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UPI Energy Watch

  |   Nov. 13, 2008 at 2:51 PM
EU leaders seek energy security

The European Commission recently released a new proposal to increase security in its energy supply. The plan focuses on securing more energy resources from the Baltic states and decreasing reliance on Russia.

The EU plan includes five steps to increasing energy security as well as ways to strengthen crisis response and boost oil and gas reserves, EU Business reported.

All 27 EU countries import natural gas from Algeria, Russia and Norway but rely on Russia for around 30 percent of demand.

Improving energy security in the European Union has been a goal of leaders there since Russia and Ukraine fought a price battle in winter 2006 and Ukraine's gas supplies were cut temporarily. Leaders are also wary of dependence on Russia after its armed conflict with Georgia in August.

"We have to do more, be more ambitious, and be even bolder to avoid the risk of energy disruption in the future," said EU Energy Commissioner Andris Piebalgs.

The plan includes a Baltic interconnection plan, a southern gas pipeline to transport supplies from the Caspian Sea and Middle East regions and improving relations with supplier nations, particularly in the Caspian region.


U.S. will expand offshore drilling

The U.S. Minerals Management Service announced it is taking the first major step to expanding offshore oil drilling. The ban that had been in place for decades was lifted after it expired in October.

MMS officials said they are taking steps toward leasing potential sites. The first sites off the U.S. coast will be at least 50 miles off the coast of Virginia. There has not been offshore drilling off Virginia's coast before, the Los Angeles Times reported.

After record oil prices this summer there was an outcry to increase exploration, and, following Virginia, it is likely there will be exploration off the coasts of California, Alaska and Florida.

"We've had some discussion, but now we're getting serious about it," said Randall Luthi, director of the Minerals Management Service. "This is actually an important step in our nation's energy security picture."

The process in Virginia will begin with a 45-day public comment period starting Nov. 13 and ending Dec. 29. The Interior Department does not expect to start leasing the area until at least 2011, after an environmental impact analysis is performed, the Los Angeles Times reported.

Even with steps being taken now, the Department of Energy has estimated that crude oil and gas production and prices would not be substantially affected by offshore drilling until 2030.


South Africa's Engen will import oil after a refinery fire

An oil refinery run by Engen, in Durban, South Africa, was temporarily shut down by a fire Thursday morning.

No one was injured and the cause of the fire is being investigated, Xinhua reported.

The damage was contained to the main crude unit that feeds the crude oil into the rest of the refinery.

"We have our specialist teams on the ground and will be giving updated reports on the investigations and developments in the days ahead. The refinery's environmental team is carrying out regular air sampling, and these samples will be sent to specialized laboratories for analysis," Willem Oosthuizen, general manager of Engen, told The Independent.

Engen said it has adequate fuel stocks for about two weeks of supply and there will be no immediate impact on consumers, but the refinery supplies nearly 20 percent of South Africa's refined fuel. Initial reports suggest that the refinery, with a 135,000 barrel-per-day capacity, could be shut down for several months.

In the meantime, Engen will import both crude and refined oil to maintain supply.

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Closing oil prices, Nov. 13, 3 p.m., London

Brent Crude oil: $53.79

West Texas Intermediate crude oil: $57.57

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(e-mail: energy@upi.com)

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