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.
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."
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.
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
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.
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.
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
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.
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
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.
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.
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.
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].
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
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
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.
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."
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.
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
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].
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.
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.
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.
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.
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.
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
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
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
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.
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
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
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 globalwarminghoax 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
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
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.
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.
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.
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.
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.
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.