Petroleum Sub-Topics

Oil sands, oil shale, and other unconventional petroleum sources

Our Self-Created Energy Problem.  Canada, rarely thought of as an oil-rich nation, is in fact awash in crude.  Indeed, it is America's primary source of imported oil.  The province of Alberta alone holds 173 billion barrels of crude.  Some government analysts say that's enough to supply U.S. petroleum needs for 24 years.  This Canadian crude doesn't gush from the ground.  The tarlike oil is mixed with sand and has to be extracted using heat.  The process emits more carbon dioxide that conventional drilling.  Environmentalists, who've yet to see any oil they like, consider it dirty oil.

It's Domestic Energy, Stupid!  We need to develop all of our domestic energy resources, none to the exclusion of any other source — nuclear, clean coal, oil, natural gas, wind, solar, heck, maybe even switch grass.  And while it is true that we can't get all of our energy needs from domestic sources, it doesn't mean we shouldn't get any of it here.  We've got a lot — in ANWR, in the Outer Continental Shelf, and in the oil shale out West.  How about subsidizing shale oil extraction with the billions we currently subsidize ethanol and other biofuels with?

The Energy Quagmire:  Extracting oil from shale rock only recently has become economically feasible.  It costs about $70 per barrel to extract and make the oil usable.  When oil was $18 a barrel that would have been crazy.  But at $138 a barrel, it's a bargain.  And American companies can make money by supplying our nation's need, and lowering costs for all of us in the process.

Harry Reid Sneaks in Oil Shale Ban.  Leave it to Senator Majority Leader Harry Reid to crash the Energy Freedom party.  Not only is he crashing the party, he's doing so through the side door where he thinks no one can see him.  Just when it appeared that we could celebrate Congress lifting the ban on oil shale, Senator Reid "has decided to sneak an extension of the oil shale ban through as Congress fights over the financial bailout."

Despite 800 billion barrel potential, oil shale a hard sell.  Democrats have barred the Bureau of Land Management from leasing any federal land for commercial-scale oil shale projects.  And whether a nation now focused on boosting use of renewables and lowering dependence on fossil fuels will give oil shale another look remains an open question.

Oil shale to the rescue.  [Scroll down]  Most of the U.S. share, [Paul] Roberts also writes, can be found in the Green River Formation, which stretches through Colorado, Utah and Wyoming, and which has recoverable oil that is three times — yes, three times — the proven reserves of Saudi Arabia.  Given that the oil shale is so close at hand, it's no surprise that researchers at the school have been studying it for decades, or that there is now intense interest in the subject at the Colorado Energy Research Institute located at the school.

Developing oil shale is the best choice.  Democrats control Congress, so Americans ought to be asking about their plan to lower gas prices.  Let's hope their plan doesn't rest on solar, wind and geothermal, because planes, trains and automobiles don't run on electricity.  They run on oil — mostly foreign oil — 97 percent of the time.  Let's also hope the Democrats' plan doesn't rest on ethanol to break our dependence on foreign oil, because it can't.

Crude Mistake:  Congress [has shown] once again how clueless it is when it comes to energy policy.  Underscoring its failure to grasp the nature of our current problems, the Senate Appropriations Committee on Friday [5/16/2008] refused to end its moratorium on oil shale development in Colorado. … Congress could reduce much of our oil shortfall by drilling for more on our own territory.  This would lower prices and increase security.  Yet, Congress seems dead set on doing the opposite.

4.3 billion barrels of oil likely in Bakken.  The government estimates up to 4.3 billion barrels of oil can be recovered from the Bakken shake formation in North Dakota and Montana, using current technology.  The U.S. Geological Survey calls it the largest continuous oil accumulation it has ever assessed.

Huge Oil Reservoir May Lie Under Northern Plains.  The government estimates up to 4.3 billion barrels of oil can be recovered from the Bakken shale formation in North Dakota and Montana, using current technology.  The U.S. Geological Survey calls it the largest continuous oil accumulation it has ever assessed.  An assessment by USGS in 1999 found the Alaska National Wildlife Refuge had 10.3 billion barrels of recoverable oil, said Brenda Pierce, a geologist for the agency.

Norway makes $2.2B investment in Canada's oilsands.  A firm owned by the Norwegian government has paid $2.2 billion to acquire Calgary-based North American Oil Sands Corp.  Statoil ASA is offering $20 a share for the private company, for a total price of $2.2 billion.

Environmental toll from oilsands is a "myth":  Stelmach to U.S..  Alberta Premier Ed Stelmach is asking business leaders in the United States not to buy the notion that oilsands production comes at too high an environmental cost.  Stelmach told an energy forum in Washington, D.C., today that although this "myth" has gained some traction in the U.S., attempts to slow down oilsands development "don't make sense."

Ethanol isn't worth getting pumped up about, but oil shale might be.  Winter is barely behind us, and gasoline prices are already rising.  Worse, experts predict more price increases are right down the road.  This poses two problems.  First, higher energy prices mean families have less to spend on other necessities.  Second, most of the money we spend for fuel ends up overseas, often supporting countries that don't wish us well.  To solve the first problem, we need to solve the second.

Klein wants oilsands processed in Alberta.  In the face of criticism that Alberta is losing money by allowing raw product from the oilsands to be shipped to the United States for upgrading, Premier Ralph Klein says he's asked his energy minister to review the issue. …Klein said he's specifically concerned about a plan by oil giant EnCana Corp. to ship bitumen south of the border, as well as a proposed pipeline that would take bitumen from Fort McMurray to British Columbia for shipment to China.

Chavez gives boost to oil sands.  The re-election of Hugo Chavez as President of Venezuela for a second term this week means the world should get ready for another six years of sabre-rattling aimed at keeping oil prices high.

Huge oilsands potential still untapped, says energy official.  Oilsands projects in northern Alberta may be booming but the province's energy regulator said Thursday [6/15/2006] that only the surface has been scratched so far.  The Alberta Energy and Utilities Board said less than three percent of the province's established oilsands reserves have been developed in 40 years of work.  In its annual report on Alberta's reserves, presented at the Calgary Chamber of Commerce, the board says there are still an estimated 1.6 billion barrels of conventional oil in the ground and 174 billion in the oilsands.

Oilsands to the rescue.  Yesterday [4/12/2006], the U.S. Department of Energy reported a big drop in gasoline inventories.  And it's still only April.  Blame steady world oil demand growth, only modest increases in spare oil production and more risks of political instability.  Combined, they are "expected to keep crude oil prices high through 2006."

Oil Sand Becoming More Economical.  It was a tenet of the late, great economist Julian Simon that we'll never run out of any commodity.  That's because before we do, the increasing scarcity of that resource will drive up the price and force us to adopt alternatives.  For example, as firewood grew scarce, people turned to coal, and as the whale oil supply dwindled, 'twas petroleum that saved the whales.

Fill 'er Up with Oils Sands!  Now we're told we're running out of petroleum.  The "proof" is the high prices at the pump.  In fact, oil cost about 50% more per barrel in 1979-80 than now when adjusted for inflation.  Yet it's also true that industrializing nations like China and India are making serious demands on the world's ability to provide oil and are driving prices up.  So is this the beginning of the end?  Nope.  The Julian Simon effect is already occurring.

This is an original compilation, Copyright © 2016 by Andrew K. Dart

Oil is out there, but in difficult places

Brazil Oil Trapped by 500-Degree Heat, Salt Barrier.  Tapping what may be the biggest oil finds in the Western Hemisphere in three decades will require equipment that can withstand 18,000 pounds per square inch of pressure, enough to crush a pickup truck, pipes that can carry oil at temperatures above 500°F. and drill bits that can penetrate layers of salt more than one mile thick.

Brazil Oil Finds May End Reliance on Middle East, Zeihan Says.  Brazil's discoveries of what may be two of the world's three biggest oil finds in the past 30 years could help end the Western Hemisphere's reliance on Middle East crude, Strategic Forecasting Inc. said.

The Shale Game:  Yes, oil companies make money.  But they spend more than they make on finding new sources of oil.  A new Ernst & Young study shows the five major oil companies had $765 billion of new investment from 1992 to 2006 compared with net income of $662 billion.  Over the same stretch, the industry — which includes 57 of the largest U.S. oil and natural gas companies — had new investments of $1.25 trillion compared with a net income of $900 billion and a cash flow of $1.77 trillion.  This is an industry that has redefined innovation, reinvesting profits to find innovative ways to recover oil and gas wherever they find it.

Japan's Arctic methane hydrate haul raises environment fears.  For an unprecedented six straight days, a state-backed drilling company has managed to extract industrial quantities of natural gas from underground sources of methane hydrate — a form of gas-rich ice once thought to exist only on the moons of Saturn.  In fact, the seabeds around the Japanese coast turn out to conceal massive deposits of the elusive sorbet-like compound in their depths, and a country that has long assumed it had virtually no fossil fuels could now be sitting on energy reserves containing 100 years' fuel.

Brazil Oil Find May Be World's 3rd Largest.  A deep-water exploration area off Brazil's coast could contain as much as 33 billion barrels of oil, the head of Brazil's National Petroleum Agency said Monday [4/14/2008].  That would make it the world's third-largest known oil reserve.  Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed.

Oil in or near the Arctic Circle

U.S. ship heads for Arctic to define territory.  A U.S. Coast Guard cutter will embark on an Arctic voyage this week to determine the extent of the continental shelf north of Alaska and map the ocean floor, data that could be used for oil and natural gas exploration.

Russia threatens to seize swathe of Arctic.  President Dmitry Medvedev said that Russia should unilaterally claim part of the Arctic, stepping up the race for the disputed energy-rich region.  "We must finalise and adopt a federal law on the southern border of Russia's Arctic zone," Mr Medvedev told a meeting of the Security Council, in remarks carried by Interfax news agency.

Hunting for oil beneath the ice:  The combination of falling reserves and $100-plus oil is sparking a frenzy of oil and gas activity in Alaska the likes of which hasn't been seen since the state's initial oil boom more than three decades ago.  ConocoPhillips, Alaska's biggest producer and America's third-largest oil company, is spending huge sums to re-explore old stomping grounds like the North Slope.  The company is also investing in heavy-oil technology and early preparation for a proposed $30 billion natural gas pipeline.

U.S. pushes to expand Arctic icebreaker fleet.  A growing array of American military leaders, Arctic experts and lawmakers say the United States is losing its ability to patrol and safeguard Arctic waters even as climate change and high energy prices have triggered a burst of shipping and oil and gas exploration in the thawing region.

Bias alert:
Who says the region is "thawing?"  Looks normal to me.  (See charts on this page.)

Kremlin lays claim to huge chunk of oil-rich North Pole.  Under international law, no country owns the North Pole.  Instead, the five surrounding Arctic states, Russia, the US, Canada, Norway and Denmark (via Greenland), are limited to a 200-mile economic zone around their coasts.

Russia gears up to develop vast oil reserves.  President Dmitry Medvedev signed a law today [7/18/2008] enabling the Kremlin to handpick companies to develop the vast oil reserves believed to be located in the Russian Arctic.

Arctic May Hold 90 Billion Barrels of Oil, U.S. Says.  The Arctic may hold 90 billion barrels of oil, more than all the known reserves of Nigeria, Kazakhstan and Mexico combined, and enough to supply U.S. demand for 12 years, the U.S. Geological Survey said.  One-third of the undiscovered oil is in Alaskan territory, the agency found in a study released today [7/23/2008].

Oil Survey Says Arctic Has Riches.  The Arctic may contain as much as a fifth of the world's yet to-be-discovered oil and natural gas reserves, the United States Geological Survey said Wednesday [7/23/2008] as it unveiled the largest-ever survey of petroleum resources north of the Arctic Circle.

More oil and gas found in North Sea.  Norwegian exploration activity in the North Sea has yielded a new oil well and the discovery of what's being called a "large" pocket of gas.  StatoilHydro logged its fourth oil discovery of the year, just southwest of the Grane field in the Norwegian sector of the North Sea.  It's estimated to yield as many of [sic] 30 million barrels of crude.

Greenland opening Arctic sea to oil wells.  Several of the world's largest oil companies hope to tap into possible offshore oil and gas reserves as Greenland opened a new round of concessions for exploration licenses in the fragile Arctic region.

Riches in the Arctic:  the new oil race.  The future of the Arctic will be less white wilderness, more black gold, a new report on oil reserves in the High North has signalled this week.  The first-comprehensive assessment of oil and gas resources north of the Arctic Circle, carried out by American geologists, reveals that underneath the ice, the region may contain as much as a fifth of the world's undiscovered yet recoverable oil and natural gas reserves.

Map shows front lines of Arctic carve-up.  A new map of the Arctic outlines what will undoubtedly be the decade's biggest geographical carve-up between nations.  "The map is the most precise depiction yet of the limits and the future dividing lines that could be drawn across the Arctic region," says Martin Pratt, director of research at the University of Durham's International Boundaries Research Unit.

Positive and negative effects of oil price fluctuations


The End of Carbon Fuels?  [S]hould the price of hydrocarbons collapse, the area from Morocco to Iran will be the most affected.  Yes, some economies, such as those of Tunisia, Turkey, Israel, Bahrain, and Dubai, do not depend heavily on fossil fuels.  Yes, some leaders, notably Saudi Crown Prince Mohammad bin Salman, realize that the rentier model cannot be sustained and seek to diversify.  And yes, the demise of oil and gas will bring some good news:  More water desalination plants, less Islamism (petrodollars basically fund it), and Israel's enemies weakened.  But the negative implications of a gas and oil price collapse will be much greater.  Foreign direct investment will shrivel.  The majority of Middle Eastern economies will convulse.  Regimes such as the Islamic Republic of Iran or the People's Democratic Republic of Algeria will not survive, leading to more anarchy (already rampant in Afghanistan, Egypt, Iraq, Lebanon, Libya, Somalia, Syria, the West Bank, and Yemen).

Texas Economy Booming Under Oil Rush.  A segment on "NBC Nightly News" showed how the price of oil — a little over $137 a barrel — is reviving the economy in parts of Texas that have long been dormant.  "Ask people in Texas about the economy and they're likely to gush," CNBC senior correspondent Scott Cohn said on "Nightly News."  "Matt Levisor is making big money refurbishing these west Texas oil wells — abandoned back when oil was cheap."

North Dakota's real-life Jed Clampett:  It's not uncommon to hear stories of 20-year-olds with no job experience getting hired to work in the oil fields with starting salaries of $70,000 a year.  Gary Dazell makes more than $100,000 a year hauling water to and from the oil fields.  "The oil field has blessed us," he says.  Then, there are stories like [Herb] Geving's where locals suddenly come into a fortune for owning the mineral rights.  Geving says he's amassed so much money that 70 relatives will get sizable sums when he dies.

Drill Like Texas.  The invisible hand of the marketplace is alive and well in Texas.  Over the past 12 months Texas has created 245,000 jobs.  That accounts for more than half of the jobs created in America during that time.  Not coincidentally, Texas has the second lowest tax burden of the 50 states.  Even conservative estimates have projected a $10 billion surplus for the next biennium.  Texas also leads the nation in energy production — 30% of the natural gas and 20% of oil produced in America comes from Texas.

Oil industry battles for skilled workers.  As oil and gas prices continue to break records, the U.S. energy industry is flush with cash, helping Texas add 245,000 jobs in the past 12 months while job growth nationally was flat.  But what's eating the industry is a shortage of skilled workers so severe it's threatening to slow projects and force companies to turn away work.

Pension Funds Boosted By Oil.  Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies and Middle Eastern producers.  They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement.

As Oil Rises in Markets, Rigs Rise in Mississippi.  The high price of oil, hovering around $70 a barrel, has brought a nearly dormant Mississippi petroleum industry roaring to life.  Wells abandoned long ago by the major oil companies are being reopened by independent operators.  Requests for new drilling permits have spiked.  Trainees for oil-field work can make nearly $14 an hour.  Companies wait 12 months to rent the kind of field equipment that was once sold for scrap.

Ohio Considers New Wells, Looks to Alaska Example.  Ohio Senate Bill 193, would allow oil and gas drilling and commercial logging in state-owned parks, wilderness areas, and game lands.  Supporters say the drilling would increase natural gas production in the state, increase local supply, and lead to lower prices for local consumers.  It also would bring royalties to the state.

Abandoned oil wells uncapped.  Oil wells in California that were capped are now being opened because rising petroleum demand and new technology are permitting oil companies to profitably extract oil in the Golden State.

Gas Rush Is On, and Louisianians Cash In.  A no-holds-barred, all-American gold rush for natural gas is under way in this forgotten corner of the South, and De Soto Parish, with its fat check from a large energy company this month, is only the latest and largest beneficiary.

West Texans jaded instead of giddy during this oil boom.  The people of Kermit and other Permian Basin towns have learned that petroleum-based prosperity is too fragile to squander in wild exuberance.  They're paying off debts and investing in public institutions that will endure beyond the boom-and-bust cycles of the oil business.

Global political hypocrisy:  Norway, which now has the highest, or closest to the highest, per capita income on the planet due to its immense oil reserves and relatively small population, has decided to beat up on a number of poorer countries that do not have the luck to sit on a vast pool of oil.

Gold plummets amid stronger dollar, oil decline.  Gold, which scorched into the record books earlier this year, has suddenly gone cold.  Prices for the precious metal — which touched $1,000 an ounce for the first time in March — have plunged in recent weeks, and on Friday tumbled below $800 for the first time since late last year.

Chavez Runs Short of Cash for Takeovers as Oil Prices Slump.  Venezuela is holding up payments to contractors, oil services companies and targets of President Hugo Chavez's nationalization drive, indicating the country is running short of cash after petroleum prices collapsed.


Halliburton Cuts Another 5,000 Workers to Cope with Oil Downturn.  The shrinking of the oil industry picked up speed this week after Halliburton Co. announced it's cutting another 5,000 workers, or 8 percent of its remaining global workforce, to survive a lengthening crude market downturn.  The world's second-largest oilfield services provider said last month it cut nearly 4,000 jobs in the final three months of 2015 and indicated more could come this quarter. With the latest layoffs, the Houston-based provider of drilling and hydraulic fracturing services will have let go nearly 29,000 workers, or more than a quarter of its headcount since staffing reached its peak in late 2014.  Emily Mir, a spokeswoman, confirmed the additional cuts Thursday [2/25/2016] in an e-mailed statement.

Cheap oil's downside.  Oil prices have fallen dramatically to the mid-$30s on the New York Mercantile Exchange from more than $105 per barrel in 2014.  Such extraordinarily low prices are affecting global stock markets, big oil exporters and consumers worldwide. [...] When traders believe that oil prices will rise, they buy futures in hopes of selling them later for a profit.  Their actions increase the price of oil and, eventually, the price of derivatives, such as gasoline and heating oil.  That's not happening now because traders are pessimistic.

As Oil Money Melts, Alaska Mulls First Income Tax in 35 Years.  Oil money no longer pays the bills here.  The governor, facing a profound fiscal crisis, has proposed the imposition of a personal income tax for the first time in 35 years.  State lawmakers, who recently moved into a palatial new office building here, where they work when not toiling in the far-off Capitol in Juneau, are now seeking less costly digs.  And a state budget that was a point of Alaskan pride — and envy from around the nation — lies in tatters as revenue that flowed from selling crude oil from Prudhoe Bay over the past four decades has been swept away.

Two companies announce 245 layoffs in the Houston area.  The crude bust has claimed another 245 jobs in the Houston area, with two companies announcing plans to curtail operations amid waning demand for offshore drilling and oil and gas equipment.  Sulzer Pumps Inc. will permanently shutter its Brookshire plant — where it manufactures and tests vertical pumps used in power, water and oil and gas industries — and consolidate operations at a plant in Portland, Oregon, the company told the Texas Workforce Commission last week.

Chevron cutting some 7,000 workers as oil prices slide.  Chevron Corp. announced Friday [10/30/2015] it will cut up to 10 percent of its workforce, or about 7,000 workers, as oil prices continue to slump.

Royal Dutch Shell will cut jobs to cope with long period of cheap oil.  Royal Dutch Shell announced deep cuts to jobs and investment on Thursday [7/30/2015] as the global energy giant prepares for a prolonged period of low oil prices.

America's Accelerating Downward Spiral.  In the past four decades in the U.S., every substantial increase in the real price of oil (meaning in excess of general inflation) has been followed within a couple of years by a sharp rise in unemployment.

Stocks fall sharply on surge in oil, jobs data.  Wall Street tumbled Friday [6/6/2008], taking the Dow Jones industrials down nearly 400 points, on a pair of alarming economic developments: oil prices that shot up by more than $11 a barrel and approached $140 for the first time, and the biggest gain in the government's unemployment reading in more than 20 years.

Stimulus Unlikely to Counter Rise in Oil Prices.  Just at the moment the U.S. economy could use a boost, the recent surge in oil prices is having the opposite effect. … The more-than-$30-a-barrel increase in oil prices over the past five months is like a $150 billion tax increase, said William D. Nordhaus, a Yale University economics professor.  By paying more for oil, Americans have less left to save or spend.  "It is clearly contractionary," Nordhaus said.

Forget $100 oil.  $80 oil is a problem.  Are cash-strapped American consumers on for another date with energy price misery?  The U.S. economy remains weak and one in six Americans can't find enough work.  Yet oil prices have risen steadily this year.  A barrel of crude costs $79 and change, more than double its price at the end of 2008.

America's Accelerating Downward Spiral.  In the past four decades in the U.S., every substantial increase in the real price of oil (meaning in excess of general inflation) has been followed within a couple of years by a sharp rise in unemployment.  So with oil now surging past $100 a barrel, what does that suggest about unemployment over the next two years?

Neither / Both

US crude rises 20 cents, settling at $74.14, after topping $75 for first time since 2014.  Oil prices steadied on Tuesday afternoon [7/3/2018], following a volatile session that saw U.S. crude top $75 a barrel for the first time since November 2014 before falling sharply and suddenly in mid-morning trading.  The American benchmark broke through the threshold as the market grew increasingly concerned about a shortage of oil amid supply disruptions in Libya and Canada and as tough U.S. sanctions on Iran loom.

First oil in two years leaves Libya's Ras Lanouf port.  An oil tanker left the Libyan port of Ras Lanouf for Italy on Tuesday [9/20/2016], an official said, the first shipment since fighting erupted over control of the "oil crescent" two years ago.  Oil is war-ravaged Libya's key asset, and rival administrations have been vying for control of its oil wealth and territory since the 2011 uprising that overthrew Muammar Gaddafi and plunged the country into chaos.

How Do Crude Oil Prices Affect Oil Stocks?  Crude oil prices generally move on the market fundamentals of supply and demand.  However, government policies and the financial markets also play a role.  When fundamentals are in charge, crude prices will fluctuate based on the market's need, or lack thereof, for more petroleum.  If there's a shortage, prices will spike to incentivize producers to increase investments to boost their output.  On the other hand, when there is a glut of oil on the market, crude prices will plunge to disincentivize investments in production.

Cheap oil, good for consumers, is slamming stocks. Why?  The price of crude is down 28 percent this year already, which in turn has dragged down energy company shares in the Standard & Poor's 500 index by 13 percent, which has helped pull the overall index down 9 percent.

The End of Saudi Arabia?  The present worldwide depression — let's call it what it is, not a recession — is partly the direct result of Saudi manipulations.  Fracking, particularly in the United States, was on the verge of making the USA independent of oil imports.  Europe, Latin America, Oceania, and China were all starting to frack.  As technology got cheaper, Saudi Arabia knew that, left unchecked, one day the world would break free of Muslim oil extortion, and their cash cow would be kaput.  The KSA, which produces little else, would be back to selling sand, and the Quranically approved as healthful camel urine — but since dromedaries are not unique to the peninsula, even that market would be lost to them.  The Saudis have been at this oil price manipulation game for over 40 years.

Drivers, shippers delight in low prices, but oil industry wrestling with layoffs, losses.  As drivers, shippers and airlines continue to enjoy lower fuel prices, the oil industry is responding to much lower profits with sharp cuts in spending and employment that are hurting economic growth.

More Oil is Put Into Storage, Waiting for Prices to Rise.  Oil producers, refiners and investors have put a record amount of crude oil into storage at a key delivery point as they try to profit from an unusual form of "super contango" that indicates the market expects prices to rise sharply by summer.  Inventories in Cushing, Okla., the delivery point for futures traded on the New York Mercantile Exchange, have jumped more than 40% in the month ended Jan. 2 to the highest level since at least April, 2004, when the government started collecting Cushing data.

All that glistens is gold at $1000 an ounce.  Gold surged to a record high overnight [10/27/2008], nearing $1000 an ounce as investors were spurred by a plummeting dollar, oil's initial rally and speculation there will be further US rate cuts. … Silver also rallied to its loftiest level since November 1980, palladium jumped to a 6½ year high and platinum advanced to trade near last week's record highs before paring gains.

Oil boom creates millionaires and animosity in North Dakota.  From the cab of his combine 10 feet off the ground, Doug Kinnoin sees acres of barley scrawnier than last year's bumper crop but good enough to fetch top dollar as malt for beer instead of cattle feed.  What he can't see, as the amber stalks give way to the combine's rollers, is the black gold 2 miles below.

A Funny Sort of Depression.  The sudden crash in energy prices may be hurting Iran, the Gulf monarchies, Russia and Venezuela.  Yet Americans, who import 60 percent of their transportation fuel, along with natural gas, have been given about a half-trillion-dollar annual reprieve.  The reduced price of energy could translate into more than $1,500 in annual savings for the average driver, and hundreds of dollars off the heating and cooling bills for the homeowner.

Number of active oil rigs drops by 44.  The number of rigs actively exploring for oil and natural gas in the United States dropped by 44 this week to 1,126, as weak energy demand continues to hamper oilfield activity.  Of the rigs running nationwide, 884 were exploring for natural gas and 228 for oil, Houston-based Baker Hughes Inc. reported Friday [3/13/2009].  A total of 14 were listed as miscellaneous.

Supply and demand

Mexico oil exports plunge 50.2 pct. in November.  Mexico's oil exports fell 50.2 percent from a year earlier in November, a month in which the country's trade deficit totaled $1.57 billion, the National Institute of Statistics and Geography, or INEGI, said.  Total exports amounted to $31.02 billion last month, down 4.1 percent from November 2014, the INEGI said in a statement Thursday [12/31/2015].  Oil exports plunged 50.2 percent to $1.57 billion, while non-petroleum exports rose 0.9 percent to $29.46 billion.

Speculators A Convenient Whipping Boy For Political Acts That Drive Up Oil Prices.  Recent price hikes have a geopolitical cause.  A good chunk of Iran's hefty supply has been taken off the market, tightening a delicate supply-demand balance.  Refiners worry about a wider conflagration in the Mideast.  It's their job to secure oil and "crack" it into usable products, such as gasoline, heating oil and jet fuel.  If you were them, wouldn't you buy extra oil, just in case?  Well, that's speculation. And if the price of oil goes up today, and you rush to the gas station to beat the higher price tomorrow — guess what?  You too are a speculator.

Americans Drive Less, Creating a Problem.  The oil industry and oil-producing nations have an acute problem, because the combination of conservation and the worst world-wide economic slump in decades has once again made a mockery of recent projections that oil would remain expensive and scarce forever.  As of late last week, oil prices had fallen below $50 a barrel — compared with more than $140 a barrel this summer.

Natural gas glut weighs on prices.  Natural gas prices have fallen dramatically this year much like crude prices, but shrinking demand is only one culprit.  The other is a gas glut from a boom in U.S. production.  "The industry is suffering from its own success in some respects," said Karr Ingham, head of Ingham Economic Reporting in Amarillo.  "We've added a lot of natural gas production in Texas and elsewhere just because of high prices."

We Can Lower Oil Prices Now.  Unlike perishable agricultural products, oil can be stored in the ground.  So when will an owner of oil reduce production or increase inventories instead of selling his oil and converting the proceeds into investible cash?  A simplified answer is that he will keep the oil in the ground if its price is expected to rise faster than the interest rate that could be earned on the money obtained from selling the oil.  The actual price of oil may rise faster or slower than is expected, but the decision to sell (or hold) the oil depends on the expected price rise.

Energy?  Here's the drill.  The law of supply and demand is the oldest and wisest axiom in free-market economics.  Exceed the demand for something by overproduction and the price will fall.  Sharply reduce its supply in the face of very robust demand, and the price will go up.  Congress, well-meaning environmentalists, government regulators and assorted Malthusians seem to have forgotten this simple, fundamental rule, and the result is $120-a barrel-oil and $4-a-gallon gasoline.

Biggest drop in U.S. oil demand in 26 years.  U.S. oil demand during the first half of 2008 fell by an average 800,000 barrels per day (bpd) compared with the same period a year ago, the biggest volume decline in 26 years, the Energy Information Administration said on Tuesday [8/12/2008].

The new math of oil:  We're hard-wired to tremble when oil prices rocket, and the past few weeks have looked like another example of why.  Whenever stocks fell sharply, as they did several times, traders blamed the fast-rising price of oil.  But that chain of logic is misleading.  The bigger picture shows that the relation between oil and the economy is changing, and we'll have to rewire our brains to understand what's happening.  Watching oil prices rise and fall is no longer enough; the key now is understanding why they're moving.

Oil Price Defies Easy Calculation.  Is there a fair price for oil? It doesn't seem that way.  Over the past year, the price of crude oil has nearly doubled even though oil inventories are ample, there has been no disruption in supplies, and petroleum demand in the United States, the world's biggest consumer, has leveled off in recent weeks as the economy has slowed.

IEA sees oil supply crunch looming.  World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said on Monday.  In its Medium-Term Oil Market Report, the adviser to 26 industrialized countries said demand will rise by an average 2.2 percent a year between 2007 and 2012, up from a previous medium-term forecast of 2 percent.

Bush's Bogus Cure for Oil Addiction.  The notion that reducing oil imports will reduce our vulnerability is an illusion.  Even by the most optimistic predictions, we will be running much of our economy with oil for decades to come, and where that oil comes from is largely irrelevant.  Why?  Because oil trades in a world market, and when disruptions occur, the price rises everywhere.

It's called supply and demand.  We Americans pay far less for fuel than most folks around the world, especially when compared to European urbanites, some of whom pay more than $10 per gallon.  And even at $75 per barrel, oil is still $12 less than its inflation-adjusted record price in 1981.  But higher fuel prices do put the pinch on some family budgets, especially when a breadwinner has a long commute.

Helping America achieve energy independence.  Contrary to what you might hear on the evening news, oil companies don't set the price of oil, they "take" the price the market will bear.  As long as the growing global demand for more than 83 million barrels per day keeps upward pressure on a global supply of about the same 83 million barrels per day — the price of oil and therefore gasoline will continue to be high and volatile.

China's engine starts to sputter:  Revved up by years of supercharged foreign investment, China's economic engine is sputtering from lack of power this summer.  An acute energy shortage has idled the nation's factories three days a week, forced workers to take leaves and dimmed streetlights in the big cities.

China's thirst for oil grows despite surge in world prices.  In a few short years, China has grown into the world's Number 3 oil importer, depending on foreign crude to fuel its factories and cars and cool its shopping malls.  Even as world oil prices surge past $45 a barrel and South Korea and other Asian economies struggle to cope with the rising cost, China's consumption shows no sign of slowing.

China's S.P.R. Pumping Up Prices.  Although the U.S. has quit filling its strategic petroleum reserve, China continues to fill its new one, yet another reason why world oil prices have risen dramatically over the past few months.  Of course, quantifying that effect in terms of dollars per barrel is difficult, if not impossible.  That said, the cost of filling China's S.P.R. and the lack of transparency with regard to its S.P.R. program management are cause for concern.

Broader energy issues

Antiquated law adds billions to fuel costs.  An obscure 1920 law is costing Americans billions of dollars a year in higher fuel costs.  The Jones Act requires that cargo shipped from one US port to another be carried on a US-registered vessel, built, owned and crewed by Americans.  This protectionist law was designed to support a shipbuilding industry that no longer exists — but inertia and labor-union muscle keep it on the books.  The law mainly makes the news in time of crisis.  It delayed shipment of road salt to New Jersey during a shortage last winter — happily, without incident, as the weather moderated before the Garden State had to shut down its highways for lack of salt.

Obama's Blame Game Continues: Who's Behind Oil Price Rise?  With oil hitting $111 today, and gasoline topping $4 a gallon in many markets, economists are beginning to ratchet down their GDP forecasts, boding ill for continued job growth.  Meanwhile, and not coincidentally, the nation is souring on our elected officials, and on the president, whose approval ratings are sinking like a failed soufflé.  A staggering 70% of the nation thinks we're headed in the wrong direction.  What's Obama's solution?  Find someone to blame.  To show he's on top of our energy crisis, the president has ... created yet another commission!

What To Do About High Oil Prices:  Rising oil and gas prices are a concern to consumers, Congress, and the Obama Administration.  The impact of higher oil prices goes far beyond the gas pump and affects the U.S. economy, as a new Heritage Foundation analysis shows.  In addition to unrest in oil-producing countries and increased demand around the world, U.S. policies are contributing to higher fuel costs and a smaller domestic supply.

Natural gas glut could hit U.S.  As many as seven massive natural gas export terminals are expected to start up overseas this year, expanding worldwide capacity by 20 percent and flooding markets with new supplies of the key power plant and heating fuel.  Dozens of new tankers capable of carrying natural gas in a liquefied form are slated to hit the seas.

Natural Gas, Suddenly Abundant, Is Cheaper.  The decline in crude oil prices gets all the headlines, but the first globalized natural gas glut in history is driving an even more drastic collapse in the cost of gas that cooks food, heats homes and runs factories in the United States and many other countries.

Texas getting a floating oil port.  As politicians continue to debate how to reduce U.S. dependency on foreign oil, a Houston partnership is spending $2 billion to prepare for an energy future that inevitably will include oil imports.  The team announced today [8/18/2008] that it plans to build and operate an oil terminal 36 miles off the coast of Freeport.

Inanities of 'Energy Independence'.  It's amazing how ideas with no merit become popular merely because they sound good.  Most every politician and pundit says "energy independence" is a great idea.  Presidents have promised it for 35 years.  Wouldn't it be wonderful if we were self-sufficient, protected from high prices, supply disruptions, and political machinations?  The hitch is that even if America were energy independent, it would be protected from none of those things.

Foreign Oil is Still Cheap Oil.  [President] Bush never explains how buying oil from countries "that simply don't like us" hurts our economy.  The price for oil is the same for everybody on the world market. … We buy foreign oil because, even at today's prices, it is the least expensive way to power our automobiles.  How does switching to more expensive ethanol or battery power help our economy?  Bush never says.

Oil Now and Oil Tomorrow.  You cannot "conserve" energy by simply not using it or using less.  The ultimate "conservation" would be to stop mining coal and stop drilling for oil and natural gas.  The modern world runs on these sources of energy.  Cutting back on their use means less electricity, less fuel for automobiles, trucks, and planes.  The United States is a powerful economic machine because that machine runs on energy.

Bad News:  Scientists Make Cheap Gas From Coal.  If oil prices rise again, adoption of the new coal-to-liquid technology, reported this week in Science, could undercut adoption of electric vehicles or next-generation biofuels.  And that's bad news for the fight against climate change.

The Editor says...
That development is "bad news" only if the global warming hoax has any merit, which it does not.

The Facts on Halliburton:  Why do leftists demonize Halliburton?  What proof exists of their claims of corruption?  What exactly has Halliburton done to profit from American military casualties?  Indeed, have they profited from military casualties?  Is there a special relationship between the Bush administration and Halliburton so that the company receives contracts without observing the normal bidding process?  It is certainly true that during a two year period Halliburton's revenue from Defense Department contracts doubled.  However, that increase in revenue occurred from 1998 to 2000 - during the Clinton administration.

The Editor says...
Halliburton wins contracts for oil field work in the Middle East for the same reason that AT&T won the classified contract to operate the AUTOVON system.*  They have the specialized equipment and the trained, experienced people to do the job, and they can get started today, if necessary.  It is a waste of time and effort to shop around for small, minority-owned, or "disadvantaged" businesses when there are huge, urgent and highly specialized projects at hand.

Twelve Principles to Guide U.S. Energy Policy.  The federal government has placed too many restrictions on domestic oil and natural gas production.  Failure to make full use of these domestic energy resources exacerbates the security and cost problems caused by geopolitical events and makes America more vulnerable to supply disruptions and price increases.  All U.S. lands and waters should be made accessible for appropriate exploration and production, which could be done using technologies that are far safer and more efficient than those that were available in the past.

An Incurious Media or a Four-Leaf-Clover President.  [Scroll down]  Remember when we were supposedly in Iraq to steal oil?  We've certainly been there long enough to drain that nation dry.  Only one problem — we didn't do it.  Or maybe it was the oil company conspiracy to lower gas prices and fix the election.  CNN's Jack Cafferty was just one of many media voices to say "if you were a real cynic, you could also wonder if the oil companies might not be pulling the price of gas down to help the Republicans get re-elected in the midterm elections a couple of months away."  That conspiracy was also proven bogus when gas prices didn't plummet until after the 2008 elections.

Why do we import energy?  [Scroll down to page 5]  We import energy for two reasons.  First, laws ban commercial access to billions of barrels of oil, trillions of cubic feet of natural gas, and billions of tons of low-sulfur coal in the U.S.  These laws were passed supposedly to protect wilderness areas, but the actual intent and their effect have been to restrict access to domestic sources of energy.  The second reason we import oil (and increasingly natural gas) is economic:  When the cost of imported oil is low, it is plainly in the interests of U.S. businesses and consumers to buy it, just as buying other goods and services from other countries when they are inexpensive is a boon to American consumers. ... Genuine energy independence would require energy isolationism — the erection of barriers to free trade with other countries — which is known to slow economic growth, invite retaliation by trading partners, and raise prices.

Nigeria's crude reality.  [Scroll down]  In fact, more oil is spilled from the [Niger] delta's network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of an ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP's Deepwater Horizon rig in April.

Energy Independence:  Are You Serious?  Canadian oil sands are hardly the only asset the Chinese have been buying up.  Chinese companies have been acquiring energy rights in Africa, most recently signing a major refinery deal with Nigerians officials.  The deal may put China ahead of other countries in obtaining future oil and gas leases in Africa's largest energy producer.  China has signed energy deals with Venezuela, Iraq, and Australia as well.

'Energy Independence' is a Pipe Dream.  Americans have been using foreign oil for a long time, and we use a lot more of it now than we used to.  When Nixon was in the White House, the United States imported 6 million barrels of petroleum per day.  The daily average so far this year is 11.4 million barrels.  It would be even higher if the economy were stronger.

The Strategic Petroleum Reserve is for emergencies — not political disasters.  With the price of gas rising, Americans are feeling pain at the pump and President Obama is feeling the heat.  Three years of his failed energy policies have done nothing to give America energy security.  About the only quick fix the president has available is to tap the Strategic Petroleum Reserve.  That's what he did last June when he sold 30 million barrels of oil to address rising gas prices.  It is almost inevitable that Mr. Obama will try tapping the reserve again.  The only question is when he will do it.  Raiding our emergency reserves now would be nothing more than a campaign trick.

The reason it's called Texas Tea.  24/7 Wall St. has identified the 10 states with the most oil reserves, or the estimated amount of oil in the state, and examined the effects that the industry has on their economies.  In the states with the greatest amounts of oil reserves, those effects can be tremendous.  The oil and natural gas industry supports nearly 25 percent of the economies of Texas and Wyoming, much more than the 6.8 percent it supports on a national scale.  Every state on this list exceeds the national number by a significant amount.

Editor's note:
In an attempt to combat high gas prices, you may be tempted to purchase a hybrid vehicle.  But before you do, you should look at the information on this page.

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Updated July 9, 2018.

©2018 by Andrew K. Dart