Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.energy From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: energy Tue, May 26 1992 Date: Tue, 26 May 92 05:20:39 EDT Message-ID: 05-26 0000 DECISIONLINE: Energy USA TODAY Update May 26, 1992 Source: USA TODAY:Gannett National Information Network PRICES LIKELY TO BE PUSHED UP: OPEC's decision to boost oil production by just 481,000 barrels a day will likely push prices to $21 a barrel or higher, but may encourage cheating, the Middle East Economic Survey said Monday. The oil industry newsletter said that the accord, reached Friday in Vienna by the Organization of Petroleum Exporting Countries, has "a credibility problem." (For more, see special OPEC package below.) CRUDE OIL CLOSES UP: Financial markets in the United States were closed Monday for the Memorial Day holiday. Friday on the New York Mercantile Exchange, light sweet crude oil closed up, gaining 4 cents to close at $20.94 per barrel. TAX JUGGLING AT DEBATE'S CENTER: Economists and environmentalists have begun to debate major steps the United States could take if it must curb fossil fuel use to stave off global warming. One is a carbon tax. Some favor lowering taxes on jobs and investment and offsetting them with new taxes on pollution, consumption or both. Falling energy prices and oaring federal spending has sharpened the debate. FOSSIL FUELS ARE CHEAPER: Fossil fuels now cost about 75% of 1980 prices, adjusted for inflation. Federal spending is claiming a greater share of the national output than ever. The result: No incentive to conserve energy or create jobs. The United States my be able to cap emissions of greenhouse gases by 2000 by boosting efficiency. OIL BID DEADLINE EXTENDED: In Alaska, Gov. Walter Hickel's administration has extended by a week the deadline for bids on a $1 million nationwide media campaign to support opening of the Arctic National Wildlife Refuge to oil exploration. Only four companies have submitted bids. Officials say the extension is because of confusion in the wording of the request, not in the lack of bids. MONTEDISON REPORTS RESULTS: The board of directors of Montedison S.p.A. has reviewed the group's results for 1991. Montedison Group had 1991 consolidated net income after minority interest of $138 million versus $456 million for 1990. Gross operating income for the agro-industrial sector rose to $840 million for 1991 from $730 million in 1990 partly because of the recovery of profitability in industrial oils. REFINERY FACES EPA FINE: The Environmental Protection Agency has proposed a $131,700 fine against the Vickers gasoline refinery in Commerce City, Colo. The firm is accused of exceeding limits on sulphur dioxide emissions on six days last spring and missing some air pollution tests. ELECTRIC CO. INCREASE OK'D: Western Massachusetts Electric Co. in Springfield has been granted a $23 million rate increase over the next two years by the state Department of Public Utilities. It's part of an agreement designed to halt 10 years of annual rate hike requests. CUSTOMERS TO GET REFUNDS: A $28.50 average refund will appear as a credit on the June bill of 110,500 Michigan Gas Utilities residential customers and 10,800 commercial customers will also receive an unspecified refund. The State Public Services Commission ordered the $2.3 million in refunds, citing 1990 overcollections. SPECIAL PACKAGE ON OPEC: DEAL HAS `CREDIBILITY PROBLEM': While OPEC's decision to boost oil production likely will raise prices, the move may encourage cheating, according to the Middle East Economic Survey, which reported the accord reached Friday has "a credibility problem." The agreement sets July-September production at an estimated 23.46 million barrels a day. Editor Ian Seymour says the new ceiling is below forecasts for demand. `POWERFUL INCENTIVE' TO CHEAT: Seymour says the forecasts for oil demand run as high as 23.7 million barrels a day. Estimates for the fourth quarter run as high as 25.9 million barrels a day. "A low ceiling is in itself a powerful incentive for cheating on quotas," he said. "Whenever the ceiling is set appreciably below anticipated market demand, that slice of demand ... inevitably gets satisfied by somebody." KUWAIT PRODUCTION UP: The increase in the overall OPEC output from 22.98 million barrels a day, set in February, was mainly to accommodate Kuwait's increasing production after the Gulf War. Kuwait's quota was raised from 812,000 barrels a day to 1.18 million. More oil could hit the market when Iraqi crude becomes available. Iraqi exports were blocked by U.N. sanctions after Iraq invaded Kuwait Aug. 2, 1990. (End of package.) Energy Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM