Supply jitters outweighed reports of ‘easing’ tensions between Iran and the EU which, in part, pushed prices lower at yesterday’s close.

Oil was lifted by news of “ongoing refinery issues in the States, the strength in gasoline (prices), strong gasoline demand and inventory levels looking rather worrying low,” said Barclays Capital analyst, Kevin Norrish. Some of the refinery jitters stem from Valero’s announcement that it plans to extend the maintenance period at its 210,000 bpd refinery in Texas by another week.

At 9.18 am, London Brent crude for June delivery was up 28 cents at 67.93 usd, after closing at 67.65 usd yesterday. Meanwhile, New York crude for June delivery was up 32 cents at 65.38 usd a barrel, having closed at 65.06 usd.

Norrish added, with a tighter supply situation, “a piece of rather inconsequential news about Iran and the EU being polite to each other,” was not enough to justify yesterday’s sell-off.

Yesterday, prices fell after Iranian negotiator Ali Larijani said discussions with EU foreign policy head Javier Solana had made progress towards a “united view” on ending the crisis over Iran’s uranium enrichment programme.

WASHINGTON –
The last time gasoline prices approached $3 a gallon nationwide, hurricanes had ripped apart the Gulf Coast oil infrastructure and world oil supplies were stressed. Today, oil supplies aren’t pinched, but rusty U.S. refineries aren’t producing enough gasoline to meet demand, which is driving up pump prices ahead of summer’s peak driving season, and some fear $4-a-gallon gas looms soon.

To be sure, experts disagree. Some think today’s high gasoline prices – a nationwide average of about $2.85 a gallon – are near their peak. Others warn that we haven’t seen anything yet.

“I think we are one disruption or problem away from $4 a gallon gasoline,” said Phil Flynn, a veteran oil analyst for Alaron Trading, a Chicago-based commodities trading company.

One potential disruption is a threatened union strike May 9 at four Belgian refineries. Collectively, they process almost 1 million barrels of oil daily. Increasingly, the United States depends on imported gasoline to make up the difference between the 8.7 million barrels per day produced in the United States and the 9.4 million barrels per day that we consume.

“Europe is now our marginal supplier at this point, and we need those barrels from Europe. Any dislocation out of Europe is going to cause problems,” said Andrew Lebow, senior vice president of the energy division at Man Financial in New York.

No refinery has been built in the United States since 1976. As demand for gasoline grows here, Americans increasingly depend on foreign refiners to provide imported gasoline.

Still, if the Belgium strike is averted and there are no more shutdowns at U.S. refineries, the worst prices may soon be over for motorists, Lebow said.

“We’re creeping back up toward $3 [a gallon] … but should there be no geopolitical, political or refinery upsets, I think that the peak for gasoline is in sight,” he said. “However, because things are so tightly balanced, one major plant going down is going to have enormous impact on the price.”

U.S. gasoline inventories are at a 20-year low. The latest statistics released Wednesday from the U.S. Energy Information Administration, an arm of the Energy Department, show gasoline inventories this week at 194 million barrels – or just under 21 days worth of national use. EIA described that number as “well below the lower end of the average range.” During the same week last year, inventories stood at 208 million barrels.

The weekly statistical report also showed that the nation’s refineries were operating at 87.8 percent of capacity, hampered by fires and other mechanical failures that have reduced the amount of domestically supplied gasoline.

In the aftermath of the 2005 hurricanes, U.S. refiners operated at above-normal levels and put off maintenance and repairs as they struggled to supply the nation. Now they’re trying to catch up on repairs, and there aren’t enough skilled workers to do both that and the annual production switchover to summer fuels. The net result is delays on both maintenance and switchovers.

For gasoline prices to drop, a lot of things must go right at the same time. Aging refineries must ramp up their gasoline production with no further glitches, they must escape damage from hurricanes, gasoline imports must remain steady and crude oil prices must remain at or below their already high levels.

“When you look at the big picture, the trends are very discouraging. We haven’t seen a drop in [gasoline] supply like this since the early ’90s, and it is happening at a time when the demand for gasoline seems like it is not going to retreat,” said Flynn.

Solar cells are usually made from silicon, which is inflexible and relatively heavy.

By contrast, plastic solar cells could be more easily supported and wrapped around surfaces (see Pliable solar cells are on a roll). It might even be possible to spray light-collecting plastic onto a surface.

Plastic cells lag behind silicon in terms of efficiency, however, at best converting just 5% of solar energy into electricity compared with up to 40% for conventional cells. “To make plastic cells commercially viable, you need to reach about 8%,” says David Carroll of Wake Forest University in Winston-Salem, US. “That matches some silicon products already on the market.”

The best plastic solar cells are made from a light-absorbing polymer containing soccer ball-shaped carbon molecules called fullerenes. The fullerenes provide stepping stones in the plastic film for charge to hop across.
Space charge

The main efficiency-limiting factor is a kind of electrical “traffic jam” that occurs inside the plastic. “When you draw off the electrons freed when light hits these devices you leave behind an absence of electrons we call ‘space charge’,” Carroll told New Scientist. This presents a barrier to other electrons. “Charge isn’t mobile enough in these materials to fill the gap and everything gets blocked up,” he adds.

Carefully heating plastic cells seems to solve this problem. Working with colleagues Jiwen Liu and Manoj Namboothiry, also from Wake Forest University, and Kyungkon Kim from the Korea Institute of Science and Technology in Seoul, Carroll found that heating can introduce crystal patterns into the plastic to diffuse these jams.

“It’s possible to create little ‘highways’ that prevent space charge from building up,” Carroll says.
Crystal whiskers

By carefully heating finished cells to around 150ºC, Carroll and colleagues made the fullerene molecules form whiskers of crystal. These trigger crystallisation in the surrounding polymer as well. The fullerene-and-polymer crystal creates a network across the cell, allowing charge to move easily and preventing space charge blockages.

“Getting around space charge is a big step,” says Carroll. The heating process can increase efficiency from 5% to 6%. “Some performed as well as 7%,” Carroll told New Scientist. “We think we can probably push it up to 10%.”

In a matter of days, gas prices will skyrocket, a dwindling food supply will rot, and the oil crisis will literally stop Americans in their tracks.

How can you and your loved ones survive a crippling breakdown?

Log in to “World Without Oil,” a free alternate reality game that taps our collective ingenuity to stop a plausible crisis before it happens. Or at least prepare a post-Katrina nation to deal better with a disaster.

Sprung from the imagination of San Jose gamemaker Ken Eklund, the 30-day Internet game begins April 30 at http://www.worldwithoutoil.org.

“Oil’s” creators herald the venture as a first – an alternate reality game that wrestles with a significant social problem. Another topical game, the obesity-themed “Fatworld,” is in production.

“This is the alternate reality game that will change reality,” Eklund said.

“People are realizing that (an alternate reality game) is not only a viable way to teach and entertain people, in many ways it’s better than booklearning.”

Players enter the game by e-mail, phone calls and creating real or imagined personas on MySpace. What they say will shape the game.

Organizers hope more tech-literate players will blog, make YouTube videos and post audio clips and photos.

Most difficult for organizers will be harnessing the collective brainpower so it doesn’t explode into chaos.

To provide cohesion, eight characters will be gamemasters for the virtual crisis. Players drop in at any time to offer their thoughts about dealing with issues they might encounter, from soaring prices to trying to commute.

“We’re asking people to come and write the story and that’s mainly because the subject is too big for any small group of people,” Eklund said.

“The No. 1 challenge is that people’s imagination is so great,” Eklund said. “We’re going to be running as fast we can to keep up with people. ”

When the game ends, its makers expect the postings will provide insight and solutions to an oil crisis.

Expect growing demand for games like “Oil,” said Jane McGonigal, a Berkeley futurist and game designer for the Institute for the Future in Palo Alto.

Beyond its social resonance, “Oil” illustrates what Web 2.0 is all about, said McGonigal, an “Oil” collaborator. She appeared this week at a Web 2.0 conference in San Francisco. (Web 2.0 is the term used to describe the internet’s much-debated next stage.)

“Web 2.0 is all about participatory culture,” she said. “Nobody’s just receiving content, everything is collaborative including content and analysis.” Web 2.0 draws it together, and so does “Oil.”

“Oil” players visit the website and plunge into a drama orchestrated by the 49-year-old Eklund.

“I was looking for an issue that affected everyone,” he said. Hurricane Katrina and its devastating aftermath, which produced a surge in gasoline prices, fueled “Oil.”

“Katrina definitely left me with the impression that in times of crisis you need to have your own resources,” he said. “You can’t depend on a helicopter swooping from the sky to save you. You better have a plan you can rely on . . . Oil just fit the bill because it is the oxygen of our country.”

Focusing on game solutions, might equip Americans to deal with a real crisis, he said. Eklund expects fresh insights to come from the large group of online players.

The resulting game community will likely return to the real world to evaluate and possibly cut consumption, he said. Regardless of outcomes, the game sidesteps political posturing and fingerpointing. “Oil” was funded through a Corporation of Public Boardcasting grant.

Educators wanting to keep pace with internet-age students have expressed interest in using “Oil” in class.

“I can’t tell you how many educators and nonprofit organizers I’ve talked to see this as the next generation’s type of curriculum,” McGongial said.

The game’s topic and interactive nature sold Jeff Towey at Richmond’s Making Waves. He plans to have his afterschool students patricpate. He is particularly intrigued by how reality games can cover academic subjects, from science to English.

“It’s not straightforward like writing an essay,” he said.

“Oil” isn’t the first game to tackle social issues.

The nascent movement for serious-minded games includes MTV posting at darfurisdying.com a Darfur game created by college students and the International Center on Nonviolent Conflict’s “A Force More Powerful,” an activists’ how-to for non-aggression at http://www.afmpgame.com.

What distinguishes “Oil” is that it is an alternate reality game aimed at benefiting the public, McGonigal said.

Can it achieve such a lofty goal? A UC-Berkeley professor of practical art and new media hopes so.

“(Oil dependency) is an extremely serious matter, and I think it’s good to engage with these questions,” said Greg Niemeyer.

“There’s an aspect to it that is a little hard to translate into a game. Some of its seriousness might be obscured by the fact that we’re encountering it in a game.”

The Department of Revenue spring forecast, which lawmakers use to craft the state budget, predicted Thursday that the state will bring in $364 million less than expected over the next fiscal year, which starts July 1.

The larger-than-expected decline would slash next year’s projected budget surplus, which was pegged at $500 million. It now looks to be closer to $200 million and that’s only because the report Thursday says the state will bring in $68 million more than expected this fiscal year, which ends June 30. That surplus could be carried over to help offset the projected decline.

Lawmakers warn that trend also could mean the state will be spending more than it earns by fiscal year 2009 as oil production on the North Slope continues a steady decline.

“I thought the oil fairy would save us again in ’09 but what we are finding is that it isn’t,” said Sen. Gary Wilken, R-Fairbanks. “And as we move up and down we are going to find we are in a deficit situation.”

Revenue Commissioner Pat Galvin said estimated revenues from oil were revised in three ways since a forecast last fall:

– State economists opted for a more conservative estimate of oil production because of concerns arising over the Prudhoe Bay shutdown last fall due to leaks from corroded pipes.

“The likelihood of things occurring is greater given that we have a 30-year-old field,” said chief economist Michael Williams. Williams also said the revised production estimate reflects problems in counting the barrels of oil from various fields after oil was rerouted to other lines in the wake of the spill.

– Expected revenues from the new oil tax were lowered when the petroleum production tax payments, which brought in an extra $1 billion over the old tax plan, came in earlier this month at about $90 million less than expected.

The state underestimated operating costs that oil companies would be deducting by about 50 percent while overestimating their capital costs by about 15 percent.

– State officials also underestimated the amount of credits oil companies would claim under the next tax scheme this year. They now expect companies to claim those credits next year.

The Revenue Department predicts the general fund will have earned a record $4.98 billion by June 30, the end of fiscal year 2007.

But it’s not so rosy for next year, when earnings will only bring in $3.5 billion.

Analysts attribute the drop to declining oil prices and the rising cost of shipping oil to the West Coast. Royalties and taxes from North Slope crude make up about 85 percent of the state’s revenues.

Meanwhile, the state’s long-term forecast continues to look grim.

Though oil production this year is projected to be higher than last year, barring another major disruption, it is on the decline overall.

Revenue officials forecast that production will sink to 682,000 barrels a day by the year 2016 as compared to 764,000 barrels a day next year. That’s compared to a peak of 2 million barrels a day in 1988.

Oil prices are also projected to fall over the long term, though prices have been notoriously volatile in recent years.

Gov. Sarah Palin’s budget director, Karen Rehfeld, said the state’s long-term prospects point to the need to bring Alaska’s natural gas to market.

* When: Monday, April 23 at 1 p.m. (0500 GMT)

* Price index seen rising due to higher rents, energy costs

SINGAPORE, April 20 (Reuters) – Singapore’s consumer prices probably rose in March for the second straight month, driven up by higher housing costs, car prices and crude oil prices, a Reuters poll showed on Friday.

The median forecast was for prices to have risen 0.3 percent in March on a seasonally adjusted basis, slightly less than the 0.4 percent rise in February. The index unexpectedly fell 0.7 percent in January.

Economists expect higher rents probably lifted the overall consumer price index in March.

Rents for properties in the private sector jumped 14.1 percent in 2006 and are expected to climb higher this year.

Singapore’s Urban Redevelopment Authority will release rental data for the first quarter next week. It has already reported a preliminary 4.6 percent increase in home prices in the first quarter over the final quarter of 2006.

While the biggest increases have been seen mainly in the high-end housing market, some analysts expect the property recovery could broaden in coming months.

Selena Ling, an economist at OCBC, said higher motor vehicle costs would also fan inflation in March.

The cost for the certificates to purchase a vehicle in Singapore more than doubled in March from February. Transport and communication costs account for 22 percent of the overall index, second only to food costs at 23 percent.

Economists also said Singaporeans may have felt pressure from higher energy costs in March, as oil prices spiked last month after Iran detained 15 British sailors and marines.

“Rising wages, flush liquidity and improving domestic demand may be starting to have a more noticeable impact on price pressures,” said Chua Hak Bin, an economist at Citigroup.

From a year earlier, March consumer prices were seen rising 1.0 percent, after a 0.6 percent increase in February.

Singapore’s consumer prices are expected to rise by an average 0.5 to 1.5 percent this year, according to the central bank, following a 1 percent increase in 2006.

The Department of Statistics is due to release the data on Monday at 1 p.m. (0500 GMT).

The study, conducted by Swedish physicist Fredrik Robelius, analyzes oil contributions from small oil fields, as well as the 333 giant oil fields in use today.

Robelius’ study is unique because it examines oil fields from ground level supplies, rather than looking at big picture dynamics like past rates of total production, remaining oil estimates and steady rates of decline.

Debates surrounding the longevity of the world’s oil supply aren’t a new phenomenon.

American geophysicist Marion Hubbert introduced the bell-shaped curve commonly associated with the peak oil debate in a paper presented to the American Petroleum Institute in 1956.

“Peak oil theorists have cautioned – erroneously – for decades that world oil reserves are dwindling,” according to a recently released press statement from the CATO Institute, a Washington, D.C., based non-profit public policy research foundation. “But due to improved technology and the rise in oil prices, reserves that were once too difficult or costly to tap have become profitable – and as such, the world’s ultimately recoverable resources have actually grown over time.”

One South Shore resident isn’t easily convinced by peak oil detractors’ claims that technological advances are the remedy to a society dependent on a finite natural resource.