Home' Greymouth Star : March 3rd 2015 Contents Greymouth Star
4 - Tuesday, March 3, 2015
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uLetters to the editor
1815 - Following piracy in the
Mediterranean, the United States declares war
on the Bey of Algiers. After the American
threat to bomb Algiers, hostilities ended swiftly
in August 1815.
1869 - Death of King Billy
(William Lanney), last full-blood
Aborigine in Tasmania.
1931 - The Star-Spangled Banner
officially becomes the national
anthem of the United States.
1943 - 178 people are killed in
an accident at an air raid shelter in London’s
Bethnal Green, in World War Two.
1959 - Death of Lou Costello, American
actor famous in comedy duo with Bud Abbott.
1963 - US government announces that its
project of landing men on the Moon will be
followed by a large manned laboratory orbiting
1974 - Turkish airliner crashes in forest near
Paris, killing 345 people.
uWest Coast yesteryear
uToday in history
Thomas Otway, English dramatist (1652-
1685); George Pullman, American inventor
of Pullman railway carriages, (1831-1897);
Alexander Graham Bell, Scottish-American
inventor of telephone (1847-1922);
Jean Harlow, US actress, (1911-
1937); James Doohan, US actor
(1920-2005); Miranda Richardson,
British actress (1958-); Jackie
Joyner-Kersee, US athlete (1962-);
Tone-Loc, US rapper-actor (1966-);
David Faustino, US actor (1974-);
Ronan Keating, Irish pop singer (1977-); Jessica
Biel, US actress (1982-).
“America is a tune. It must be sung together.”
— Gerald Stanley Lee, American clergyman
and author (1862-1944).
“Consider the lilies, how they grow: they
neither toil nor spin; yet I tell you, even
Solomon in all his glory was not clothed like
one of these. ” — (Luke 12.27).
In Greymouth over
the last few months,
there have been
moments for three veteran car enthusiasts
who have been working hard to get their
old cars into top-performing order, or even
performing order, for the big international rally
starting in Christchurch on Saturday. Mr Ace
Boustridge had the most trouble getting over
to the starting point of the rally, having barely
completed the 1911 Cadillac before setting off
The first one to go over to Christchurch was
Mr Eric Dey ’s 1922 Model T. He had his Ford
on the road only a week ago and chugged over
the hill at a speed of about 30-35mph. The
Alldays and Onions owned by Mr Ronson
Clarke went over on Sunday at a speed of
about 33mph in spite of trouble on the Reefton
The rally is an annual event of the
International Federation of Vintage Car Clubs.
It is the biggest in the world. Up until now it
had never been held outside Europe.
“The West Coast will certainly not be in my
itinerary again,” said the driver of a much-
travelled Landrover to a Greymouth Evening
Star reporter yesterday. He gave a reasoned
account of some unfortunate aspects of his trip
to the glaciers and urged that if the Coast was
to capitalise on its tourist potential there was
much to be done.
His main criticisms were: Practically
no tourist information available; lack of
camping facilities; little to do or see in either
Greymouth or Hokitika; lack of a public
relations officer; lack of evidence of ‘West
Coast hospitality’; lack of weekend shopping
uFood for thought
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utch church bells that for
centuries have tolled to
warn of floods across the
low-lying countryside are
sounding the alarm for a
new threat: earthquakes
linked to Europe’s largest natural gasfield.
“Money can buy a lot of things, but a
building like this cannot be replaced,”
said Jur Bekooy, a civil engineer with the
Groningen Old Churches Association,
pointing to cracks in the ceiling and walls
of the 13th-century Maria Church in the
village of Wester wijtwerd.
Long ignored, voices like Bekooy ’s are
being heard as elections loom this month
and following a damning report from the
independent Dutch Safety Board.
It accused the government and the
field ’s operators, Royal D utch Shell and
Exxon Mobil Corp, of ignoring the threat
of earthquakes linked to the massive
Groningen gasfield for years.
There are now questions about the future
exploitation of the field that lies under
the northern province of Groningen, with
implications that reach well beyond its
significance for Dutch state coffers.
Lessons from Groningen, which lies
far from any natural faultline, feed into a
debate over the threat posed by hydraulic
fracturing in the United States, China,
Britain and elsewhere.
The world’s 10th largest gasfield,
Groningen is expected to supply the bulk
of the Netherlands’ annual gas needs of
20-30 billion cubic metres until the mid-
The D utch also have contracts to sell
40-60bcm annually to buyers in Germany,
Britain, Italy, Belgium and France. In all,
Groningen and a few smaller Dutch fields
supply 15% of Europe’s gas consumption,
providing one alternative to Russian
When Economic Affairs Minister Henk
Kamp recently ordered production at
Groningen cut by 16%, gas prices jumped
across Western Europe.
Groningen has been in continuous
production since 1963. As far back as
1993 small quakes were definitively linked
to its output. But in the late 2000s, they
suddenly became more frequent and
With government finances under
pressure from the 2008 financial crisis,
production at Groningen had been
ramped up from around 30bcm in 2007 to
more than 50bcm by 2010.
The money generated helped the Dutch
cushion the blow of austerity policies
championed by the Cabinet.
As Prime Minister Mark Rutte publicly
pressed southern European governments
to bring their spending under control,
Dutch government gas revenues of
$22 billion by 2013 were about the size of
the national deficit.
Without gas, the deficit that year would
have doubled from 2.5% to 5%, violating
eurozone budget rules.
But on August 16, 2012, an earthquake
with its epicentre under the town of
Huizinge marked the beginning of
the end for aggressive output from
It registered 3.6 on the Richter scale,
larger than any predicted by engineers
at NAM, the joint venture field operator
between Shell and Exxon.
“Until the Huizinge earthquake, we had
1100 damage claims in 20 years,” said
NAM spokesman Sander van Rootselaar.
“After the quake we had more than
Earthquakes caused by gas production
are usually small, unless they happen near
a fault line and can trigger a larger natural
But in Groningen they occur close to
the surface, damaging stone and brick
buildings never designed to withstand
Of the 50 churches located above the
field, some 40 have been affected, said
When parliament gathered in The
Hague to debate gas policy in early
February, church bells all across
Groningen province were rung in protest.
NAM has so far put aside $1.34b to
compensate damage claims.
More claims are rolling in, including
after a 2.6 quake registered in the town of
Appingedam last week.
But safety is the bigger issue.
In January 2013, the regulatory agency
tasked with overseeing gas production
warned the government of a “linear
relationship” between the rate of
production and the chance of earthquakes
It said it could not rule out quakes
measuring 4 or even 5 on the Richter
scale, with risk to human life.
The State Supervision of Mines advised
production be cut “as quickly and as much
as is possible and realistic.”
But that year, with the D utch economy
in recession, the Groningen field
produced 53.4bcm, its most in decades.
“In 2013, when it was very cold
in Europe, there was enough gas in
Groningen to really run it hard,” said
Thomson Reuters Point Carbon analyst
The earthquakes continued. As the
Dutch economy showed signs of recovery,
Kamp ordered production temporarily
lowered, to 42.5bcm for 2014 and
39.5bcm for 2015.
Then, in February, the Safety Board
issued its finding that NAM and the
government had put profits first and
“failed to act with due care for the safety
of citizens in Groningen”.
After previewing the conclusions,
Kamp on February 9 ordered Groningen
production cut to 16.5bcm for the first
half of 2015, implying a cut to 33bcm
for the year. Prices in North-west
Europe surged as much as 20% in
Gas Terra, the Netherlands’ national
trading company, was forced to purchase
gas on the open market to meet its
The immediate impact of the Kamp
output cut on prices has since faded,
helped by mild weather across Europe and
“The underlying drivers are still bearish,”
analyst Sanderson said, citing new LNG
supply coming on line in Qatar and
Trinidad, and prospects for more gas from
Russia in the fall.
“But Groningen has helped at least put a
question mark over how bearish they will
be,” he said.
What is clear is the market is no longer
counting on a return to higher production
levels from the Netherlands. And without
the D utch acting as swing producers in a
supply pinch, increased price volatility is
Gas Terra has said it will sign no new
contracts, nor extend current ones as they
With Dutch provincial elections set
for March 18, parties across the political
spectrum are demanding production be
kept at current levels or reduced.
Kamp has delayed any decision until
July 1, saying he awaits more expert advice.
In the journal Science last month,
United States scientists said a global
increase in gas-related earthquakes
appears mostly linked to modern
exploitation techniques — not only
hydraulic fracturing, but also underground
waste-water disposal and injecting
carbon dioxide into depleted reservoirs to
“Although the United States is our
focus here, Canada, China, the United
Kingdom and others confront similar
problems,” they wrote.
The threat “can be reduced” with a
combination of better seismic tracking
and access to industrial data on injections,
said Art McGarr of the US Geological
Sur vey, lead author of the Science article.
That would “allow us to detect induced
earthquake problems at an early stage,
when seismic events are typically very
small, so as to avoid larger and potentially
more damaging earthquakes later on,” he
With bans on fracking in several
European countries already in place, the
concern about earthquakes will give gas
opponents further ammunition. Public
attitudes against gas production have
quickly hardened in the Netherlands.
On the North Sea island of
Terschelling, members of the city council
voted unanimously last week against
exploitation of a gasfield with estimated
reser ves of 2.5 to 4.5bcm.
In Groningen, activist Pi van Weert,
whose home was damaged by quakes,
says he wants the province to declare
independence from the Netherlands to
halt gas production completely.
“If I ’m honest, there is no hope” for that,
he said. “As long as the benefits outweigh
the costs, they ’re going to keep drilling.”
A view of a gas production plant is reflected in the roof of a car in ‘t Zand in Groningen.
Luc Cohen and Ivan Castro
Venezuela, once a proud exporter of
premium coffee, has been reduced to
swapping crude oil for growing volumes
of Nicaraguan coffee beans to make sure
worsening economic turmoil does not
prevent people from getting their caffeine
For the first time on record, coffee
imports this year will exceed the bean
output of Venezuela’s centuries-old
coffee industry, according to United
States government estimates. The South
American country’s shift from net coffee
exporter to substantial importer has
altered flows in regional markets, boosting
prices for some varieties of coffee.
It is also another sign of how the collapse
in crude oil prices, and resulting pressures
on an already deeply troubled Venezuelan
economy, has forced the government of
the Opec member to take extraordinary
measures to keep supermarket shelves
stocked with basic goods.
Falling coffee production and near-
record demand has forced it to buy more
higher-priced foreign beans, according to
Nicaragua’s export figures and inter views
with producers and traders in Venezuela
The US Department of Agriculture
expects Venezuela’s demand to reach 1.3
million 60kg bags in the crop season,
which ends in September, with the nation’s
production withering to just 660,000
bags, its third-smallest crop on record
since 1960-61. To make up the difference,
Venezuela will have to import a record
685,000 bags, the USDA estimates.
A leaf disease has ravaged crops and low
domestic retail coffee prices set by the
Venezuelan government are prompting
farmers to abandon coffee production.
They are switching to cattle or leaving
agriculture altogether and moving to cities,
sources familiar with the Venezuelan
coffee industry say.
Prices for key farming materials like
fertiliser have skyrocketed due to the
collapsing Bolivar currency and the
resulting 68-percent inflation rate. As
farmers are squeezed, the quality of beans
they can produce suffers.
To keep up with rising demand,
Caracas imported almost 70,000 bags of
Nicaraguan beans in the last three months
of 2014, more than any other country and
more than 60% of the amount it brought
in from Nicaragua in all of the 2013-14
crop year, data from Nicaragua’s Centre for
Export Processing (Cetrex) show.
The purchases are carried out under the
Petro-Caribbean Agreement, in which
Venezuela ships subsidised crude oil to
political allies like Nicaragua in exchange
for basic goods, traders and other sources
familiar with the arrangement said.
Nicaragua received 27,000 barrels of
crude oil and refined products a day from
Venezuela in 2013, according to the most
recent data from state-run oil company
Petroleos de Venezuela.
PDVSA, the State-owned oil company,
could not be reached for comment.
Albalinisa, a PDVSA-controlled
Nicaraguan company that does the coffee
trades, did not respond to requests for
Coffee purchases likely spiked late in
the year because the government wanted
to make sure families had enough for
Christmas celebrations, a source familiar
with Venezuela’s coffee industry said. “ In
order to secure the volume they need,
they had to pay a better price than the
one they ’re offering in the local market,”
said Jose Angel Buitrago, president of
Nicaragua’s Coffee Exporters Association.
Cetrex data show Venezuela paid on
average $2.21 a pound for its Nicaraguan
coffee late last year, 50% more than prices
paid by US buyers.
But despite the higher prices, the quality
of Nicaraguan coffee sent to Venezuela
was lower than that arriving in
the United States, said Vicente
Perez, executive director of
Venezuela’s Fedeagro, which
represents the country’s
farmers. Some of the beans
had already been rejected by
The spike in Venezuela’s
bumper-priced imports has
boosted the premium for
Nicaraguan beans elsewhere
too. In the United States,
Nicaraguan coffee has been
trading at its highest premiums
to futures on ICE Futures US
in eight months.
Venezuelans who cherish
their guayoyo, a watered-
down espresso popular in
the country, complain about
shortages and what they say
is low quality coffee in the
“ For six months I’ve been
feeling like what I drink is
water that I flavour with
sugar,” said Francisco Naranjo,
55, in a coffee shop in the
well-to-do east side of Caracas.
He paid 40 bolivars for his latte, which is
more than $6 at the official exchange rate,
higher than a similar coffee costs in the
He recently bought a kilo of price-
controlled, State-produced coffee at a
supermarket for just 7 bolivars ($1.11), but
he had to wait in line for 45 minutes, he
The spike in imports marks a new low
in a decade-long decline for Venezuela’s
Two hundred years ago, it was the
world’s third-largest coffee exporter by
some estimates, and coffee and cocoa
production constituted its main economic
“ Before Colombia even planted coffee,
Venezuela was already exporting coffee,”
said Perez of Fedeagro.
While the discovery of crude oil in the
early 20th century shifted its economic
focus, small-scale farmers in the
mountainous Andean region continued to
grow smooth, mild high-quality arabica
beans for domestic use and export to
markets including the United States.
It regularly produced more than 1
million 60kg bags between the 1970s and
1990s, roughly in line with production
from coffee exporters Costa Rica or
Tanzania today, and in 1998-99 exported
550,000 bags, about as much as El
Salvador today, according to USDA data.
Plentiful crops helped foster a rich coffee
culture with people drinking both at
home and in cafes, but falling supplies and
quality are forcing some to change habits.
“ I’ve already started to drink more tea,”
said Ricardo Perez, 56, as he drank a
100-bolivar cup of coffee with milk at an
upscale coffee shop in the capital.
Over the past 15 years, coffee farming
has gone into long-term decline. When
late socialist President Hugo Chavez
took office, he implemented retail price
controls, and later expropriated private
Last August, his successor and current
president Nicolas Maduro banned exports
of coffee and other basic items.
Still the price caps and the population’s
taste for high-quality coffee have kept
domestic consumption up, prompting an
explosion in imports beginning in 2010.
Venezuela forced to import coffee beans
Venezuelan coffee beans from private farms are seen at a roaster in Caracas.
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