Oil is okaygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
-- another perspective (for @TB2k .com), November 29, 1999
Monday November 29 4:25 PM ET
Oil Powers to Act Jointly in Case of Y2K Glitch
By Tom Ashby
CARACAS (Reuters) - Oil powers Venezuela, Mexico and Saudi Arabia, the top suppliers of oil to the United States, said on Monday they would act jointly to face up to any Y2K interruptions in global oil supply.
But any supply disruption was ``highly improbable'', after extensive tests and simulations, they said in a joint statement from Caracas.
The trio added it was committed to guaranteeing a balanced market around the key date, when some computers risk malfunction.
The announcement was welcomed by the West's energy watchdog, the International Energy Agency (IEA), which called the move ''statesmanlike''.
``Saudi Arabia, Mexico and Venezuela want to assure the participants in international oil markets that oil production in their countries is not at risk,'' said the statement from Venezuela's Energy and Mines Ministry.
``If any problem associated with Y2K does occur in the coming months, which is highly improbable, Saudi Arabia, Mexico and Venezuela, in coordination with other oil producing countries, would respond in the appropriate way,'' it added.
The three exporters have emerged as key managers of global oil supply since early 1998 when they masterminded production cuts in response to the deepest price crash in decades.
As a result of the cuts, many countries have a large margin of unused capacity, but some big producers have done little to prepare their computers for the date change.
Saudi Arabia, Venezuela and Mexico all say they have made extensive preparations to face up to the bug. But some other producers, particularly Iraq, have done little to update their systems, which could misinterpret the change of year as a malfunction and shut down crucial operations.
The IEA said it welcomed reports that the three countries ''intend to make good oil supplies that may be lost due to computer problems at the New Year''.
``Producers and consumers alike need confident oil markets. This is a significant contribution to maintaining that confidence,'' the IEA added in a communiqu.
The Venezuelan statement said the trio maintained their commitment keeping prices stable and at levels that serve producer and consumer interests.
Oil prices have more than doubled this year to nine-year highs as a result of the output cuts, which are scheduled to expire in March 2000.
Consumers are expected to stock up on fuel ahead of December 31, while producers are filling inventories at home and abroad to ensure the availability of supplies in case of production problems.
The Paris-based IEA, whose members are taken from the Organization for Economic Cooperation and Development (OECD), insists countries hold a minimum oil stock level as a condition of membership.
Last week the U.S. government said it was prepared to sell crude oil from its enormous Strategic Petroleum Reserve if a Y2K problem disrupted supply.
Venezuelan state oil company Petroleos de Venezuela S.A. said last week it will halt tanker dockings and oil loadings for about 10 hours around midnight on December 31 as a preventive measure against Y2K problems.
Other exporters are likely to take similar measures, but that is expected to have little impact on the availability of oil, which can take weeks to ship to consumer markets.
-- another perspective (email@example.com), November 29, 1999.
Hey, I hope you're right. I have a lot invested in a sound economy, like student loans. So your belief that I want disaster to fall is wrong again, doofus.
-- X (X@X.com), November 29, 1999.
X and Killer Bunny:
Don't feed the troll, idiots.
-- haha (firstname.lastname@example.org), November 29, 1999.
Quotes about oil and gas from the Executive Summary of the Senate Y2K Committee's 100 day report:
The international Y2K picture is more disturbing. The Y2K preparations in many countries of economic and strategic importance to the U. S. are inadequate. Of greatest concern are Russia, China, Italy, and several oil producing countries. The Y2K problem has highlighted the economic interdependence of nations. A significant potential exists for the Y2K induced problems of other nations to wash up on our shores whether in the form of recession, lost jobs, or requests for international assistance.
Oil and gas companies have made notable advances since the Committee's last report, but continued progress remains essential. Nearly 500 companies do not plan to complete repairs until late 1999, which makes disruption possible for some domestic oil and gas billing, production, transportation, and distribution. In addition, the likelihood of disruption in oil imports is high due to the lack of preparedness in key oil producing countries. Disruptions could ultimately affect gas prices and availability.
The heavily regulated insurance, investment services, and banking industries are farthest ahead in their efforts; healthcare, oil, education, agriculture, farming, food processing, and the construction industries are lagging behind.
The Committee is greatly concerned about the international Y2K picture. Several countries of strategic and economic importance to the U.S. are severely behind in Y2K remediation efforts. Regions of the world of most concern to the Committee are Eastern Europe, Africa, and parts of Asia and South America. When considering strategic and economic factors, and the status of Y2K remediation efforts within specific countries, the Committee's greatest concerns lie with China, Russia, Italy, and several of the countries from which the U.S. imports oil.
-- Linkmeister (email@example.com), November 29, 1999.
Sure, I can see it already. Yeah, they'll eventually get everything fixed, but how many $$$ Billions is the United States going to have to "loan" them from taxpayer money before they finally fix it?
-- Hawk (firstname.lastname@example.org), November 29, 1999.
Saudi Arabia is not fine. I sense some puppet strings being pulled here.
-- Dog Gone (email@example.com), November 29, 1999.
Read the actual words people, NOT the headlines.....
All these countries said was that they would "make good" the shortfall, if supplies were disrupted......
Now, a riddle:
These countries make almost all of their revenue - which is required for their daily receipts and the well-being of the entire ruling classes, the ruling businesses, and ALL of teh ruling politicians - FROM their oil revenues.
There is no reason - OTHER THAN Y2K TROUBLES - to assume any disruptions in supplies, right? There is no trouble coming that we can see....(other than perhaps the perennial Isreali/Palestine problem - now getting exaggerated due the Temple Mount problem admittedly, but that remain low-key right now.)
So - IF the shortages occur, they will either be minor and short-lived, or extreme and long-lived, there is little to expect any case in the middle in these particular instances since remediation is so spotty.
NOW, HOW CAN THE COUNTRIES AFFECTED BY DISRUPTIONS "MAKE GOOD" SUPPLIES WHEN THEY ARE THEMSELVES DISRUPTED?
It's not the cost of oil (in this case) - if disruptions occur, it's because THEY CAN'T PUMP IT (or deliver or ship or refine or store it or measure it or ....)
-- Robert A. Cook, PE (Marietta, GA) (firstname.lastname@example.org), November 29, 1999.
Worse, most of Europe's supplies of natural gas and oil are from Libya and Russia ... not two of the world's most stable countries, neither is well-remediated, and neither of whom is a party to this "making good" non-offer.....
... and both of whom are in desperate need of extra foreign cash, certain to be able to come in - IF they can pump it. SO - IF these can pump, they will try to deliver (more pollution if/when they try and fail?) it to those who will pay the most....
-- Robert A. Cook, PE (Marietta, GA) (email@example.com), November 29, 1999.
This is nothing but a PR Piece designed to add some stability to the oil market. "They" don't want a gyrating market, where "They" could lose MONEY.
Warm-Fuzzies wont deliver a drop of gas to the pump.
-- snooze button (firstname.lastname@example.org), November 29, 1999.
``If any problem associated with Y2K does occur in the coming months, which is highly improbable, Saudi Arabia, Mexico and Venezuela, in coordination with other oil producing countries, would respond in the appropriate way,'' it added."
How? Please define "respond in the appropriate way".
Does this mean they'll ship the oil by camel? By homing pigeon? By Dhow? (A wooden Arabian ship, good for the short distances, but definitely not trans-atlantic. Definitely Y2K compliant though, there's not a computer chip on the whole darn ship!) This quote leaves A LOT to be desired.
"The IEA said it welcomed reports that the three countries ''intend to make good oil supplies that may be lost due to computer problems at the New Year''.
Sure they would, anything that makes them look good! I wonder how they'd respond to NON-powderpuff news articles? Probably shoot the messenger...
``Producers and consumers alike need confident oil markets. This is a significant contribution to maintaining that confidence,'' the IEA added in a communiqu."
A classic case of null-speak, an inspiration to all diplomats world- wide. Sure to be highly commended by President Clinton. "Lincoln bedroom's free, y'all."
"Last week the U.S. government said it was prepared to sell crude oil from its enormous Strategic Petroleum Reserve if a Y2K problem disrupted supply."
Question is how soon, and how long for the crude oil to be turned into diesel and gasoline? Will the refineries be ABLE to process the crude oil if their main systems are down? What are the refineries contingency plans (I'd love to see how they're going to MANUALLY refine crude oil into gasoline.)?
-- Deb M. (email@example.com), November 29, 1999.
Quick point: $$$ spent on pre-rollover remediation is $$$ that is churning healthily around in the economy. $$$ lost due to outages is cost in a much more meaningful sense. It's factories standing idle, people not working, not producing. Fix On Fail isn't good enough.
-- Colin MacDonald (firstname.lastname@example.org), November 30, 1999.