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Transporting Crude Oil by Rail: State and Federal Action

August 29, 2014 Comments off

Transporting Crude Oil by Rail: State and Federal Action
Source: National Conference of State Legislatures

Technological advances such as hydraulic fracturing and horizontal drilling are driving the increase in oil and natural gas extraction and allowing access to shale resources in Canada and the U.S. that were previously uneconomical to develop.

In fact, the United States became the No. 1 producer of oil in the world in 2014—overtaking Saudi Arabia and Russia. The U.S. produced 8.4 million barrels per day of oil in April 2014, which is the highest monthly production volume in more than 25 years—with North Dakota and Texas supplying almost half of the total U.S. crude oil production. The rapid expansion of crude oil production in North America has increased the use of rail, truck, barge and pipeline to carry crude to refineries.

Upon extraction, crude oil is transported to refineries to be processed into useful petroleum products—such as heating oil, diesel fuel or gasoline. According to the U.S. Department of Transportation (DOT), in 2009 70.2 percent of crude oil and petroleum products were transported by pipeline while 23.1 percent were shipped by oil tankers, 4.2 percent by truck and just 2.6 percent by rail. In 2013, crude oil accounted for just 1.4 percent of the commodities carried by rail. Although oil makes up a small percentage of rail freight, this proportion is increasing rapidly.

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CRS — Iran Sanctions (August 19, 2014)

August 28, 2014 Comments off

Iran Sanctions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Strict sanctions on Iran’s key energy and financial sectors harmed Iran’s economy. The economic pressure—coupled with the related June 14, 2013, election of the relatively moderate Hassan Rouhani as Iran’s president—contributed to Iran’s accepting a November 24, 2013, six-month interim agreement (“Joint Plan of Action,” JPA) that halts expansion of its nuclear program in exchange for modest sanctions relief. On July 18, 2014, the interim agreement was extended until November 24, 2014.

Automotive Value Creators Report 2014: A Comeback in the Making

August 28, 2014 Comments off

Automotive Value Creators Report 2014: A Comeback in the Making
Source: Boston Consulting Group

A Comeback in the Making is the first in a series of annual reports from The Boston Consulting Group on value creation in the automotive industry. The report analyzes the industry’s two largest sectors, original-equipment manufacturers (OEMs) and makers of automotive components that are sold either to OEMs or to end users in the aftermarket.

These two businesses are very different, with distinct dynamics, financial characteristics, typical growth rates, capital requirements, and profit margins. Nevertheless, the sectors are inextricably linked and often have in common the same challenges; a pressing one for both sectors has been finding their footing in a global economy that was rocked to its foundation in 2008. Our analysis of total shareholder return (TSR) over the past three, five, and ten years suggests that the long-awaited recovery for both OEMs and component makers is finally starting to gain traction—across countries and regions and in all subsectors.

In fact, few economic sectors have mounted a more impressive comeback from the ravages of the financial crisis than those in the automotive industry. Both OEMs and component makers delivered five-year median annual returns that were well in excess of the median return for the 26 industries tracked by BCG. OEMs produced a median annual TSR of 29 percent from 2009 through 2013, while component makers posted a median annual TSR of 33 percent. The median annual return for all industries was 21 percent. The automotive industry’s recent performance represents a striking recovery from the depths of the 2008 financial crisis, when the big three U.S. automakers alone posted nearly $75 billion in losses and unit sales plunged worldwide.

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USPS OIG — eCommerce Customer Registration

August 28, 2014 Comments off

eCommerce Customer Registration (PDF)
Source: U.S. Department of Health and Human Services, Office of Inspector General

Background
The U.S. Postal Service’s Customer Registration application allows customers to create accounts through USPS.com to purchase products and services through over 40 eCommerce applications such as Every Door Direct Mail, Premium Forwarding Service, Click-N-Ship, and the Postal Store. Customers must provide personally identifiable information to create an account. There were over 24 million Customer Registration users as of June 2014 and revenue totaled about $1.2 billion in fiscal year (FY) 2013.

Our objective was to determine the effectiveness of controls used to safeguard the eCommerce Customer Registration process and reduce online credit card fraud.

What the OIG Found
Controls used to safeguard the eCommerce Customer Registration process and reduce online credit card fraud need improvement. Management has not established a threshold for fraud-related chargebacks (transactions rejected by credit card companies) for the four eCommerce applications in our review. As a result, management cannot objectively measure when to increase oversight and controls to reduce fraud.

Of the four applications, Click-N-Ship’s credit card fraud-related loss of $4.6 million was above the industry’s recommended threshold for acceptable levels of credit card fraud in FY 2013. In addition, management did not always ensure all credit card company chargebacks were validated.

Further, seven of the eight Customer Registration controls we tested worked as management intended. However, we identified one vulnerability that could permit a cyber criminal to impersonate a valid user and obtain postage using stolen credit card data. Finally, we did not identify any critical or high-risk vulnerabilities when conducting over 3,000 additional tests of the USPS.com login page.

What the OIG Recommended
We recommended management establish a threshold for credit card fraud and develop a policy defining chargeback roles and responsibilities. We also recommended management maintain chargeback research results from all eCommerce managers and configure eCommerce applications to prevent the noted security vulnerability.

EU — Organic production and labelling of organic products

August 27, 2014 Comments off

Organic production and labelling of organic products
Source: European Parliamentary Research Service

This note seeks to provide an initial analysis of the strengths and weaknesses of the European Commission’s Impact Assessment (IA) accompanying the above proposal which was adopted on 24 March 2014.

The general problem identified is that the overall objective of the current EU political and legislative framework to ensure the sustainable development of organic production, is not being met. Over the last ten years, the organic market has been characterised by dynamic development driven by strong growth in demand. The global market for organic food expanded fourfold between 1999 and 2011, yet the area under organic production in the EU only doubled in the decade 2000-2010. According to the IA, neither internal supply, nor the legislative framework, has kept up with this market expansion, resulting in lost opportunities for EU producers. Moreover, the IA considers that the continued growth of the organic market might itself be at threat from possible erosion of consumer confidence, due to the watering down of some EU organic production rules, with excessive use of exceptions, and cases of fraud in the control system and the import regime. In addition, the development of private schemes has led to confusion, with a multiplication of logos competing with the EU organic logo. The entire regulatory framework is extremely complex and difficult to understand for operators, producers, consumers and public authorities, and will become more so with the foreseen implementation of a compliance regime for control bodies in non-recognised third countries from 2014. There is significant administrative burden linked notably to the management of the exceptions by national administrations and to the control of business operators.

CRS — U.S.-Vietnam Nuclear Cooperation Agreement: Issues for Congress (August 8, 2014)

August 26, 2014 Comments off

U.S.-Vietnam Nuclear Cooperation Agreement: Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

U.S.-Vietnamese cooperation on nuclear energy and nonproliferation has grown in recent years along with closer bilateral economic, military, and diplomatic ties. In 2010, the two countries signed a Memorandum of Understanding that Obama Administration officials said would be a “stepping stone” to a bilateral nuclear cooperation agreement. This agreement was signed by the two countries on May 6, 2014, and transmitted to Congress for review on May 8. Since Congress adjourned for August recess under a joint resolution, the review period was paused. If Congress returns from adjournment as planned on September 8, the estimated congressional review period for this agreement will be completed on September 10, 2014.

Under the agreement, the United States could license the export of nuclear reactor and research information, material, and equipment to Vietnam. The agreement does not allow for the transfer of restricted data or sensitive nuclear technology, and contains required nonproliferation provisions. Under Section 123 of the Atomic Energy Act of 1954 (as amended), this agreement is subject to congressional review. The nuclear cooperation agreement is expected to comply with all the terms of the Atomic Energy Act as amended and therefore will be a “non-exempt” agreement. This means that it may enter into force upon the 90th day of continuous session after its submittal to Congress (a period of 30 plus 60 days of review) unless Congress enacts a Joint Resolution disapproving agreement, or approving the agreement at an earlier date. Senate Foreign Relations Committee Chairman Robert Menendez introduced a resolution that would approve the agreement (S.J.Res. 36) on May 22. This bill was passed by the Senate on July 31, 2014.

Vietnam would be the first country in Southeast Asia to operate a nuclear power plant. Vietnam has announced a nuclear energy plan that envisions installing several nuclear plants, capable of producing up to 14,800 megawatts of electric power (MWe), by 2030. Nuclear power is projected to provide 20%-30% of the country’s electricity by 2050. Significant work remains, however, to develop Vietnam’s nuclear energy infrastructure and regulatory framework. Since Vietnam has other commercial partners in the nuclear energy field, a lack of agreement with the United States would not be likely to have a significant impact on its nuclear energy plans.

Country Analysis Brief: Egypt

August 26, 2014 Comments off

Country Analysis Brief: Egypt
Source: Energy Information Administration

Egypt is the largest oil producer in Africa outside of the Organization of the Petroleum Exporting Countries (OPEC), and the second-largest natural gas producer on the continent, behind Algeria. Egypt plays a vital role in international energy markets through the operation of the Suez Canal and Suez-Mediterranean (SUMED) Pipeline.

The Suez Canal is an important transit route for oil and liquefied natural gas (LNG) shipments traveling northbound from the Persian Gulf to Europe and North America and southbound shipments from North Africa and countries along the Mediterranean Sea to Asia. The SUMED Pipeline is the only alternative route nearby to transport crude oil from the Red Sea to the Mediterranean Sea if ships were unable to navigate through the Suez Canal. Fees collected from the operation of these two transit points are significant sources of revenue for the Egyptian government.

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