US-Iranian tensions intensify over oil route

US warns Iran over threat to block oil route

Admiral Habibollah Sayari outlines naval manoeuvres near the Strait of Hormuz

(BBC) – The US Navy has said it will not tolerate disruption to a vital oil-trade route, following an Iranian threat to close it.

Iran warned it would shut the Strait of Hormuz if the West imposed more sanctions over its nuclear programme.

The US and its allies believe Iran is trying to develop a nuclear weapon – a charge Tehran denies.

Reacting to Iran’s warning, a US Fifth Fleet spokeswoman said it was “always ready to counter malevolent actions”.

The Strait of Hormuz links the Gulf – and the oil-producing states of Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – to the Indian Ocean. About 40% of the world’s tanker-borne oil passes through it.

The US maintains a naval presence in the Gulf, largely to ensure the transport of oil remains open.

The strait “is not only important for security and stability in the region, but also is an economic lifeline for countries in the Gulf, including Iran”, Pentagon spokesman George Little said.

“Raising the temperature on tensions in the Gulf is unhelpful”, he said, but added that he was unaware of any hostile action directed against US vessels.

US Fifth Fleet spokeswoman Rebecca Rebarich told the BBC the navy would be ready to act if required: “The US Navy is a flexible, multi-capable force committed to regional security and stability, always ready to counter malevolent actions to ensure freedom of navigation.”

Closure ‘easy’

Western nations recently imposed new sanctions against Tehran following a UN report that said Iran had carried out tests related to “development of a nuclear device”.

Further measures being considered to target Iran’s oil and financial sectors have brought a furious response from Tehran.

Vice-President Mohammad Reza Rahimi warned that “not a drop of oil will pass through the Strait of Hormuz” if sanctions are widened and Iran’s navy chief Admiral Habibollah Sayari said that closing the strait would be “easy”.

“The enemies will only drop their plots when we put them back in their place,” Mr Rahimi was quoted as saying on Tuesday by the official news agency Irna.

Adm Sayari later told Iran’s Press TV that closing the Strait of Hormuz would be “really easy” for Iran’s armed forces “or, as Iranians say, easier than drinking a glass of water”.

“But right now, we don’t need to shut it as we have the Sea of Oman under control, and we can control the transit,” he added.

Iran’s threats to close the strait have not flustered markets and oil prices actually fell after a senior Saudi oil official said that Gulf Arab nations were ready to offset any loss of Iranian crude.

‘Non-compliance’

Earlier, US State Department deputy spokesman Mark Toner said the Iranian threats were simply “another attempt… to distract attention from the real issue, which is their continued non-compliance with their international nuclear obligations”.

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Iran’s navy has been staging wargames in international waters to the east of the strait.

Adm Sayari said the manoeuvres were designed to show Gulf neighbours the power of Iran’s military over the zone.

Washington and Israel have not ruled out military action against Iran’s nuclear facilities if sanctions and diplomacy fail.

Iran has vowed to respond by attacking Israeli and US interests in the region.

An embargo on Iranian oil exports has been considered before but dismissed as it could also drive up global oil prices and harm Western economies, particularly in Europe.

It is believed the new measures could cut Tehran off from global energy markets without raising the price of fuel.

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US households struggle for warm winter

US households struggle for warm winter – Americas – Al Jazeera English [Video]

Next on the Chopping Block — Gas Tax

Gas tax may be next Tea Party target

By Steve Hargreaves @CNNMoney August 8, 2011: 4:48 PM ET
Lawmakers may scrap the 18.4-cent-a-gallon federal levy when it expires next month. Can our roads really afford that?

NEW YORK (CNNMoney) — You may want to consider investing in some good shock absorbers for your car this fall.

Fresh from blocking any new tax increases during the debt ceiling debacle, some lawmakers in Congress may now oppose renewing the federal tax on gasoline and diesel fuel, which is used to maintain our nation’s highways.

The federal gas tax of 18.4 cents a gallon expires at the end of September. In order to keep the gas tax, lawmakers would need to vote to extend the highway funding bill, which is what the gas tax is tied to.

There are no official efforts to scrap the tax yet but as first noted in the journal Politco, momentum appears to be moving in that direction.

A bill was recently introduced by Senate Republicans that would allow states to opt out of the federal highway program. The highway program uses $32 billion each year collected by the gas tax, plus a handful of smaller fees and some borrowing to distribute some $50 billion a year to the states for road construction, maintenance and mass transit projects.

That represents about 28% of all road and transit spending nationwide, with the rest coming from states or towns in the form of tolls, registration and user fees, state gas taxes or their general funds.

Spendthrift motorists shouldn’t get too excited by the prospect of eliminating the federal gas tax, which costs the average driver around $100 a year. The states would presumably make up for the loss of federal funds by increasing their own gas tax or other driving-related fees.

But for those who support ending the federal levy, the thinking is that the states could do a better job of building and maintaining the nation’s infrastructure.

First there’s the bureaucracy. Why collect the money at the state level, send it to Washington, only to have it return to the states?

Then there’s the question of federal oversight. Federal money often requires the use of union labor or comes with other stipulations.

“The Davis-Bacon law increases the cost of new roads, bridges etc. by 25% to 33%,” Grover Norquist, head of the advocacy group Americans for Tax Reform, said referring to the law that stipulates how much workers on federal projects need to be paid. “Much money is siphoned off to pay union workers in subway systems or to build bike paths….not roads.”

About 15% of federal funds go toward mass transit and other things not road related, according to the Transportation Department.

Norquist didn’t say if he’ll use his considerable influence among Republicans to attempt to kill the gas tax next month, but did say “we should move now, or soon, to allow all states to raise and keep their own gas taxes to build and fix roads.”

Supporters of the tax argue federal involvement allows roads to be built and maintained to uniform standards that ensure the smooth and safe flow of travel and commerce.

Having a patchwork of roads with different weight limits, lane widths, or curvature would be a headache for truckers and possibly dangerous for everyone, said Ken Orski, publisher of the infrastructure industry publication Innovation NewsBriefs and a former transportation official in the Nixon and Ford administrations.

Even if states had to build the roads to a federal standard, Washington still acts as as a kind of equalizer when it comes to highway funding. Under the federal system, states on the coasts with large populations often end up sending money to states in the middle of the country that have thousand of miles of open roads but fewer taxpayers to help fund them.

That makes sense, said Orski, as the roads in the middle of the country take a beating by heavy trucks shipping commerce from one coast to the other.

“We are one nation, and we need a national highway system,” he said.

That helps explain why some big business groups not only want to keep the federal gas tax, but want it raised.

Both the Chamber of Commerce and General Motors (GMFortune 500) have recently come out in favor of a higher gas tax — the latter arguing for a dollar-a-gallon increase.

They note that the 18.4 cent-a-gallon tax hasn’t been raised since 1993, and now has the inflation-adjusted buying power of just 11 cents. Plus, fuel efficiency has been rising steadily each year along with miles driven, meaning Americans are putting more miles on roads while paying less to maintain them.

First Published: August 4, 2011: 12:29 PM ET

Apple Overtakes Exxon Mobil

10 August 2011 Last updated at 17:40 ET, BBC News

Apple surpasses Exxon to become most valuable US firm

Technology firm Apple has become the most valuable company in the US, with its market capitalisation overtaking that of Exxon Mobil.

Apple had briefly become the largest US firm on Tuesday, before dropping back below the oil giant.

But Apple has now managed to stay in the top spot at the close of Wall Street for the first time.

It fell 2.8% to end at $363.69, giving a market cap of $337bn (£209bn). Exxon is now worth $331bn after it fell 4.4%.

Exxon, which had been the most valuable company since 2005, saw its stock fall 4.4% to close at $68.03.

Apple had been in second spot since May last year when it overtook Microsoft.

Whereas Exxon has limited growth prospects, because it is reliant on oil prices and new oil discovery, Apple can continue to come up with new technology products.

Apple tends to introduce a new product roughly every three years, which would mean a new gadget in 2013 after the launch of the iPad in 2010.

New Fuel Efficiency Standards

Automakers, Obama administration agree on fuel efficiency standards through 2025

By , Published: July 27, The Washington Post

The Obama administration and major auto manufacturers have reached a deal to raise fuel efficiency standards for cars and light trucks between 2017 and 2025, resolving a contentious negotiation over how to cut vehicles’ greenhouse gas emissions.

The agreement would require U.S. vehicle fleets to average 54.5 miles per gallon or 163 grams per mile of carbon dioxide equivalent by 2025, which represents a 50 percent cut in greenhouse gases and a 40 percent reduction in fuel consumption compared with today’s vehicles, according to sources briefed on the matter.

While the proposal falls short of the 62-mpg standard that environmental and public health groups had lobbied for, it represents a significant step in federal curbs on tailpipe pollution.

It would require a 5 percent annual improvement rate for cars between 2017 and 2025. Light trucks would be required to have a 3.5 percent yearly efficiency improvement between 2017 and 2021, rising to 5 percent between 2022 and 2025, according to the sources, who asked not to be named because the details have not been announced publicly.

The compromise would build upon a landmark accord President Obama forged in 2009 with automakers, environmentalists, unions and California officials, who are allowed to set their own vehicle emission standards under the Clean Air Act. California was the first state to regulate greenhouse gas emissions from cars and light trucks. More than a dozen states have since adopted those restrictions, sparking a legal battle between U.S. automakers and California.

The White House press office issued a statement Wednesday saying the president would unveil the details of the program Friday at the Walter E. Washington Convention Center.

“This program, which builds on the historic agreement achieved by this administration for Model Years 2012-2016, will result in significant cost savings for consumers at the pump, dramatically reduce oil consumption, cut pollution and create jobs,” the statement said.

That first-ever national program for vehicle greenhouse gas emissions mandated that by 2016 cars and light trucks must average 31.4 mpg and 250 grams per mile of carbon dioxide equivalent. In 2010, the U.S. car and light-truck fleet averaged 28.3 mpg and 314 grams per mile.

But the battle over the second round of standards was hard fought, with environmentalists, California and union officials pressing for deep cuts and auto manufacturers maintaining that it was hard to predict what fuel efficiency gains would be possible more than a decade from now. When an agreement was in doubt, California had threatened to set its own, stricter fuel efficiency requirement.

Stanley Young, spokesman for the California Air Resources Board, wrote in an e-mail Wednesday, “We anticipate that the agreement will provide strong standards that benefit the nation and recognize and build on California’s leadership role in air quality and climate protection.”

The White House originally pushed for a 56.2-mpg standard, but automakers demanded a carve-out for pickup trucks, which continue to rank among their top annual sellers. That provision lowered the average fuel efficiency gains to 54.5 mpg and won the support of ChryslerFordGeneral Motors, Honda and Hyundai.

While declining to talk about the details of the agreement, GM’s Washington spokesman Greg Martin said in an interview that he was pleased the two sides were able to reach a consensus.

“The talks over the last few weeks have yielded real progress, and we’re hopeful there’s a way to improve fuel economy but retain customer choice and the industry’s recent resurgence,” Martin said.

Environmentalists, by contrast, said they would withhold judgment for the moment on whether the agreement would deliver sufficient reductions in greenhouse gas emissions and oil consumption.

“Until the White House provides us the full details, we are not in position to assess whether this is a strong proposal or whether there are any significant flaws,” said Roland Hwang, transportation program director for the Natural Resources Defense Council. “From what we’ve read, there are certainly aspects that are encouraging but there are potential loopholes which could be troubling. Now it appears there is an agreement, it’s time for the auto industry to work in good faith to not exploit the loopholes that threaten to undermine the consumer and pollution benefits.”

Michelle Robinson, director of the Union of Concerned Scientists’ Clean Vehicles program, said, “The Union of Concerned Scientists considers this a positive milestone on the road to strong vehicle and fuel efficiency standards and the pollution reductions, energy security benefits and consumer savings they can deliver.

“There are still important details that need to be finalized that will determine the overall success of this program. . . . We anticipate that as this program is implemented and consumers get behind the wheel of more and more clean, fuel efficient vehicles, it will be clear that we can go even farther.”

The White House agreed to provide credits for hybrid pickup trucks and for technologies that are not accounted for in testing that determines compliance with federal standards, such as louvered grilles, solar roof cells and thermoelectric waste exhaust.

The deal also includes a midterm review by the spring of 2018 that will address whether standards for 2022 to 2025 are on track. The assessment will be conducted by the Environmental Protection Agency, the National Highway Safety Transportation Administration and the California Air Resources Board, after which the EPA will determine if any changes are needed.

Ending Oil Subsidies? That Would Just Make Too Much Sense…

End Big Oil Subsidies

By Carl Gibson, US Uncut
Posted on July 14, 2011, Printed on July 15, 2011
http://www.alternet.org/newsandviews/634212/us_uncut%3A_end_big_oil_subsidies%21

In Mario Puzo’s The Godfather, a character named Don Fanucci is known as a ruthless, greedy back hand extortionist who skims a regular “protection” fee from those who operate in his neighborhood. Fanucci even threatened to disfigure the daughter of a man who refused to pay him, or allow him to “wet his beak.”

Right now, Congress allows big oil companies to wet their beak with $4 billion per year in subsidies paid directly by  the taxpayers. These are the same oil companies who are charging us $4 per gallon at the pump, making record profits every quarter, and paying $0 in taxes. In fact, ExxonMobil, the largest oil company in the world and beneificary of these subsidies, made $19 billion in profits in 2009, and received a $156 million refund check from Uncle Sam instead of paying federal taxes.

At a time when Congressional GOP leaders like John Boehner and Eric Cantor are holding the debt ceiling hostage, demanding Medicare cuts as a ransom note, why hasn’t Congress voted to stop wastefully subsidizing these tax-dodging oil companies? Big oil doesn’t need taxpayer help– in fact, ExxonMobil posted a 53% profit increase in January 2011, amidst skyrocketing gas prices. All taxpayers get in return is more pain at the pump, as we continue to funnel billions into the coffers of the richest corporations on record.

A common-sense legislative solution, H.R. 601, would have ended all of these subsidies for 5 years, saving taxpayers an estimated $40 billion. The extra revenue could instead be used to “uncut” budgets for programs that taxpayers actually depend on. The proposed $11.2 billion in cuts to early childhood education, $4.1 billion in job training programs for the unemployed, and $4.6 billion in teacher training and after school programs could all be reversed if we simply ended the parasitic relationship between tax-dodging oil companies and the taxpayers they’re bleeding dry.

Instead, Republicans voted NO to ending these subsidies, while simultaneously asking for more harmful budget cuts and rolling back Social Security and Medicare benefits.

Why are we asking seniors to foot the bill by cutting back on their health care, instead of ending oil subsidies? Why is President Obama discussing cuts to Social Security instead of demanding Republicans stop subsidizing big oil’s greed? Why are teachers, cops and firefighters being laid off while oil companies like ExxonMobil are sucking up billions in taxpayer dollars? Why are we giving away valuable taxpayer money to companies that are charging folks an arm and a leg every time we fill up?

When a caller confronted Rep. Paul Broun (R-GA) on the Jim Bohannon show last night, he went on record stating he would be for ending energy subsidies and closing corporate tax loopholes. Its time for Congress to put our money where their mouth is, stand up for their constituents and end the bailouts for big oil. Our leaders need to have the spine to say no to Fanucci when he asks to wet his beak on the taxpayers’ dime, and demand that these tax-dodging oil companies pay their fair share just like the rest of us.

Drill Everywhere.

GOP Presidential Candidate, Rick Santorum, believes that global warming is fake and that we should “drill everywhere.” Silly Rick, science is for scientists!