worldbusiness/30food.html?_r=1&sq=biofuel%20policies&st=cse&oref=login&scp=2&pagewanted=print
May 30, 2008 NY Times
Food Report Criticizes Biofuel Policies
By ANDREW MARTIN
Agriculture Secretary Edward T. Schafer is preparing to walk into a buzzsaw of criticism over American biofuels policy when he meets with world leaders to discuss the global food crisis next week.
Mr. Schafer took the offensive at a press conference on Thursday that discussed the food summit, planned for Rome. He said an analysis by the Agriculture Department had determined that biofuel production was responsible for only 2 to 3 percent of the increase in global food prices, while biofuels had reduced consumption of crude oil by a million barrels a day.
“We think that policy-wise in the United States of America — and certainly in the rest of the world — as we see the price of oil and petroleum escalate dramatically beyond anyone’s imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment and help lower that cost,” he said.
Mr. Schafer’s remarks came as ethanol and biofuels are coming under increasing criticism from foreign leaders and members of Congress, as grocery prices climb in the developed world and malnutrition and hunger threaten to spread in the poorest nations.
Just hours before his comments, a major report was released in Paris that urged countries to reconsider biofuels policies in the wake of soaring food prices.
“The energy security, environmental and economic benefits of biofuels production based on agricultural commodity feed stocks are at best modest, and sometimes even negative,” says the report, prepared by the Food and Agriculture Organization of the United Nations and the Organization for Economic Cooperation and Development. “Alternative approaches may be considered that offer potentially greater benefits with less of the unintended market impact.”
The Agriculture Department’s own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the “foot on the accelerator” of corn demand — an essential feed for animals, as well as a part of many diets — and merited renewed debate. He said Congressional mandates for ethanol would require farmers to grow more corn for conversion to biofuel, at the expense of feed corn and other food crops.
“You’re building in tremendous increase in demand,” said Mr. Collins, who emphasized that he was not necessarily against ethanol. “It’s an increase that is going to feed into food prices.”
The United Nations report, the global agriculture outlook through 2017, said prices for farm crops will remain substantially higher over the next decade because of fundamental changes in demand, though they will gradually decline from current highs.
Because the recent spike in crop and food prices has been caused in part by temporary factors like drought, the report predicted that prices should decrease as weather conditions return to normal and crop yields improve.
“At least we hope they are temporary,” said Angel Gurria, secretary-general of the O.E.C.D., alluding to the potential impact of lasting climate change on agricultural production.
In addition to reviewing ethanol policies, the report said governments should reconsider trade policies like export bans that do not allow farmers to take advantage of higher global prices for agriculture commodities.
The report also encouraged countries that have balked at allowing genetically modified crops to reconsider their use as a way to improve yields.
The expected causes of higher-than-average prices during the next decade include a doubling of biofuel production, higher fuel costs that increase the cost of producing crops and transporting food, and greater demand for food and animal feed in richer developing countries where incomes are rising, the report says.
Prices for vegetable oils are expected to remain the highest, 80 percent above the average from 1998 to 2007; wheat, corn and skim milk powder are anticipated to be 40 to 60 percent higher; sugar, 30 percent; and beef and pork, about 20 percent. Biofuel production should account for about a third of the expected increases in prices for vegetable oils and grains.
But the authors of the report cautioned that crop prices may be more volatile because of less predictable weather patterns, speculators in agricultural futures markets and low levels of stockpiles of grains.
The projected increases in crop prices would have the most serious impact in poor countries.
The authors of the report encouraged increased investment in agriculture research and outreach programs in the least developed countries after years of declining support.
“Agricultural development was not given sufficient priority over the last decades, and its importance was underestimated,” said Jacques Diouf, secretary-general of the Food and Agriculture Organization of the United Nations.
In a related matter, the World Bank on Thursday announced that it would increase spending on agriculture and food programs to $6 billion in the coming fiscal year, which begins on July 1, up from $4 billion.
The funds include $800 million that has already been earmarked for Africa and an additional $1.2 billion that will be spent on such things as nutrition programs for schoolchildren and pregnant women, and seeds and fertilizer for small-scale farmers to improve harvests.
“These initiatives will help address the immediate danger of hunger and malnutrition for the 2 billion people struggling to survive in the face of rising food prices,” the president of the World Bank Group, Robert B. Zoellick, said in a statement.
Mr. Zoellick said $200 million of the $1.2 billion would be used as grants for countries most vulnerable to the food crisis.
May 30, 2008 NY Times
Food Report Criticizes Biofuel Policies
By ANDREW MARTIN
Agriculture Secretary Edward T. Schafer is preparing to walk into a buzzsaw of criticism over American biofuels policy when he meets with world leaders to discuss the global food crisis next week.
Mr. Schafer took the offensive at a press conference on Thursday that discussed the food summit, planned for Rome. He said an analysis by the Agriculture Department had determined that biofuel production was responsible for only 2 to 3 percent of the increase in global food prices, while biofuels had reduced consumption of crude oil by a million barrels a day.
“We think that policy-wise in the United States of America — and certainly in the rest of the world — as we see the price of oil and petroleum escalate dramatically beyond anyone’s imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment and help lower that cost,” he said.
Mr. Schafer’s remarks came as ethanol and biofuels are coming under increasing criticism from foreign leaders and members of Congress, as grocery prices climb in the developed world and malnutrition and hunger threaten to spread in the poorest nations.
Just hours before his comments, a major report was released in Paris that urged countries to reconsider biofuels policies in the wake of soaring food prices.
“The energy security, environmental and economic benefits of biofuels production based on agricultural commodity feed stocks are at best modest, and sometimes even negative,” says the report, prepared by the Food and Agriculture Organization of the United Nations and the Organization for Economic Cooperation and Development. “Alternative approaches may be considered that offer potentially greater benefits with less of the unintended market impact.”
The Agriculture Department’s own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the “foot on the accelerator” of corn demand — an essential feed for animals, as well as a part of many diets — and merited renewed debate. He said Congressional mandates for ethanol would require farmers to grow more corn for conversion to biofuel, at the expense of feed corn and other food crops.
“You’re building in tremendous increase in demand,” said Mr. Collins, who emphasized that he was not necessarily against ethanol. “It’s an increase that is going to feed into food prices.”
The United Nations report, the global agriculture outlook through 2017, said prices for farm crops will remain substantially higher over the next decade because of fundamental changes in demand, though they will gradually decline from current highs.
Because the recent spike in crop and food prices has been caused in part by temporary factors like drought, the report predicted that prices should decrease as weather conditions return to normal and crop yields improve.
“At least we hope they are temporary,” said Angel Gurria, secretary-general of the O.E.C.D., alluding to the potential impact of lasting climate change on agricultural production.
In addition to reviewing ethanol policies, the report said governments should reconsider trade policies like export bans that do not allow farmers to take advantage of higher global prices for agriculture commodities.
The report also encouraged countries that have balked at allowing genetically modified crops to reconsider their use as a way to improve yields.
The expected causes of higher-than-average prices during the next decade include a doubling of biofuel production, higher fuel costs that increase the cost of producing crops and transporting food, and greater demand for food and animal feed in richer developing countries where incomes are rising, the report says.
Prices for vegetable oils are expected to remain the highest, 80 percent above the average from 1998 to 2007; wheat, corn and skim milk powder are anticipated to be 40 to 60 percent higher; sugar, 30 percent; and beef and pork, about 20 percent. Biofuel production should account for about a third of the expected increases in prices for vegetable oils and grains.
But the authors of the report cautioned that crop prices may be more volatile because of less predictable weather patterns, speculators in agricultural futures markets and low levels of stockpiles of grains.
The projected increases in crop prices would have the most serious impact in poor countries.
The authors of the report encouraged increased investment in agriculture research and outreach programs in the least developed countries after years of declining support.
“Agricultural development was not given sufficient priority over the last decades, and its importance was underestimated,” said Jacques Diouf, secretary-general of the Food and Agriculture Organization of the United Nations.
In a related matter, the World Bank on Thursday announced that it would increase spending on agriculture and food programs to $6 billion in the coming fiscal year, which begins on July 1, up from $4 billion.
The funds include $800 million that has already been earmarked for Africa and an additional $1.2 billion that will be spent on such things as nutrition programs for schoolchildren and pregnant women, and seeds and fertilizer for small-scale farmers to improve harvests.
“These initiatives will help address the immediate danger of hunger and malnutrition for the 2 billion people struggling to survive in the face of rising food prices,” the president of the World Bank Group, Robert B. Zoellick, said in a statement.
Mr. Zoellick said $200 million of the $1.2 billion would be used as grants for countries most vulnerable to the food crisis.
Peru Guards Its Guano as Demand Soars Again - 053008 NYT
http://www.nytimes.com/2008/05/30/world/americas/30peru.html?sq=peru%20guards&st=nyt&scp=1&pagewanted=print
May 30, 2008 - NY Times
Peru Guards Its Guano as Demand Soars Again
By SIMON ROMERO
ISLA DE ASIA, Peru — The worldwide boom in commodities has come to this: Even guano, the bird dung that was the focus of an imperialist scramble on the high seas in the 19th century, is in strong demand once again.
Surging prices for synthetic fertilizers and organic foods are shifting attention to guano, an organic fertilizer once found in abundance on this island and more than 20 others off the coast of Peru, where an exceptionally dry climate preserves the droppings of seabirds like the guanay cormorant and the Peruvian booby.
On the same islands where thousands of convicts, army deserters and Chinese indentured servants died collecting guano a century and a half ago, teams of Quechua-speaking laborers from the highlands now scrape the dung off the hard soil and place it on barges destined for the mainland.
“We are recovering some of the last guano remaining in Peru,” said Victor Ropón, 66, a supervisor from Ancash Province whose leathery skin reflects his years working on the guano islands since he was 17.
“There might be 10 years of supplies left, or perhaps 20, and then it will be completely exhausted,” said Mr. Ropón, referring to fears that the seabird population could be poised to fall sharply in the years ahead. It is a minor miracle that any guano at all is available here today, reflecting a century-old effort hailed by biologists as a rare example of sustainable exploitation of a resource once so coveted that the United States authorized its citizens to take possession of islands or keys where guano was found.
As a debate rages over whether global oil output has peaked, a parable may exist in the story of guano, with its seafaring treachery, the development of synthetic alternatives in Europe and a desperate effort here to prevent the deposits from being depleted.
“Before there was oil, there was guano, so of course we fought wars over it,” said Pablo Arriola, director of Proabonos, the state company that controls guano production, referring to conflicts like the Chincha Islands War, in which Peru prevented Spain from reasserting control over the guano islands. “Guano is a highly desirous enterprise.”
Guano is also an undeniably strenuous enterprise from the perspective of the laborers who migrate to the islands to collect the dung each year. In scenes reminiscent of open-pit gold mines on the mainland, the laborers rise before dawn to scrape the hardened guano with shovels and small pickaxes.
Many go barefoot, their feet and lower legs coated with guano by the time their shifts end in the early afternoon. Some wear handkerchiefs over their mouths and nostrils to avoid breathing in guano dust, which, fortunately, is almost odorless aside from a faint smell of ammonia.
“This is not an easy life, but it’s the one I chose,” said Bruno Sulca, 62, who oversees the loading of guano bags on barges at Isla Guañape, off the coast of northern Peru. Mr. Sulca and other workers earn about $600 a month, more than three times what manual laborers earn in the impoverished highlands.
Peru’s guano trade quixotically soldiers on after almost being wiped out by overexploitation. The dung will probably never be the focus of a boom as intense as the one in the 19th century, when deposits were 150 feet high, with export proceeds accounting for most of the national budget.
The guano on most islands, including Isla de Asia, south of the capital, Lima, now reaches less than a foot or so. But the guano that remains here is coveted when viewed in the context of the frenzy in Peru and abroad around synthetic fertilizers like urea, which has doubled in price to more than $600 a ton in the last year.
Guano in Peru sells for about $250 a ton while fetching $500 a ton when exported to France, Israel and the United States. While guano is less efficient than urea at releasing nitrates into the soil, its status as an organic fertilizer has increased demand, transforming it into a niche fertilizer sought around the world.
“Guano has the advantage of being chemical-free,” said Enrique Balmaceda, who cultivates organic mangoes in Piura, a province in northern Peru. “The problem is, there isn’t enough of it to meet demand with new crops like organic bananas competing for what’s available.”
That explains why Peru is so vigilant about preserving the remaining guano, an effort dating back a century to the creation of the Guano Administration Company, when Peru nationalized the islands, some of which were British-controlled, to stave off the industry’s extinction.
Since then, Peru’s government has restricted guano collection to about two islands a year, enabling the droppings to accumulate. Workers smooth slopes and build walls that retain the guano. Scientists even introduced lizards to hunt down ticks that infested the seabirds.
The guano administrators station armed guards at each of the islands to ward off threats to birds, which produce 12,000 to 15,000 tons of guano a year.
“The fishermen instigate the most mischief here,” said Rómulo Ybarra, 40, one of two guards stationed at Isla de Asia, which otherwise has no regular inhabitants. (The island has a tiny cabin called Casa del Chino, a reference to the Asian ancestry of former President Alberto K. Fujimori, who used to come here to unwind in solitude.)
“When the fishermen approach the island, their engines scare away the guanay,” Mr. Ybarra said, referring to the prized guanay cormorant. “And further out at sea, the fishing boats pursue the anchoveta, something we cannot control.”
The anchoveta, a six-inch fish in the anchovy family, is the main food of the seabirds who leave their droppings on these rainless islands. The biggest fear of Peru’s guano collectors is that commercial fishing fleets will deplete their stocks, which are increasingly wanted as fish meal for poultry and other animals as demand for meat products rises in Asia.
While the bird population has climbed to 4 million from 3.2 million in the past two years, that figure still pales in comparison with the 60 million birds at the height of the first guano rush. Faced with a dwindling anchoveta population, officials at Proabonos are considering halting exports of guano to ensure its supply to the domestic market.
Uriel de la Torre, a biologist who specializes in conserving the guanay cormorant and other seabirds, said that unless some measure emerged to prevent overfishing, both the anchovetas and the seabirds here could die off by 2030.
“It would be an inglorious conclusion to something that has survived wars and man’s other follies,” Mr. de la Torre said. “But that is the scenario we are facing: the end of guano.”
Andrea Zarate contributed reporting from Lima, Peru.
May 30, 2008 - NY Times
Peru Guards Its Guano as Demand Soars Again
By SIMON ROMERO
ISLA DE ASIA, Peru — The worldwide boom in commodities has come to this: Even guano, the bird dung that was the focus of an imperialist scramble on the high seas in the 19th century, is in strong demand once again.
Surging prices for synthetic fertilizers and organic foods are shifting attention to guano, an organic fertilizer once found in abundance on this island and more than 20 others off the coast of Peru, where an exceptionally dry climate preserves the droppings of seabirds like the guanay cormorant and the Peruvian booby.
On the same islands where thousands of convicts, army deserters and Chinese indentured servants died collecting guano a century and a half ago, teams of Quechua-speaking laborers from the highlands now scrape the dung off the hard soil and place it on barges destined for the mainland.
“We are recovering some of the last guano remaining in Peru,” said Victor Ropón, 66, a supervisor from Ancash Province whose leathery skin reflects his years working on the guano islands since he was 17.
“There might be 10 years of supplies left, or perhaps 20, and then it will be completely exhausted,” said Mr. Ropón, referring to fears that the seabird population could be poised to fall sharply in the years ahead. It is a minor miracle that any guano at all is available here today, reflecting a century-old effort hailed by biologists as a rare example of sustainable exploitation of a resource once so coveted that the United States authorized its citizens to take possession of islands or keys where guano was found.
As a debate rages over whether global oil output has peaked, a parable may exist in the story of guano, with its seafaring treachery, the development of synthetic alternatives in Europe and a desperate effort here to prevent the deposits from being depleted.
“Before there was oil, there was guano, so of course we fought wars over it,” said Pablo Arriola, director of Proabonos, the state company that controls guano production, referring to conflicts like the Chincha Islands War, in which Peru prevented Spain from reasserting control over the guano islands. “Guano is a highly desirous enterprise.”
Guano is also an undeniably strenuous enterprise from the perspective of the laborers who migrate to the islands to collect the dung each year. In scenes reminiscent of open-pit gold mines on the mainland, the laborers rise before dawn to scrape the hardened guano with shovels and small pickaxes.
Many go barefoot, their feet and lower legs coated with guano by the time their shifts end in the early afternoon. Some wear handkerchiefs over their mouths and nostrils to avoid breathing in guano dust, which, fortunately, is almost odorless aside from a faint smell of ammonia.
“This is not an easy life, but it’s the one I chose,” said Bruno Sulca, 62, who oversees the loading of guano bags on barges at Isla Guañape, off the coast of northern Peru. Mr. Sulca and other workers earn about $600 a month, more than three times what manual laborers earn in the impoverished highlands.
Peru’s guano trade quixotically soldiers on after almost being wiped out by overexploitation. The dung will probably never be the focus of a boom as intense as the one in the 19th century, when deposits were 150 feet high, with export proceeds accounting for most of the national budget.
The guano on most islands, including Isla de Asia, south of the capital, Lima, now reaches less than a foot or so. But the guano that remains here is coveted when viewed in the context of the frenzy in Peru and abroad around synthetic fertilizers like urea, which has doubled in price to more than $600 a ton in the last year.
Guano in Peru sells for about $250 a ton while fetching $500 a ton when exported to France, Israel and the United States. While guano is less efficient than urea at releasing nitrates into the soil, its status as an organic fertilizer has increased demand, transforming it into a niche fertilizer sought around the world.
“Guano has the advantage of being chemical-free,” said Enrique Balmaceda, who cultivates organic mangoes in Piura, a province in northern Peru. “The problem is, there isn’t enough of it to meet demand with new crops like organic bananas competing for what’s available.”
That explains why Peru is so vigilant about preserving the remaining guano, an effort dating back a century to the creation of the Guano Administration Company, when Peru nationalized the islands, some of which were British-controlled, to stave off the industry’s extinction.
Since then, Peru’s government has restricted guano collection to about two islands a year, enabling the droppings to accumulate. Workers smooth slopes and build walls that retain the guano. Scientists even introduced lizards to hunt down ticks that infested the seabirds.
The guano administrators station armed guards at each of the islands to ward off threats to birds, which produce 12,000 to 15,000 tons of guano a year.
“The fishermen instigate the most mischief here,” said Rómulo Ybarra, 40, one of two guards stationed at Isla de Asia, which otherwise has no regular inhabitants. (The island has a tiny cabin called Casa del Chino, a reference to the Asian ancestry of former President Alberto K. Fujimori, who used to come here to unwind in solitude.)
“When the fishermen approach the island, their engines scare away the guanay,” Mr. Ybarra said, referring to the prized guanay cormorant. “And further out at sea, the fishing boats pursue the anchoveta, something we cannot control.”
The anchoveta, a six-inch fish in the anchovy family, is the main food of the seabirds who leave their droppings on these rainless islands. The biggest fear of Peru’s guano collectors is that commercial fishing fleets will deplete their stocks, which are increasingly wanted as fish meal for poultry and other animals as demand for meat products rises in Asia.
While the bird population has climbed to 4 million from 3.2 million in the past two years, that figure still pales in comparison with the 60 million birds at the height of the first guano rush. Faced with a dwindling anchoveta population, officials at Proabonos are considering halting exports of guano to ensure its supply to the domestic market.
Uriel de la Torre, a biologist who specializes in conserving the guanay cormorant and other seabirds, said that unless some measure emerged to prevent overfishing, both the anchovetas and the seabirds here could die off by 2030.
“It would be an inglorious conclusion to something that has survived wars and man’s other follies,” Mr. de la Torre said. “But that is the scenario we are facing: the end of guano.”
Andrea Zarate contributed reporting from Lima, Peru.
As Oil Prices Soar, Restaurant Grease Thefts Rise - 053008 NYT
http://www.nytimes.com/2008/05/30/us/30grease.html?sq=restaurants%20learn%20to%20lock%20up%20old%20grease&st=cse&scp=1&pagewanted=print
May 30, 2008
As Oil Prices Soar, Restaurant Grease Thefts Rise
By SUSAN SAULNY
The bandit pulled his truck to the back of a Burger King in Northern California one afternoon last month armed with a hose and a tank. After rummaging around assorted restaurant rubbish, he dunked a tube into a smelly storage bin and, the police said, vacuumed out about 300 gallons of grease.
The man was caught before he could slip away. In his truck, the police found 2,500 gallons of used fryer grease, indicating that the Burger King had not been his first fast-food craving of the day.
Outside Seattle, cooking oil rustling has become such a problem that the owners of the Olympia Pizza and Pasta Restaurant in Arlington, Wash., are considering using a surveillance camera to keep watch on its 50-gallon grease barrel. Nick Damianidis, an owner, said the barrel had been hit seven or eight times since last summer by siphoners who strike in the night.
“Fryer grease has become gold,” Mr. Damianidis said. “And just over a year ago, I had to pay someone to take it away.”
Much to the surprise of Mr. Damianidis and many other people, processed fryer oil, which is called yellow grease, is actually not trash. The grease is traded on the booming commodities market. Its value has increased in recent months to historic highs, driven by the even higher prices of gas and ethanol, making it an ever more popular form of biodiesel to fuel cars and trucks.
In 2000, yellow grease was trading for 7.6 cents per pound. On Thursday, its price was about 33 cents a pound, or almost $2.50 a gallon. (That would make the 2,500-gallon haul in the Burger King case worth more than $6,000.)
Biodiesel is derived by processing vegetable oil or animal fat with alcohol. It is increasingly available around the country, but it is expensive. With the right kind of conversion kit (easily found on the Internet) anyone can turn discarded cooking oil into a usable engine fuel that can burn on its own, or as a cheap additive to regular diesel. “The last time kids broke in here they went for the alcohol,” said Mr. Damianidis, who fries chicken wings and cheese sticks. “Obviously they’re stealing oil because it’s worth something.”
While there have been reports of thefts in multiple states, law enforcement officials do not compile national statistics and it remains unclear whether this is part of a passing trend or something more serious.
The suspects in a growing number of grease infractions fall into a range of categories, people interviewed on the matter said, as grease theft is a crime of opportunity. They include do-it-yourself environmentalists worried about their carbon footprints, warring waste management firms trying to beat each other on the sly, and petty thieves who are profiting from the oil’s rising value on the black market.
“It’s a new oddity,” said Officer Seth Hanson of the Federal Way Police Department, near Tacoma, Wash. He said thefts occur outside at least a couple of restaurants there each week. “We’re trying to get an eyeball on how well-organized it is, if at all. To date, we haven’t been very successful in finding anybody.”
Thefts have been reported in at least 20 states, said Christopher A. Griffin, whose family owns Griffin Industries, one of the largest grease collection and rendering companies in the country. The problem has gotten so bad, Mr. Griffin has hired two detectives to investigate thefts around the country. “Theft is theft,” said Mr. Griffin, who is based in Cold Spring, Ky. “I don’t care if you’re stealing grease or if you’re stealing diamonds.”
Fryer oil from a restaurant that does a high volume of frying one kind of food — for example, a fried-chicken chain — is at a premium because of its relative purity. The large-scale producers of grease, restaurants mostly, own their old oil and in recent months have even made a small profit by selling it to collectors. Because of the grease’s rancid odor, most restaurants usually store it out back with the trash. “Once you put something in the trash, it’s abandoned property,” said Jon A. Jaworski, a lawyer in Houston who represents accused grease thieves. “A lot of times, it’s not theft.”
Even so, most restaurant owners and grease collectors say that grease is not free for the taking.
“There’s a new fight for the product, definitely a whole new demand sector,” said Bill Smith, a market reporter for Urner Barry’s Yellow Sheet, an industry newsletter that tracks yellow grease. “Grease theft is becoming a bigger and bigger issue.”
In the case of the Burger King theft, in Morgan Hill, Calif., the police were alerted to suspicious activity by a neighbor who runs his own grease collection and recycling business and is on the lookout for rustlers.
Driving through town, the neighbor, Mark Rosenzweig, said he spotted the suspect’s truck because “it stuck out.” He said he followed it for blocks before it pulled into the Burger King. Mr. Rosenzweig said he knew the man who holds the Burger King grease account, so he called him.
“I had to give everybody a roadside tutorial on grease theft,” Mr. Rosenzweig said of his next call — to the police. “Ten years ago we couldn’t give this stuff away. Now everybody’s fighting over it.” The suspect in the case, a 49-year-old man who said he was from Las Vegas, has yet to enter a plea, and is due in court next in July.
A typical fast-food restaurant produces 150 to 250 pounds of grease a week. Many do not even know when a theft occurs because it usually happens overnight. Most security cameras and night watchmen are focused on cash registers, not the trash.
“Who do you go after?” said Jason Christensen, a trader of fats and oils for the AgriTrading Corporation, in Minnesota. “I sense you’ll start seeing more surveillance equipment put in to monitor these storage facilities at the restaurant. As the price goes up, you can afford to spend a little more to protect your interest.” And there is so much interest in grease these days.
The City of San Francisco has its own grease recycling program run through the Public Utilities Commission called SFGreasecycle, which collects discarded vegetable oil from city restaurants at no charge and recycles it into biodiesel for use in the city fleet.
Healy Biodiesel, a company in Sedgwick, Kan., says it offers a top-quality fuel made from local cooking oils. Ben Healy, the owner, has contracts to collect the raw grease from several franchises around town. “One particular night not too long ago, 9 out of 15 were stolen,” he said of the grease bins. “That’s a majority of the oil and it was a big kick in the stomach.”
At Olympia Pizza and Pasta, Mr. Damianidis, who now sells his grease for a small monthly fee, finds the problem of stolen fryer oil quite annoying and distracting. And he wants to stop the thefts. He is leaning toward a security camera and hoping for the best. “I cook food,” Mr. Damiaidis said. “I’m not going to stay up until 2 in the morning trying to catch someone stealing a barrel of grease.”
May 30, 2008
As Oil Prices Soar, Restaurant Grease Thefts Rise
By SUSAN SAULNY
The bandit pulled his truck to the back of a Burger King in Northern California one afternoon last month armed with a hose and a tank. After rummaging around assorted restaurant rubbish, he dunked a tube into a smelly storage bin and, the police said, vacuumed out about 300 gallons of grease.
The man was caught before he could slip away. In his truck, the police found 2,500 gallons of used fryer grease, indicating that the Burger King had not been his first fast-food craving of the day.
Outside Seattle, cooking oil rustling has become such a problem that the owners of the Olympia Pizza and Pasta Restaurant in Arlington, Wash., are considering using a surveillance camera to keep watch on its 50-gallon grease barrel. Nick Damianidis, an owner, said the barrel had been hit seven or eight times since last summer by siphoners who strike in the night.
“Fryer grease has become gold,” Mr. Damianidis said. “And just over a year ago, I had to pay someone to take it away.”
Much to the surprise of Mr. Damianidis and many other people, processed fryer oil, which is called yellow grease, is actually not trash. The grease is traded on the booming commodities market. Its value has increased in recent months to historic highs, driven by the even higher prices of gas and ethanol, making it an ever more popular form of biodiesel to fuel cars and trucks.
In 2000, yellow grease was trading for 7.6 cents per pound. On Thursday, its price was about 33 cents a pound, or almost $2.50 a gallon. (That would make the 2,500-gallon haul in the Burger King case worth more than $6,000.)
Biodiesel is derived by processing vegetable oil or animal fat with alcohol. It is increasingly available around the country, but it is expensive. With the right kind of conversion kit (easily found on the Internet) anyone can turn discarded cooking oil into a usable engine fuel that can burn on its own, or as a cheap additive to regular diesel. “The last time kids broke in here they went for the alcohol,” said Mr. Damianidis, who fries chicken wings and cheese sticks. “Obviously they’re stealing oil because it’s worth something.”
While there have been reports of thefts in multiple states, law enforcement officials do not compile national statistics and it remains unclear whether this is part of a passing trend or something more serious.
The suspects in a growing number of grease infractions fall into a range of categories, people interviewed on the matter said, as grease theft is a crime of opportunity. They include do-it-yourself environmentalists worried about their carbon footprints, warring waste management firms trying to beat each other on the sly, and petty thieves who are profiting from the oil’s rising value on the black market.
“It’s a new oddity,” said Officer Seth Hanson of the Federal Way Police Department, near Tacoma, Wash. He said thefts occur outside at least a couple of restaurants there each week. “We’re trying to get an eyeball on how well-organized it is, if at all. To date, we haven’t been very successful in finding anybody.”
Thefts have been reported in at least 20 states, said Christopher A. Griffin, whose family owns Griffin Industries, one of the largest grease collection and rendering companies in the country. The problem has gotten so bad, Mr. Griffin has hired two detectives to investigate thefts around the country. “Theft is theft,” said Mr. Griffin, who is based in Cold Spring, Ky. “I don’t care if you’re stealing grease or if you’re stealing diamonds.”
Fryer oil from a restaurant that does a high volume of frying one kind of food — for example, a fried-chicken chain — is at a premium because of its relative purity. The large-scale producers of grease, restaurants mostly, own their old oil and in recent months have even made a small profit by selling it to collectors. Because of the grease’s rancid odor, most restaurants usually store it out back with the trash. “Once you put something in the trash, it’s abandoned property,” said Jon A. Jaworski, a lawyer in Houston who represents accused grease thieves. “A lot of times, it’s not theft.”
Even so, most restaurant owners and grease collectors say that grease is not free for the taking.
“There’s a new fight for the product, definitely a whole new demand sector,” said Bill Smith, a market reporter for Urner Barry’s Yellow Sheet, an industry newsletter that tracks yellow grease. “Grease theft is becoming a bigger and bigger issue.”
In the case of the Burger King theft, in Morgan Hill, Calif., the police were alerted to suspicious activity by a neighbor who runs his own grease collection and recycling business and is on the lookout for rustlers.
Driving through town, the neighbor, Mark Rosenzweig, said he spotted the suspect’s truck because “it stuck out.” He said he followed it for blocks before it pulled into the Burger King. Mr. Rosenzweig said he knew the man who holds the Burger King grease account, so he called him.
“I had to give everybody a roadside tutorial on grease theft,” Mr. Rosenzweig said of his next call — to the police. “Ten years ago we couldn’t give this stuff away. Now everybody’s fighting over it.” The suspect in the case, a 49-year-old man who said he was from Las Vegas, has yet to enter a plea, and is due in court next in July.
A typical fast-food restaurant produces 150 to 250 pounds of grease a week. Many do not even know when a theft occurs because it usually happens overnight. Most security cameras and night watchmen are focused on cash registers, not the trash.
“Who do you go after?” said Jason Christensen, a trader of fats and oils for the AgriTrading Corporation, in Minnesota. “I sense you’ll start seeing more surveillance equipment put in to monitor these storage facilities at the restaurant. As the price goes up, you can afford to spend a little more to protect your interest.” And there is so much interest in grease these days.
The City of San Francisco has its own grease recycling program run through the Public Utilities Commission called SFGreasecycle, which collects discarded vegetable oil from city restaurants at no charge and recycles it into biodiesel for use in the city fleet.
Healy Biodiesel, a company in Sedgwick, Kan., says it offers a top-quality fuel made from local cooking oils. Ben Healy, the owner, has contracts to collect the raw grease from several franchises around town. “One particular night not too long ago, 9 out of 15 were stolen,” he said of the grease bins. “That’s a majority of the oil and it was a big kick in the stomach.”
At Olympia Pizza and Pasta, Mr. Damianidis, who now sells his grease for a small monthly fee, finds the problem of stolen fryer oil quite annoying and distracting. And he wants to stop the thefts. He is leaning toward a security camera and hoping for the best. “I cook food,” Mr. Damiaidis said. “I’m not going to stay up until 2 in the morning trying to catch someone stealing a barrel of grease.”
Mounting Costs Slow The Push For Clean Coal - 053008 NY Times
http://www.nytimes.com/2008/05/30/business/30coal.html?_r=1&hp=&oref=slogin&pagewanted=print
The Energy Challenge
Mounting Costs Slow the Push for Clean Coal
By MATTHEW L. WALD
WASHINGTON — For years, scientists have had a straightforward idea for taming global warming. They want to take the carbon dioxide that spews from coal-burning power plants and pump it back into the ground.
President Bush is for it, and indeed has spent years talking up the virtues of “clean coal.” All three candidates to succeed him favor the approach. So do many other members of Congress. Coal companies are for it. Many environmentalists favor it. Utility executives are practically begging for the technology.
But it has become clear in recent months that the nation’s effort to develop the technique is lagging badly.
In January, the government canceled its support for what was supposed to be a showcase project, a plant at a carefully chosen site in Illinois where there was coal, access to the power grid, and soil underfoot that backers said could hold the carbon dioxide for eons.
Perhaps worse, in the last few months, utility projects in Florida, West Virginia, Ohio, Minnesota and Washington State that would have made it easier to capture carbon dioxide have all been canceled or thrown into regulatory limbo.
Coal is abundant and cheap, assuring that it will continue to be used. But the failure to start building, testing, tweaking and perfecting carbon capture and storage means that developing the technology may come too late to make coal compatible with limiting global warming.
“It’s a total mess,” said Daniel M. Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.
“Coal’s had a tough year,” said John Lavelle, head of a business at General Electric that makes equipment for processing coal into a form from which carbon can be captured. Many of these projects were derailed by the short-term pressure of rising construction costs. But scientists say the result, unless the situation can be turned around, will be a long-term disaster.
Plans to combat global warming generally assume that continued use of coal for power plants is unavoidable for at least several decades. Therefore, starting as early as 2020, forecasters assume that carbon dioxide emitted by new power plants will have to be captured and stored underground, to cut down on the amount of global-warming gases in the atmosphere.
Yet, simple as the idea may sound, considerable research is still needed to be certain the technique would be safe, effective and affordable.
Scientists need to figure out which kinds of rock and soil formations are best at holding carbon dioxide. They need to be sure the gas will not bubble back to the surface. They need to find optimal designs for new power plants so as to cut costs. And some complex legal questions need to be resolved, such as who would be liable if such a project polluted the groundwater or caused other damage far from the power plant.
Major corporations sense the possibility of a profitable new business, and G.E. signed a partnership on Wednesday with Schlumberger, the oil field services company, to advance the technology of carbon capture and sequestration.
But only a handful of small projects survive, and the recent cancellations mean that most of this work has come to a halt, raising doubts that the technique can be ready any time in the next few decades. And without it, “we’re not going to have much of a chance for stabilizing the climate,” said John Thompson, who oversees work on the issue for the Clean Air Task Force, an environmental group.
The fear is that utilities, lacking proven chemical techniques for capturing carbon dioxide and proven methods for storing it underground by the billions of tons per year, will build the next generation of coal plants using existing technology. That would ensure that vast amounts of global warming gases would be pumped into the atmosphere for decades.
The highest-profile failure involved a project known as FutureGen, which President Bush himself announced in 2003: a utility consortium, with subsidies from the government, was going to build a plant in Mattoon, Ill., testing the most advanced techniques for converting coal to a gas, capturing pollutants, and burning the gas for power.
The carbon dioxide would have been compressed and pumped underground into deep soil layers. Monitoring devices would have tested whether any was escaping to the atmosphere.
About $50 million has been spent on FutureGen, about $40 million in federal money and $10 million in private money, to draw up preliminary designs, find a site that had coal, electric transmission and suitable geology, and complete an Environmental Impact Statement, among other steps.
But in January, the government pulled out after projected costs nearly doubled, to $1.8 billion. The government feared the costs would go even higher. A bipartisan effort is afoot on Capitol Hill to save FutureGen, but the project is on life support.
The government had to change its approach, said Clarence Albright Jr., the undersecretary of the Energy Department, to “limit taxpayer exposure to the escalating cost.”
Trying to recover, the Energy Department is trying to cut a deal with a utility that is already planning a new power plant. The government would offer subsidies to add a segment to the plant dedicated to capturing and injecting carbon dioxide, as long as the utility bore much of the risk of cost overruns.
It is unclear whether any utility will agree to such a deal. The power companies, in fact, have been busy pulling back from coal-burning power plants of all types, amid rising costs and political pressure. Utility executives say they do not know of a plant that would qualify for an Energy Department grant as the project is now structured.
Most worrisome to experts on global warming, the utilities have recently been canceling their commitments to a type of plant long seen as a helpful intermediate step toward cleaner coal.
In plants of this type, coal would be gasified and pollutants like mercury, sulfur and soot removed before burning. The plants would be highly efficient, and would therefore emit less carbon dioxide for a given volume of electricity produced, but they would not inject the carbon dioxide into the ground.
But the situation is not hopeless. One new gasification proposal survives in the United States, by Duke Energy for a plant in Edwardsport, Ind. In Wisconsin, engineers are testing a method that may allow them to bolt machinery for capturing carbon dioxide onto the back of old-style power plants; Sweden, Australia and Denmark are planning similar tests. And German engineers are exploring another approach, one that involves burning coal in pure oxygen, which would produce a clean stream of exhaust gases that could be injected into the ground.
But no project is very far along, and it remains an open question whether techniques for capturing and storing carbon dioxide will be available by the time they are critically needed.
The Electric Power Research Institute, a utility consortium, estimated that it would take as long as 15 years to go from starting a pilot plant to proving the technology will work. The institute has set a goal of having large-scale tests completed by 2020. “A year ago, that was an aggressive target,” said Steven R. Specker, the president of the institute. “A year has gone by, and now it’s a very aggressive target.”
The Energy Challenge
Mounting Costs Slow the Push for Clean Coal
By MATTHEW L. WALD
WASHINGTON — For years, scientists have had a straightforward idea for taming global warming. They want to take the carbon dioxide that spews from coal-burning power plants and pump it back into the ground.
President Bush is for it, and indeed has spent years talking up the virtues of “clean coal.” All three candidates to succeed him favor the approach. So do many other members of Congress. Coal companies are for it. Many environmentalists favor it. Utility executives are practically begging for the technology.
But it has become clear in recent months that the nation’s effort to develop the technique is lagging badly.
In January, the government canceled its support for what was supposed to be a showcase project, a plant at a carefully chosen site in Illinois where there was coal, access to the power grid, and soil underfoot that backers said could hold the carbon dioxide for eons.
Perhaps worse, in the last few months, utility projects in Florida, West Virginia, Ohio, Minnesota and Washington State that would have made it easier to capture carbon dioxide have all been canceled or thrown into regulatory limbo.
Coal is abundant and cheap, assuring that it will continue to be used. But the failure to start building, testing, tweaking and perfecting carbon capture and storage means that developing the technology may come too late to make coal compatible with limiting global warming.
“It’s a total mess,” said Daniel M. Kammen, director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.
“Coal’s had a tough year,” said John Lavelle, head of a business at General Electric that makes equipment for processing coal into a form from which carbon can be captured. Many of these projects were derailed by the short-term pressure of rising construction costs. But scientists say the result, unless the situation can be turned around, will be a long-term disaster.
Plans to combat global warming generally assume that continued use of coal for power plants is unavoidable for at least several decades. Therefore, starting as early as 2020, forecasters assume that carbon dioxide emitted by new power plants will have to be captured and stored underground, to cut down on the amount of global-warming gases in the atmosphere.
Yet, simple as the idea may sound, considerable research is still needed to be certain the technique would be safe, effective and affordable.
Scientists need to figure out which kinds of rock and soil formations are best at holding carbon dioxide. They need to be sure the gas will not bubble back to the surface. They need to find optimal designs for new power plants so as to cut costs. And some complex legal questions need to be resolved, such as who would be liable if such a project polluted the groundwater or caused other damage far from the power plant.
Major corporations sense the possibility of a profitable new business, and G.E. signed a partnership on Wednesday with Schlumberger, the oil field services company, to advance the technology of carbon capture and sequestration.
But only a handful of small projects survive, and the recent cancellations mean that most of this work has come to a halt, raising doubts that the technique can be ready any time in the next few decades. And without it, “we’re not going to have much of a chance for stabilizing the climate,” said John Thompson, who oversees work on the issue for the Clean Air Task Force, an environmental group.
The fear is that utilities, lacking proven chemical techniques for capturing carbon dioxide and proven methods for storing it underground by the billions of tons per year, will build the next generation of coal plants using existing technology. That would ensure that vast amounts of global warming gases would be pumped into the atmosphere for decades.
The highest-profile failure involved a project known as FutureGen, which President Bush himself announced in 2003: a utility consortium, with subsidies from the government, was going to build a plant in Mattoon, Ill., testing the most advanced techniques for converting coal to a gas, capturing pollutants, and burning the gas for power.
The carbon dioxide would have been compressed and pumped underground into deep soil layers. Monitoring devices would have tested whether any was escaping to the atmosphere.
About $50 million has been spent on FutureGen, about $40 million in federal money and $10 million in private money, to draw up preliminary designs, find a site that had coal, electric transmission and suitable geology, and complete an Environmental Impact Statement, among other steps.
But in January, the government pulled out after projected costs nearly doubled, to $1.8 billion. The government feared the costs would go even higher. A bipartisan effort is afoot on Capitol Hill to save FutureGen, but the project is on life support.
The government had to change its approach, said Clarence Albright Jr., the undersecretary of the Energy Department, to “limit taxpayer exposure to the escalating cost.”
Trying to recover, the Energy Department is trying to cut a deal with a utility that is already planning a new power plant. The government would offer subsidies to add a segment to the plant dedicated to capturing and injecting carbon dioxide, as long as the utility bore much of the risk of cost overruns.
It is unclear whether any utility will agree to such a deal. The power companies, in fact, have been busy pulling back from coal-burning power plants of all types, amid rising costs and political pressure. Utility executives say they do not know of a plant that would qualify for an Energy Department grant as the project is now structured.
Most worrisome to experts on global warming, the utilities have recently been canceling their commitments to a type of plant long seen as a helpful intermediate step toward cleaner coal.
In plants of this type, coal would be gasified and pollutants like mercury, sulfur and soot removed before burning. The plants would be highly efficient, and would therefore emit less carbon dioxide for a given volume of electricity produced, but they would not inject the carbon dioxide into the ground.
But the situation is not hopeless. One new gasification proposal survives in the United States, by Duke Energy for a plant in Edwardsport, Ind. In Wisconsin, engineers are testing a method that may allow them to bolt machinery for capturing carbon dioxide onto the back of old-style power plants; Sweden, Australia and Denmark are planning similar tests. And German engineers are exploring another approach, one that involves burning coal in pure oxygen, which would produce a clean stream of exhaust gases that could be injected into the ground.
But no project is very far along, and it remains an open question whether techniques for capturing and storing carbon dioxide will be available by the time they are critically needed.
The Electric Power Research Institute, a utility consortium, estimated that it would take as long as 15 years to go from starting a pilot plant to proving the technology will work. The institute has set a goal of having large-scale tests completed by 2020. “A year ago, that was an aggressive target,” said Steven R. Specker, the president of the institute. “A year has gone by, and now it’s a very aggressive target.”
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