KahDo Or KahDon't ?  

I'm feeling grumpier as the week goes on, and this sort of thing tends to add to the annoyance - though at least they are giving away small, fuel efficient cars.

Meanwhile the trend in commuter traffic here is all headed the wrong way, with people abandoning the train system and taking to the ever expanding toll road network.

Thousands of passengers have abandoned trains, their impatience with the shoddy service amounting to six million fewer trips on CityRail in the past year. And they are voting not with their feet but their wheels: over the same period, traffic on Sydney's congested toll roads has grown apace, by as much as 4 per cent. The corresponding 2.1 per cent fall in train trips is more startling than the figure suggests. It defies the city's growing population and rising fuel costs.

In other local news, Woodside reported its financial results yesterday and commented on the Mauritanian coup again as well as the Californian LNG terminal building competition. They are talking about proposing a different terminal now, in Mexico rather than offshore from California. Are these things safer off Tijuana than Malibu ? Probably not, but it seems planning permits may be easier to come by.

Australia's largest independent oil and gas producer, Woodside Petroleum, lifted its annual production target and highlighted its increasing international profile after reporting half-year earnings in line with expectations yesterday.

Woodside begins its first overseas production next year as the operator and majority stakeholder of the $US625 million Chinguetti joint project off Mauritania in West Africa. Chief executive Don Voelte assured investors the oil project was proceeding as scheduled despite a recent coup in the country. If Chinguetti, the Enfield oil project in Western Australia and the Otway gas project in Victoria all begin production next year as scheduled, Woodside would raise output to 72-74 mboe in 2006.

Mr Voelte also admitted that a rival BHP Billiton proposal for an offshore LNG terminal in California had a head start on Woodside's proposal. "To be brutally honest, they are ahead of us [in the permit process] there," he said, but added Woodside was considering an alternative plan that would base its terminal in Mexico.

The Herald also took a potshot at Hardman Resources over its involvement in Mauritania (though refrained from doing the same to Woodside). The snippet was accompanied by a picture showing Islamist prisoners released by the new junta.

The Financial Times has some comments on post-coup Mauritania, which seem to align with Wayne Madsen's take on it, without being quite so blunt (note that US dependence on West African oil for its own imports in the future is projected to be greater than it is for Middle Eastern oil):

While the US has, in practice, recognised the new government, the Defense Department said the Pentagon had nevertheless suspended training of Mauritanian troops under a seven-year, $500m (€405m, £276m) trans-Saharan anti-terrorism initiative. This involved nine African governments and was designed to counter potential terrorist activity that could feed off weak and predominantly Muslim states in the Saharan region.

The Pentagon spokesman said it was "uncertain" whether the US would continue to train and equip the Mauritanian military. But Mauritania's new government has said it is still committed to the war on terror.

Analysts say US interest in sparsely populated Mauritania, which links the Arab Maghreb world to sub-Saharan west Africa, is partly motivated by strategic interest in the Gulf of Guinea, which is expected to supply about 25 per cent of US oil imports in a decade. Nigeria, Africa's biggest producer at 2.4m barrels a day, is one of the nine countries in the trans-Saharan initiative.

But the anti-terror collaboration between US and Saharan states has raised questions about whether military aid given to Saharan governments may be used by them to pursue their own internal political objectives. Algeria, in particular, has received communication and high-tech weapons systems from the US, according to Jeremy Keenan, an expert on Saharan affairs.

The "Socialist Worker" also has some speculation on the topic.

In the US, people are finally starting to notice higher energy prices raising inflation.

The Guardian is asking "Is oil heading for $100 a barrel?" (published just before the recent price drop), while rumour has it the cover story of this weekend's New York Times will be on "The end of cheap oil".

Britain and the United States heard a faint echo from the 1970s yesterday as the escalating cost of a tank of petrol contributed to higher inflation. And with tension in the Middle East providing another reminder of life three decades ago, the message last night was that consumers can expect more of the same over the coming months.

The rising cost of energy over the past 18 months has come as a shock to almost every commentator. When a barrel of crude reached $40 (£22), it was assumed the price would quickly halve. When it reached $50, the expectation was that the bubble would quickly burst. Today, with crude above $65 in the futures markets, the talk is a bit more cautious.

...

Interestingly, the markets take a less sanguine view. "The futures curve suggests that the price of oil will remain around its current level for the next few years," the Bank of England said in its quarterly Inflation Report last week. As the Bank went on to say, the probability that the price of crude will follow the exact path suggested by the futures curve is very small. But the bets being laid by those speculating in oil futures tell a different story from some of the energy optimists. The data, according to the Bank, "suggest that financial markets believe that there is a greater chance of a large rise in the price of oil than a large fall. Currently, market participants judge that there is roughly a one in 20 chance that oil prices will be $100 or higher in August 2006."

A 5% chance of oil hitting $100 a barrel still represents long odds but Goldman Sachs - the biggest trader of energy derivatives - thinks it is a real possibility. It put out a paper this year predicting a super-spike in oil prices to $105 a barrel. "We believe oil markets may have entered the early stages of what we have referred to as a 'super-spike' period - a multi-year trading band of oil prices high enough to meaningfully reduce energy consumption and recreate a spare capacity cushion." Only after that has happened does Goldman Sachs think lower energy prices will return.

Financial Sense has an update on oil and shifts in the geopolitical situation (which contains all sorts of interesting stuff), along with some comments on the "dumbing down" of America that echo some of Hunter S Thompson's complaints before his untimely demise.

The American public is fast asleep, transfixed on very silly and trivial human interest and court stories. Laci Peterson, Michael Jackson, Shiavo, Chili fingers, Robert Blake, missing children, escaped convicts, reality shows, the list is endless of distractions from real stories which will shape our future lives and those of our children. Be certain of additional stories of no importance but transfixed interest in the near future. The dumbing down of America is a process well underway. Media explosion in the number of channels has been squandered. Few people care about the news or relevant stories. Worse still, few would understand what is happening in what has become a grand chess game. The level of public awareness on matters highly critical to the future of our nation is diminishing at an alarming rate, enough to embarrass me.

The key passages are probably these:

Already, insurance rates are skyrocketing for coverage on the Malacca Strait in Southeast Asia. The Joint War Committee of Lloyds of London has been given a risk assessment regarding these straits, where 50,000 vessels pass annually. Singapore, Malaysia, and Indonesia have all objected to the claim that a tanker could be hijacked and turned into a massive floating bomb. The retort calls it a "fundamental misunderstanding" of piracy and terrorism threats in the Malacca Strait. Insurance premiums are expected to jump $50 million per year, compounded by paperwork requirements. Other high risk areas were identified as coastal waters off Iraq, Qatar, Somalia, India, and Bangladesh. These areas are "choke points" and thus laden with risk.

A managing director at the global insurance broker Marsh said "It is rare for a waterway, particularly one as busy as the Malacca Strait, to be put on the list." The world is changing, as it is slowly becoming a more dangerous place even to conduct shipping. Pirates, prevalent in the 18-th century, might return to the high seas. Risk models are adapting.

The Iraqi War had a great many motivations. The surface justifications are hardly defensible, but well traveled. If not for soldier deaths, they would be amusing. The other several reasons stand the test of time. Stem the sale of oil for euros, establishment of military bases, securing oil supplies, and locking down all multi-billion energy contracts, these reasons are anything but secondary advantages for the United States. They are primary. The world response, sure to be accelerated by the failed attempts by China to acquire Noranda (copper) then Unocal (oil & gas), is to develop alliances outside the US sphere of influence.

An enormous test comes over the horizon with the Iranian Oil Bourse. The sale of oil & natural gas is without question to be conducted in a currency besides the USDollar, namely the euro. That will surely tweak the US leadership noses. Upcoming competition is heralded between this new bourse and the International Petroleum Exchange in London, and the New York Mercantile Exchange. The world's Petro-Dollar system will soon be directly challenged. Anyone who thinks the Chinese yuan currency basket announcement is not somehow centrally important to the Iranian oil bourse creation, is sadly clueless. The Chinese currency delink to the USDollar next will undermine the Petro-Dollar system itself.

The building of an extra-US alliance is really an anti-US alliance, motivated by frustration over 10 to 15 years of dominance which shows little evidence of consensus building. The US officials have taken the position that the world's lone superpower DOES NOT NEED approval by other nations. Well, guess what! The world response is to attempt to gradually isolate the United States and to operate on vital strategically important matters independently, with no consultation or cooperation. The most dangerous development is the nuclear card being dealt to Iran by Russia and China. The Shanghai Coop Group is gradually taking shape, in substance but not name. That might be their intention, to lie low, get it done, and sneak up on a superpower whose population is fat, slow, poorly read, indulgent, sleepy, distracted, and increasingly compromised. A sense of entitlement is pervasive and disturbing.

A final note from the "Epoch Times" (which I think is an organ of the "Falun Gong" movement) that quotes a speech describing a Chinese Communist Party plot to take over the world. I'm not sure if this is dissident propaganda, a lunatic conspiracy theory or evidence that China has wingnuts who are just as crazy as their American counterparts (it even calls for a "Chinese Century") - so make of it what you will...

The following is a transcript of a speech believed to have been given by Mr. Chi Haotian, Minster of Defense and vice-chairman of China’s Central Military Commission. Independently verifying the authorship of the speech is not possible. It is worth reading because it is believed to set out the CCP’s strategy for the development of China. The speech argues for the necessity of China using biological warfare to depopulate the United States and prepare it for a future massive Chinese colonization.

“The War Is Not Far from Us and Is the Midwife of the Chinese Century” was published on February 15, 2005 on www.peacehall.com and was published on www.boxun.com on April 23, 2005. This speech and a related speech, “The War Is Approaching Us” are analyzed in The Epoch Times original article “The CCP’s Last-ditch Gamble: Biological and Nuclear War.”