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Revised auto fuel efficiency standards win the support of GM, Ford, Chrysler, Honda and Hyundai. These standards would lower the average fuel economy to 54.5 miles per gallon by 2025, a decline from the initial target of 56.2 mpg. The revised proposal calls for a 5% average annual increase in fuel economy for cars and a 3.5% increase for light trucks through 2021. After 2021 both cars and trucks have to meet a 5% annual increase. Useful innovation in the new standards is to provide credits for hybrid pickup trucks, and give credits for technological advances that improve fuel economy but don't show up in EPA tests such as the one that shuts of the engine when a car is idling. Other credits would be offered for solar roof panels on electric vehicles. It includes incentives for "promoting early market penetration of tailpipe CO2/fuel consumption reducing technologies." This comes after a long period in which the U.S. lagged behind other countries in fuel economy. It could be one of the main achievements of the Obama administration, and help build a new auto industry around new technologies....

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Daniel Bell at Tsinghua University in Beijing, Andy Xie, economist in Shanghai, Zhang Habin, professor at Peking University, and Michael Meyer, author and hutong expert, talk about what issues are important. Bell says Obama mania is absent among the young in China, though they respect his intellectual abilities, and Chinese are not looking to the USA for ideals. They are looking to Chinese culture and characteristics, and democracy is seen in this light with emphasis on Chinese characteristics. This means the US has to engage at a deeper level with China. Treat China as an equal with something positive to offer, says Bell. Andy Xie is concerned about the US-China relationship, based as it is today on tenuous grounds, where what happens in Florida and California can have a significant and immediate effect on what happens in Guangdong. With 70% of the furniture sold in the US made in China, the effects are immediate when housing slumps. So he says the US lost 3 million jobs since the subprime crisis, and China lost 20 million jobs. And for the 5 million college graduates coming out in 2009, they will be adding to the 5 million college graduates from previous years who are seeking jobs. Ten million unemployed college graduates mean China is seeing whole new conditions as the backdrop of US-China relations. Habin says its important for the US to set an example in climate change and emissions of greenhouse gases. The US should sign an agreement with China with binding targets, make its technology available to China, and provide development aid to make this technology and other assistance accessible to China. Cooperation on this issue is vital to future relations says Habin. Meyer says the hutong, small enclaves of old Beijing with lanes and small homes, that the city officials call neighborhood slums, but actually have a sense of community and a vibrant life, are worth preserving. He questions the Walmart and Pepsi commercial culture, and questions building of the American car culture urban plan that generates pollution, lacks community feeling, and is not energy efficient. In fact he has a point here, because the US is shifting away from its own older urban planning design that encourages urban sprawl, as in California. The new Sacramento urban plan that is being adopted for the future in America has energy efficiency, more community and easy interaction, less urban sprawl in mind. See the link to this. But Meyer says Chinese planners insist on their right to make the same mistakes American urban planners made. And Meyer quotes the head of the first Chinese environmental NGO, who says, "if the Chinese want to live the American way of life we need 7 earths to support them". Which raises a disturbing question of the US postwar way of life with its large SUV's, urban sprawl, and less sense of community. Wouldn't the US have to join India and China in the worldwide scramble for resources to preserve this way of life? Just this week China signed $51 billion of deals for natural resources, see the link. And is the rapid decline of the SUV, just the first sign of changes that are taking place, with the economic changes in coming years leading to grappling with issues of better quality of life, smaller quantity of things, health and obesity and lifestyles, community, all coming to the fore. ...

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Pierre Razoux, a French historian provides this account of the Iran-Iraq war that lasted from 1980 to 1988, at a cost of 680,000 people killed and $1.1 trillion in war destruction and money diverted from the economy. In 1980 Saddam Hussein of Iraq launched the war by attacking Iran which had just come under the Ayatollah Khomeini with the fall of the Shah of Iran in 1979. The war dragged on for 8 years with Khomeini persisting in the war. With U.S. and Saudi policy to increase production bringing the price of oil down from $30 to $10 designed to bring Iran and Iraq to the peace talks, as well as the Soviet Union to withdraw from Afghanistan, all three being major oil producers. The dollar also weakened by 37% during this period. The diplomatic isolation of the Khomeini regime made it more difficult for Iran to buy arms on credit than Iraq could, leading to the war ending with Iran finding it no longer possible to continue the human losses. The Carter administration, particularly with National Security Advisor Brzezinski, tilted towards Iraq to oppose Soviets in Afghanistan, and the Saudis also supported Iraq during the early period. Under president Reagan the U.S. began covert and direct assistance to Iraq to prevent an Iraqi defeat early in the war. Rumsfeld visited Baghdad in December 1983 and March 1984 to organize the U.S. effort to oppose Iran. This may have laid the seeds for future conflicts that lasted through the administrations of the elder and junior Bush. As Razoux points out the Revolutionary Guards became entrenched from this period in Iran's history, making it difficult for election process to work or elected governments to operate. 23 months following the end of that war in 1988 Saddam Hussein launched a war on Kuwait, leading to the U.S. led Gulf war and the entry of the U.S. into a ground combat role, which was followed by the invasion of Iraq under George Bush after 9/11 attacks. The twin wars in Afghanistan and Iraq are estimated to have cost the U.S. over 1 trillion dollars. The result today is largely the division on the ground into Shia regions under the Revolutionary Guards and the Shiite government in Baghdad, and Sunni regions led by Islamic State and autonomous Iraqi Sunni tribes, ignoring the Iran-Iraq boundaries set in the colonial period by the French and the British. In all the amount spent in the Khomeini-Saddam war of $ 1 trillion being about $2 trillion in today's money, and the $1 trillion spent by the U.S., means about $3 trillion has gone into the wars in this region. This comes at a time of deficits in government budgets in the U.S. and a deep recession in the U.S. and Europe. It also explains why the U.S. public is reluctant to take even the minor action such as giving a standoff "no-fly zone" protection to the rebels in Syria, and supported the Obama administration in its reluctance to keep even the basic military force in place to protect its diplomatic mission in Libya, where the cost would be small relative to earlier enlarged military missions under the two elder and junior Bush administrations. The result is that refugees are pouring into Europe from Syria and Libya, through Turkey. Turkey itself is host to millions of refugees in camps along its border. The vacuum and the withdrawal of the Obama administration from the region has led to the rise of Islamic State with covert assistance from Sunni regimes in the region to counteract the growing influence of Shiite Iran. It also may explain the Iranian people's support for the nuclear weapons effort through years of sanctions, leading finally to an agreement with the Obama administration that relaxes sanctions in exchange for a future possibility of acquiring nuclear weapons. Lost in the conflict is the Arab Spring of 2012-2013, with the Tunisian democracy the only surviving result of that movement for democracy and awakening among Arab peoples. The Reagan administration in its aggressive anti-Soviet position made large errors- including ignoring human rights abuses and use of chemical weapons in the Iran-Iraq war, by supporting Iraq and reversing position after Iraq's invasion of Kuwait, having a disastrous effect on the entire region decades later. Much of the Obama administration's reluctance for any action may stem from the U.S. role in this period and its consequences of protracted conflict. ...

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During 2012 and 2013 the U.S. put pressure on China and India to cut oil imports from Iran to increase the effectiveness of sanctions. As negotiations eased the sanctions, China increased oil imports in 2014 by 30% in 2014 over the prior year. China's Foreign Ministry sees a "win-win spirit" in the nuclear deal that opens up economic relations with Iran. Analysts say China has setup three new storage facilities on its eastern coast with about 45 million barrels of new capacity, which could be filled with new supplies as its growth slows and demand decreases. China's imports were about 7 million barrels a day in June 2015.

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Through 2015 oil companies expect to spend $15 billion a year on pipelines and to retrofit refineries to process heavy sands Canadian crude, and production of heavy sands crude is expected to go up to 3.7 million barrels a day by 2020 from 1.2 million barrels a day today. This is changing the way crude pipeline map looks as the diminished supply from Mexico and Venezuela means less crude going north, and more going south from Canada.

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Marathon gets 20% ownership of Athabasca oil sands from Western of Calgary.

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The oil sands project by the Syncrude consortium which includes 12% ownership by Petro-Canada came in at twice the the original US$4.1 billion estimate. Petro -Canada faces similiar problems in its own project to produce 280,000 barrels a day by 2014. The project is expected to cost US $24.8 billion. Cost are rapidly escalating for oil sands projects and it require very good project execution skills. Oil price below $60 could change the viability of these projects.

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Alberta will get more royalties from the Canadian oil industry of about $1.4 billion or 20% more han before, after increases in oil royalties announced by Alberta's premier following a government review panel's reports.

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Carmakers around the world are finally getting it. Customers want vehicles that deliver better mileage and lower emissions and are environmentally friendly. And their is now a race among the automakers to see who can get there first. After the sea change at the Frankfurt Auto Show, the same is expected t happen at the Tokyo Auto Show thats coming up with a large numbert of new technologies, hybrids and environment friendly vehicles on display there. Lawrence Burns, V.P for R&D and Strategic Planning at GM points to this new DNA for the automobile. Maynard says GM plans to introduce a new hybrid version of its lineup every 3 months for the next 4 years, 16 in all. Mullaly of Ford and Juim Press at Chrysler are committed to pushing forward. And Toyota is beginning its development of a vehicle that would compete with GM's Volt which would run on electricity.

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Senator Schumer calls it a "momentous 24 hours here in the US Congress, a legislative one two punch that you rarely see." Schumer negotiated a major climate change action bill for $369 billion in the Senate, that also covers tax changes to cover costs, and helps cut drug and health care expenses of Americans. The second quarter shows healthy job gains of average 375,000 a month and unemployment at 3.6%. The economy declined by 1.1% but much of this was from a slowdown in home and business construction sectors sensitive to higher interest rates and from higher inventory. Consumer spending increased by 1% during the quarter. The Fed's series of 0.75 percentage points interest rate increases had softened inflation expectations before they get entrenched in the economy. This makes it possible for Democrats to present a message to ordinary Americans that president Biden is getting things done with 2 legislative achievements. A $280 billion bill for investment in the semiconductor industry in the US. And a huge win on climate change with the $269 billion Schumer is negotiating in the US Congress. It is the opposite of what Republicans are saying is Biden's failure to tackle inflation. Appropriately Biden and Schumer are calling this the bill the Inflation Reduction Act of 2022. How did Schumer get this done? After the Ukraine war and EU decision to shut down Russian oil supplies, cut oil and gas use by 15%, and the climate change action inducing fires and floods, there is increasing awareness about climate change action as vital for our future all over the world. This gives more confidence to Democrats to negotiate a temporary continuation of oil and gas, with increased exports of US LNG to Europe. Senator Manchin from an energy producing state of West Virginia was brought over to Schumer's side with this idea. What Biden gets is a 40% reduction of US carbon emissions over 2005 levels, enough to get within reach of the 50% he promised at COP26 in Glasgow. It is a win-win for all sides and for the American people, and shows that patience and hard work, and persistence in the face of adversity can bring results. ...

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Merkel's leadership as Germany goes through the economic crisis. There is not much enthusiasm for further reforms among the Social Democrats or the Christian Democrats. Other than raising the retirement age to 67, the mood is not for any changes in that direction. The economy will contract by 6.1% but Merkel's decision is not to go in for a big stimulus under pressure from the US, and instead stay with the status quo combined with help to workers for unemployment benefits and for retention of workers by companies. As elections approach Merkel is considered favorably, and according to a recent poll by Forschungsgruppe Wahlen nearly 60% are satisfied with the grand coalition of the CDU and the SPD, 78% think Ms Merkel has done well as chancellor, and 58% want her to remain on the job. Actually Merkel's popularity is behind the CDU's prospects, the CDU itself is popular among only 35% of voters. Her analytical habits from her training as a physicist show in the way she is governing, which is thoughtful, and connects well with voters. Merkel benefits from the reduction in unemployment. Unemployment fell from around nearly 5 million in 2005 to around 3 million in 2008. The risk is that Merkel's popularity may be affected by an increase in unemployment to 5.1 million from the averaage of 3.3 million in 2008, according to an OECD estimate. Merkel stands behind a German response to the crisis which is to support the priciples of a social-market economy, make unemployment as least painful as possible to the jobless, to keep every job that can be saved in the nonfinancial sector with a 115 billion euro "Germany fund" providing guarantees and credits to companies that are in trouble because of the credit crisis. Stimulus packages of 64 billion euros supported the auto industry with subsidies to car buyers, and subsidies to keep workers intheir jobs. The idea was to come up with a German version of the response to the crisis by balancing the need to respond based on German conditions, and the concerns for inflation and the budget deficit, that is shared by most Germans. THe vision offered by Merkel is that of a physicist daughter of a protestant minister in East Germany, who is low on the rhetoric and good on substance, and willing to make decisions based on careful study and discernment rather than ideology, without sharp swings in any direction. Her vision comes from her days as environment minister, which is quietly pushing Germany into the forefront of countries developing renewable energy, moving ahead in energy efficiency, with anational goal of cutting emissions by 40% by 2020. The other areas are immigration and education, both key to the future of Germany because of the huge demographic change happening there. She has afamily minister Ursula von der Leyden, who introduced "parents pay", a14 month stipend for parents of newborn children linked to salaries, and to to improve daycare by providing places for 35% of children aged three or less by 2013. And Merkel has approved 18 billion euros of additional funding for research and universities. Says Leyden Merkel has made "daycare" an acceptable term in the CDU, and made Germans accept that they are an immigration country. Which tells you that you have to look closely to find the reasons for Merkel's popularity, which does not carry the rhetoric of an Obama, but is just as effective in German conditions. There are deepseated demographic changes going on in German society, which require a cultural change, and change in mindset, such as that for daycare, immigration, and blending the best of the old in the social market economy with the new like the changes in the educational system. The Economist says that in big cities today nearly half of the children under 15 are immigrants or their children and grandchildren, who are more likely to be poorer, unemployed and with less education. ...

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Prakash and Ghosh in the Hindusthan Times remind readers that even though India has ambitious plans for renewable energy much remains to be done in shifting to clean coal technologies. An estimated 80% of India's coal plants use obsolete technologies, making this an obvious area for improvement. India plans to make solar the source of 100GW of 175GW it plans to generate in renewable energy by 2022. Yet it must not be forgotten that coal is a dominant source for the foreseeable future and shifting to clean coal technologies is an area that should get top priority from the government. Today India is the third largest in terms of carbon emissions after the U.S and China.

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Controversy about whether bringing back a revamped Ford Explorer is a good idea. Ford's Farley thinks Americans might still consider an Explorer with high fuel economy, getting it up to 28 mpg from 15 mpg. But the evidence is that Americans have soured on SUV's. Consider that during the cash-for-clunkers program more Explorers were scrapped, and by a large margin, than any other model. Sales are down from 450,000 at one time to 52,000 today. To get buyers to look at the Explorer Ford is trying to change the looks from boxy to sleeker car-based crossover , and add high tech features. In fact it is going to be built not as an SUV, but on the same architectural base as the Taurus.

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The critical exchange between oil companies and auto companies about who is at fault for the energy crisis. In one ad that ran last year, Chevron argued that "if automakers improved fuel economy across the board by just 5 mpg, we'd save over 22 billion gallons of gasoline a year." The criticism is also sparked by the high price of oil which is hurting sales of pickups and large SUV's that the automakers depend on for profits. One ad by Exxon Mobil shows a cartoon of a large SUV filling up at a gas station and hints that the problem rests with the automakers who have failed to build the kind of highly fuel efficient vehicles that are needed. The ad says that the average fuel economy of new U.S. autos has not gone up much in two decades, the small gains have been offset by the increases in the size and weight of vehicles.

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The differences in the Democratic party between conservatives and liberals that make it difficult to get things done in healthcare, energy and other areas. The lack of White House leadership in a number of areas, and in anumber of instances. The lack of Senate leadership on these issues with the Senate not having done much in energy and healthcare legislation. Add to this the influence of the $133 million that lobbyists spent in the 2nd quarter 2009 alone. The failure of Republicans and Democrats in Congress to push vigorously for cost control in the health care industry adds to these problems.

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The House Energy and Commerce Committee passes ahealthcare plan with 31 to 28 vote. The Senate version takes adifferent approach. The Senate version has moved away from the employer requirements in the House bills. The Senate committee is moving towards aproposal to require employers to contribute if their workers are getting government assisted insurance coverage. It has also moved away from the surtax on the wealthy in the House bills which is expected to raise $500 billion. Instead the Senate version proposes an excise tax on insurers for health plans that offer generous benefits. Under the current bill being considered in the Senate such a insurance policy tax could raise $180 billion. The Senate Finance Committee is also different in that instead of the public insurance option it offers nonprofit health insurance cooperatives as an alternative. There is agreement between the two parties on anumber of things so the debate will center on the public insurance option, surtax on the wealthy to pay for the plan, and the requirement for an employer mandated coverage for all employees....

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Tata Motors gets a great deal to have 2 wellknown brands in which Ford has invested some $10 billion for a billion adn half. Is favored to make the deal. Both brands may be turning the corner after years of effort and Tata's management resources and investment potential could make this a good deal for Tata Motors. But there are some risks including the ones mentioned. The US market which accounts for more than 25% of sales is declining, and the fuel saving technologies needed to compete in Europe after 2012 with new mandated emissions reductions mean that Tata will have to develop these technologies in a market where the Germans have significant advantages with their fuel saving technology development. The Halewood factory in Liverpool where the Land Rover Freelander and the Jaguar X-type are made is at risk because with total output of 261,000 Tata may decide to close one of the three factories. This acquisition will push Tata up the learning curve in American and European markets, knowledge which it can use in developing markets for new models it develops in the future with innovation and aggressive pricing....

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The influence of lobbyist on members of Congress just as the Obama administration, having studied the failure of the Clinton submitted healthcare plan try a different strategy of letting Congress come up with a healtcare plan. $133 million was spent in the second quarter alone by healthcare industry lobby interests creating headaches for reform efforts and the Obama administration.

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How companies like United Health are lobbying aggressively to shape the new helathcare legislation to their benefit. BW says the health insurers like United Health, Aetna and Wellpoint are already winning through clever and effective lobbying of Congress. Former Senator Tom Daschle works as aconsultant for United Health. Senator Conrad who has led aeffort to replace the public plan with nonprofit medical cooperatives, which would be a weaker competitive threat to insurers, is also influened by the insurers. United Health's CEO Helmsley and its person working with Congress on healthcare Simon Stevens met with Conrad on June 4. When lawmakers in Congress cite consulting group Lewin Group, that 88 million or 56% of those with employer provided coverage would desert private insurance for a government run program, they are quoting acompany owned by United Health. The Congressional Budget Ofice says these numbers are too high. United Health has used savy presentations on how to cut costs, and help Blue Dog and other Democrats articulate their positions, to gain influence in shaping the plan to their interests. United Health thus counts a lot with Matheson, and Mike Ross of Arkansas, who are prominent with the 52 Blue Dog Democrats. and with Senator Mark Warner of Virginia. And United Health put together an effective lobbbying group, even hiring the chief of staff of House Democratic leader Steny Hoyer. ...