Category Archives: big oil

Oil Dives Below 63$$ A Barrel – We are all going to die!

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Now we shall see how this game played by a few very wealthy Americans plays out. There was a reason Glass-Steagel was put in place in the 1930’s The belief was that some commodities were too important to ALL Americans.  Food, housing and fuel were deemed the “Basics of Life”.  So the market was regulated to make sure people could not gamble on those commodities futures. Well as we have seen with Housing. The genius of Wall Street came up with an unregulated way to get around the prohibitions in the housing market. When they got bored with that, and the US dollar plunged they decided to buy Long in the Futures Market (something prohibited until 1999) and prices skyrocketed. Well to every up THERE IS A DOWN. As the Saudi’s warned that DOWN could be way down. We could have oil fluctuating between 150$$ and 40$$ a barrel for the next few years. I think at some point in those wild swings Industry comes to a stop.

These people are just spoiled rotten filthy rich dummies. They all should be in jail.

http://ca.news.yahoo.com/s/capress/081022/business/oil_prices 

Price of oil falls more than

$5 below US$67 on

US recession fears

Wed Oct 22, 3:26 PM

     

 

By Madlen Read, The Associated Press

NEW YORK – Oil prices tumbled below US$67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies – more evidence that the economic downturn is drying up energy demand.

The Energy Information Administration said crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy research firm Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.

Over the last four weeks, the EIA said, motor gasoline demand was down 4.3 per cent from the same period last year. Distillate fuel demand was down 5.8 per cent, and jet fuel demand was down 9.2 per cent.

“The main theme here that’s driving this market into new low ground is demand deterioration,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “As we begin to see evidence that demand is levelling – it doesn’t have to increase, just level – then we can start discussing a possible price bottom. But it appears premature at this point.”

In mid-afternoon trading, light, sweet crude for December delivery fell $5.52 to $66.66 on the New York Mercantile Exchange. The last time a front-month contract traded below $67 a barrel was June 2007.

The energy markets have also been weighed down by the weak stock market, as investors grow more pessimistic about how long it will take the economy to recover from the current global financial turmoil.

On Tuesday, DuPont, Sun Microsystems and Texas Instruments reported disappointing earnings and bleak forecasts, sending the Dow Jones industrials average down 2.5 per cent. The Dow was down another four per cent by Wednesday afternoon following more gloomy reports from the soon-to-be acquired bank Wachovia Corp., drugmaker Merck & Co., and insurer Travelers Cos.

“Oil is now highly correlated with the stock market,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. 

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Americans are not the only one worried:

http://news.xinhuanet.com/english/2008-10/17/content_10206571.htm 

Crude futures dip below $70 on demand concerns
www.chinaview.cn 2008-10-17 06:45:59   Print
    NEW YORK, Oct. 16 (Xinhua) — Crude futures dipped below 70 U.S. dollars a barrel on demand concerns Thursday after the U.S. government reported a unexpected rise in crude stockpile.    Light, sweet crude for November delivery plunged 4.69 dollars to settle at 69.85 dollars a barrel on the New York Mercantile Exchange after hitting 68.57 dollars, a level not seen since June 27, 2007.    Crude prices have declined more than half its July record high of 147.27 dollars a barrel due to investors’ increasing concerns that a global economic recession could curd energy consumption.

    Demand concerns

    “The price of a barrel of oil continued to decline today as fears of declining demand among market participants persist,” Wall Street Strategies’ senior research analyst Conley Turner told Xinhua.

    The weakening global economy and turmoil in the credit markets have clouded the outlook for world oil consumption.

    The Philadelphia Federal Reserve said regional manufacturing conditions weakened in October. The bank’s regional index came in at a negative 37.5 compared with a positive 3.8 for September.

    On Monday, Goldman Sachs cut its year-end forecast of oil to 70dollars a barrel from 115 dollars and lowered its price outlook for the end of 2009 to 107 dollars from 125 dollars per barrel amid global financial crisis.

    “The fact of the matter is that demand destruction is taking place in the United States as for the rest of the G7, for that matter as these economies teeter on the brink of recession,” said Turner.

    “While there may be some ebbing in the demand pressures out of India and China, it not going to be as much as what is occurring in the Unite States,” he added.

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 Even the Saudis and the Russians are concerned:

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http://bh.heraldinteractive.com/business/general/view/2008_10_22_Oil_falls_below__70_on_US_recession_fears/

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global oil supply, has signaled it plans to announce an output quota reduction at an emergency meeting Friday in Vienna.

But investors are skeptical about how much of the cut will be implemented, given the history of OPEC members exceeding their production quotas.

“There should be a short-term boost to prices when they announce a cut on Friday,” Chu said. “But OPEC production has always been above their quotas, so there’s a credibility problem.”

Crude oil is down 53 percent from its peak of $147.27 reached in mid-July.

A stronger dollar this week has also pushed oil prices lower. Investors often buy commodities like crude oil as an inflation hedge when the dollar weakens and sell those investments when the dollar rises.

The euro fell below $1.28 for the first time in nearly two years on Wednesday. The 15-nation euro dipped as low as $1.2736 in morning trading before rising slightly to $1.2873, down from $1.3003 late Tuesday in New York.

Investors are also watching for signs of slowing U.S. demand in the weekly oil inventories report to be released Wednesday from the U.S. Energy Department’s Energy Information Administration. The petroleum supply report was expected to show that oil stocks rose 2.9 million barrels last week, according to the average of analysts’ estimates in a survey by energy information provider Platts.

The Platts survey also showed that analysts projected gasoline inventories rose 3.0 million barrels and distillates went up 600,000 barrels last week.

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The Russians are threatening to go along. What if they were actually to join OPEC! Way to go Wall Street geniuses. Bravo! 

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 http://www.telegraph.co.uk/finance/financetopics/oilprices/3252279/Opec-to-cut-oil-supply-by-1.5m-barrels-a-day.html

Members of the Opec oil producers’

cartel have decided to cut production

by 1.5m barrels a day from November

in a bid to stem a collapse in prices.

By Russell Hotten, Industry Editor
Last Updated: 4:14PM BST 24 Oct 2008

This latest Opec meeting, brought forward from next month because of the severity of the slide in prices, comes as Russia shows increasing interest in cooperating with the organisation.

Russia, the world’s second largest oil producer after Saudi, has traditionally had representatives at Opec meetings but has never publicly tracked the organisations cuts and increases in production quotas.

But on Wednesday Russia’s Deputy Prime Minister Igor Sechin said his country may build a margin of spare oil production capacity as a means of influencing prices. However, he said Russia would not join Opec.

Nick Day, chief executive of the risk management consultancy Diligence, warns that any move by Russia to cooperate with Opec is fraught with political dangers. “One of Russia’s objectives might be to counter America’s influence on Saudi Arabia’s control of Opec. You could see Russia driving a wedge between Opec, with support from Iran and Venezuela.” He believes that if Russia’s oil revenues are reduced, Moscow might try to recoup money by raising the price of gas it exports to Europe.

Opec comprises 12 members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. The thirteenth, Indonesia, is due to leave the organisation at the end of 2008.

People Just Don’t Get Why We Have To Stop Burning The World Up – Stop please stop

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This is so sad it Makes The World Cry:

http://environment.newscientist.com/article/dn14976-arctic-air-temperatures-hit-record-highs.html?DCMP=ILC-hmts&nsref=news6_head_dn14976

Arctic air temperatures

hit record highs

  • 13:11 17 October 2008
  • NewScientist.com news service
  • New Scientist staff and Reuters

Autumn air temperatures have climbed to record levels in the Arctic due to major losses of sea ice as the region suffers more effects from a warming trend dating back decades, according to a new report.

The annual report issued by researchers at the US National Oceanic and Atmospheric Administration and other experts is the latest to paint a dire picture of the impact of climate change in the Arctic.

It found that autumn air temperatures are at a record 5 °C above normal in the Arctic because of the major loss of sea ice in recent years, which allows more solar heating of the ocean.

That warming of the air and ocean impacts land and marine life and cuts the amount of winter sea ice that lasts into the following summer, says the report.

The report adds that surface ice is melting in Greenland and that wild reindeer, or caribou, herds appear to be declining in numbers.

Domino effect

“Changes in the Arctic show a domino effect from multiple causes more clearly than in other regions,” says James Overland, an oceanographer at NOAA’s Pacific Marine Environmental Laboratory in Seattle and one of the authors of the report.

“It’s a sensitive system and often reflects changes in relatively fast and dramatic ways,” he says.

Researchers at the National Snow and Ice Data Center, part of the University of Colorado, recently reported that, this summer, Arctic sea ice melted to its second-lowest level ever.

The 2008 season, those researchers said, strongly reinforces a 30-year downward trend in Arctic ice extent – 34% below the long-term average from 1979 to 2000, but 9% above the record low set in 2007.

Last year was the warmest on record in the Arctic, continuing a region-wide warming trend dating to the mid-1960s. Most experts blame climate change on human activities spewing greenhouse gases into the atmosphere.

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Then there is this longer piece in The Independent;

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http://www.independent.co.uk/environment/climate-change/record-22c-temperatures-in-arctic-heatwave-394196.html 

Record 22C temperatures in Arctic heatwave

By Steve Connor, Science Editor
Wednesday, 3 October 2007

The high temperatures on the island caused catastrophic mudslides as the permafrost on hillsides melted, Professor Lamoureux said. “The landscape was being torn to pieces, literally before our eyes.”

Other parts of the Arctic also experienced higher-than-normal temperatures, which indicate that the wider polar region may have experienced its hottest summer on record, according to Walt Meir of the US National Snow and Ice Data Centre in Colorado.

“It’s been warm, with temperatures about 3C or 4C above normal for June, July and August, particularly to the north of Siberia where the temperatures have reached between 4C and 5C above average,” Dr Meir said.

Unusually clear skies over the Arctic this summer have caused temperatures to rise. More sunlight has exacerbated the loss of sea ice, which fell to a record low of 4.28 million square kilometres (1.65 million square miles), some 39 per cent below the long-term average for the period 1979 to 2000. Dr Meir said: “While the decline of the ice started out fairly slowly in spring and early summer, it accelerated rapidly in July. By mid-August, we had already shattered all previous records for ice extent.”

An international team of scientists on board the Polar Stern, a research ship operated by the Alfred Wegener Institute in Germany, also felt the effects of an exceptionally warm Arctic summer. The scientists had anticipated that large areas of the Arctic would be covered by ice with a thickness of about two metres, but found that it had thinned to just one metre.

Instead of breaking through thicker ice at an expected speed of between 1 and 2 knots, the Polar Stern managed to cruise at 6 knots through thin ice and sometimes open water.

“We are in the midst of a phase of dramatic change in the Arctic,” said Ursula Schauer, the chief scientist at the Alfred Wegener Institute, who was on board the Polar Stern expedition. “The ice cover of the North Polar Sea is dwindling, the ocean and the atmosphere are becoming steadily warmer, the ocean currents are changing,” she said.

One scientist came back from the North Pole and reported that it was raining there, said David Carlson, the director of International Polar Year, the effort to highlight the climate issues of the Arctic and Antarctic. “It makes you wonder whether anyone has ever reported rain at the North Pole before.”

Another team of scientists monitoring the movements of Ayles Ice Island off northern Canada reported that it had broken in two far earlier than expected, a further indication of warmer temperatures. And this summer, for the first time, an American sailing boat managed to traverse the North-west Passage from Nova Scotia to Alaska, a voyage usually made by icebreakers. Never before has a sail-powered vessel managed to get straight through the usually ice-blocked sea passage.

Inhabitants of the region are also noticing a significant change as a result of warmer summers, according to Shari Gearheard, a research scientist at the National Snow and Ice Data Centre. “People who live in the region are noticing changes in sea ice. The earlier break-up and later freeze-up affect when and where people can go hunting, as well as safety for travel,” she said.

Mark Serreze of the National Snow and Ice Data Centre, said: “We may see an ice-free Arctic Ocean in summer within our lifetimes. The implications… are disturbing.”

The North-west Passage: an ominous sign

The idea of a North-west Passage was born in 1493, when Pope Alexander VI divided the discovered world between Spain and Portugal, blocking England, France and Holland from a sea route to Asia. As it became clear a passage across Europe was impossible, the ambitious plan was hatched to seek out a route through north-western waters, and nations sent out explorers. When, in the 18th century, James Cook reported that Antarctic icebergs produced fresh water, the view that northern waters were not impossibly frozen was encouraged. In 1776 Cook himself was dispatched by the Admiralty with an Act promising a £20,000 prize, but he failed to push through a route north of Canada. His attempt preceded several British expeditions including a famous Victorian one by Sir John Franklin in 1845. Finally, in 1906 Roald Amundsen led the first trip across the passage to Alaska, and since then a number of fortified ships have followed. On 21 August this year, the North-west Passage was opened to ships not armed with icebreakers for the first time since records began.

Kay Bailey Hutchison, Newt Gingritch, John Boehner and the President of the United States Are All Proven Liars

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 Add to that list T. Boone Pickens and American Solutions (thus Grover Norquist). The high oil prices and the high gasoline prices were the direct result of Market Manipulation by commodity speculaters. It did not amount to the “single largest transfer of wealth overseas”, as Pickens claims. Almost all of those speculaters were right here in the good old US of A. They took billions of $$$ from poor and middle class people pockets. Those that could least afford it as their capitalist schemes brought the financial markets down.

Oil is now below 80$$ per barrel and gas is below 3$$ per gallon. Not a single new well has been drilled. No appreciable amount of oil has been added to the system. In other words, no new “supply” was added to the “market” and yet prices are falling. Hmmm so when are people going to go to jail?

 But bigger questions remains. Now that the market has been destabilized by speculators how low can the price of oil go? The Saudi’s estimate that it costs them 40$$ to put a barrel of oil on the deck of a ship, and ironically another 10$$ to ship it. Can the price of oil drop below 50$$ a barrel? And what happens then?

The Big Oil Companies worst fears have arrived. As millions of Americans (yours truely included) shed billions of miles of driving reducing demand for gasoline in unprecidented fashion, what will the outcome be for the automobile industry and what is left of America’s manufaturing base.

Oh did I mention – When are people going go to jail for this “harmless little prank”?

 www.yuwantitwhen.com

wreck.jpg

John McCain’s Global Warming Policy – Well, he calls it Climate Change

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But you know what he means, right? nudge nudge wink wink Know What He means?

 http://www.johnmccain.com/Informing/Issues/da151a1c-733a-4dc1-9cd3-f9ca5caba1de.htm

Climate Change

John McCain will establish a market-based system to curb greenhouse gas (GHG) emissions, mobilize innovative technologies, and strengthen the economy. He will work with our international partners to secure our energy future, to create opportunities for American industry, and to leave a better future for our children.John McCain’s Principles for Climate Policy

  • Climate Policy Should Be Built On Scientifically-Sound, Mandatory Emission Reduction Targets And Timetables.
  • Climate Policy Should Utilize A Market-Based Cap And Trade System.
  • Climate Policy Must Include Mechanisms To Minimize Costs And Work Effectively With Other Markets.
  • Climate Policy Must Spur The Development And Deployment Of Advanced Technology.
  • Climate Policy Must Facilitate International Efforts To Solve The Problem.


John McCain’s Cap and Trade PolicyJohn McCain Proposes A Cap-And-Trade System That Would Set Limits On Greenhouse Gas Emissions While Encouraging The Development Of Low-Cost Compliance Options. A climate cap-and-trade mechanism would set a limit on greenhouse gas emissions and allow entities to buy and sell rights to emit, similar to the successful acid rain trading program of the early 1990s. The key feature of this mechanism is that it allows the market to decide and encourage the lowest-cost compliance options.

How Does A Cap-And-Trade System Work?A cap-and-trade system harnesses human ingenuity in the pursuit of alternatives to carbon-based fuels. Market participants are allotted total permits equal to the cap on greenhouse gas emissions. If they can invent, improve, or acquire a way to reduce their emissions, they can sell their extra permits for cash. The profit motive will coordinate the efforts of venture capitalists, corporate planners, entrepreneurs, and environmentalists on the common motive of reducing emissions.

Greenhouse Gas Emission Targets And Timetables

2012: Return Emissions To 2005 Levels (18 Percent Above 1990 Levels)2020: Return Emissions To 1990 Levels (15 Percent Below 2005 Levels)

2030: 22 Percent Below 1990 Levels (34 Percent Below 2005 Levels)

2050: 60 Percent Below 1990 Levels (66 Percent Below 2005 Levels)

The Cap And Trade System Would Allow For The Gradual Reduction Of Emissions.

The cap and trade system would encompass electric power, transportation fuels, commercial business, and industrial business – sectors responsible for just below 90 percent of all emissions. Small businesses would be exempt. Initially, participants would be allowed to either make their own GHG reductions or purchase “offsets” – financial instruments representing a reduction, avoidance, or sequestration of greenhouse gas emissions practiced by other activities, such as agriculture – to cover 100 percent of their required reductions. Offsets would only be available through a program dedicated to ensure that all offset GHG emission reductions are real, measured and verifiable. The fraction of GHG emission reductions permitted via offsets would decline over time.Innovating, Developing and Deploying Technologies

To Support The Cap And Trade System, John McCain Will Promote The Innovation, Development And Deployment Of Advanced Technologies. John McCain will reform federal government research funding and infrastructure to support the cap and trade emissions reduction goals and emphasize the commercialization of low-carbon technologies. Under John McCain’s plan:

Emissions Permits Will Eventually Be Auctioned To Support The Development Of Advanced Technologies. A portion of the process of these auctions will be used to support a diversified portfolio of research and commercialization challenges, ranging from carbon capture and sequestration, to nuclear power, to battery development. Funds will also be used to provide financial backing for a Green Innovation Financing and Transfer (GIFT) to facilitate commercialization.John McCain Will Streamline The Process For Deploying New Technologies And Requiring More Accountability From Government Programs To Meet Commercialization Goals And Deadlines.

John McCain Will Ensure Rapid Technology Introduction, Quickly Shifting Research From The Laboratory To The Marketplace.

John McCain Will Employ The Inherent Incentives Provided By A Cap-And-Trade System Along With Government-Led Competitions As Incentives For New Technology Deployment.

John McCain Will Foster Rapid and Clean Economic Growth

John McCain Believes An Effective And Sustainable Climate Policy Must Also Support Rapid Economic Growth. John McCain will use a portion of auction proceeds to reduce impacts on low-income American families. The McCain plan will accomplish this in part by incorporating measures to mitigate any economic cost of meeting emission targets, including:

Trading Emission Permits To Find The Lowest-Cost Source Of Emission Reductions.Permitting “Banking” And “Borrowing” Of Permits So That Emission Reductions May Be Accelerated Or Deferred To More Economically Efficient Periods.

Permitting Unlimited Initial Offsets From Both Domestic And International Sources.

Effectively Integrating U.S. Trading With Other International Markets, Thereby Providing Access To Low-Cost Permit Sources.

Establishing A Strategic Carbon Reserve As A National Source Of Permits During Periods Of Economic Duress.

Early Allocation Of Some Emission Permits On Sound Principles. This will provide significant amount of allowances for auctioning to provide funding for transition assistance for consumers and industry. It will also directly allocate sufficient permits to enable the activities of a Climate Change Credit Corporation, the public-private agency that will oversee the cap and trade program, provide credit to entities for reductions made before 2012, and ease transition for industry with competitiveness concerns and fewer efficiency technology options.

A commission will also be convened to provide recommendations on the percentage of allowances to be provided for free and the percentage of allowances to be auctioned, and develop a schedule for transition from allocated to maximum auctioned allowances. Cap-and-trade system will also work to maximize the amount of allowances that are auctioned off by 2050. John McCain Will Provide Leadership for Effective International Efforts John McCain Believes That There Must Be A Global Solution To Global Climate Change. John McCain will engage the international community in a coordinated effort by:

Actively Engaging To Lead United Nations Negotiations.Permitting America To Lead In Innovation, Capture The Market On Low-Carbon Energy Production, And Export To Developing Countries – Including Government Incentives And Partnerships For Sales Of Clean Tech To Developing Countries.

Provide Incentives For Rapid Participation By India And China, While Negotiating An Agreement With Each. John McCain Will Develop a Climate Change Adaptation Plan John McCain Believes A Comprehensive Approach To Addressing Climate Change Includes Adaptation As Well As Mitigation. He believes:

An Adaptation Plan Should Be Based Upon National And Regional Scientific Assessments Of The Impacts Of Climate Change.An Adaptation Plan Should Focus On Implementation At The Local Level Which Is Where Impacts Will Manifest Themselves.

A Comprehensive Plan Will Address The Full Range Of Issues: Infrastructure, Ecosystems, Resource Planning, And Emergency Preparation.

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There are a ton of problems with this plan but the first of the problems is IT”S TOO LONG. In fact, I doubt that anyone will ever read these words, and not just because this is an obscure blog at an obscure site. Nobody will ever get this far! The other problem is it takes too long. I mean no significant reductions before 2050. Who is going to be left alive at that point? But the real killer is the Cap and Trade system. This is just an industry fudge to get around the Clean Air Act. We need to shut down every coal fired powerplant in this country. Contrary to T. Boone Pickens, we need to convert all of those plants to natural gas, until we can get rid of them. We need to start at least three major “Hot Rocks” projects here in the US now. More about Cap and Trade when we look at Obama’s environmental proposals.

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John McCain’s Energy Policies – The “drill here, drill now” crowd looks pretty foolish right about now

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Even Bill O’Reilly agrees with me:

www.billoreilly.com

The rapid rise in Oil Prices and the concurrent rise in gasoline prices was caused by speculators in the oil market, reductions in gas refinement, the drop in the dollar value because of speculators, and China stock piling diesel fuel for the Olympics. There is no way that it was remotely related to supply and demand. Demand fell as the price climbed. Even conservative estimates say that so far this year Americans have driven 50 billion miles fewer than just last year.

Even worse than that is the fact that the Congress conceded the point to an angry electorate and passed a bill expanding drilling. That inspite of the fact that there is no oil in ANWR or along most of the continental shelf, there will be no bids on the leases if they are ever put up for sale, and we don’t have any oil rigs to drill there anyway. Every last rigg in the WORLD is spoken for right now.

So given all of that why is John McCain still touting the policy below?:

http://www.johnmccain.com/Informing/Issues/17671aa4-2fe8-4008-859f-0ef1468e96f4.htm

John McCain Will Commit Our Country To Expanding Domestic Oil Exploration. The current federal moratorium on drilling in the Outer Continental Shelf stands in the way of energy exploration and production. John McCain believes it is time for the federal government to lift these restrictions and to put our own reserves to use. There is no easier or more direct way to prove to the world that we will no longer be subject to the whims of others than to expand our production capabilities. We have trillions of dollars worth of oil and gas reserves in the U.S. at a time we are exporting hundreds of billions of dollars a year overseas to buy energy. This is the largest transfer of wealth in the history of mankind. We should keep more of our dollars here in the U.S., lessen our foreign dependency, increase our domestic supplies, and reduce our trade deficit – 41% of which is due to oil imports. John McCain proposes to cooperate with the states and the Department of Defense in the decisions to develop these resources.

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Shouldn’t we be saying “anywhere but here, anytime but now”? Like New Orleanians say about hurricanes.
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Barack Obama’s Climate Change Policies – He makes no distinction between Climate and Energy use

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But John McCain does make such a distinction so in fairness, I did too.

http://my.barackobama.com/page/content/newenergy

Reduce our Greenhouse Gas

Emissions 80 Percent by 2050

• Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050.
• Make the U.S. a Leader on Climate Change.

Learn More…
 

GET THE DETAILS:

Read the full version of The Obama-Biden New Energy for America plan

The Obama-Biden environmental plan

The Obama-Biden plan to crack down on excessive energy speculation
 

Drill Here, Drill Now – The disconnect between the industry and its flacks

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hahahahahahaha:

http://wilderness.org/ourissues/wilderness/

Andrew Bush sends this along

Dear reporter/editor:

Given today’s announcement that Congress will allow the offshore drilling ban to expire—opening many more acres to drilling—we thought you would be interested in the story below from yesterday’s business wire, “Chesapeake Energy (CHK) Plans To Reduce Drilling Budget.” In a nutshell, before the dust has settled on the oil and natural gas industry’s “drill, baby, drill” multi-million dollar advertising campaign, the country’s largest independent natural gas producer has announced that it is curtailing – or “shutting in” — its near-term natural gas production, and slashing its drilling budget by 17%. All because the price of gas to consumers has apparently drifted “too low” for consumers, in the company’s view.

“ Chesapeake ’s actions and attitude typify the ‘public be damned’ manner in which the oil and gas industry in this country operates,” said Wilderness Society Senior Policy Advisor Dave Alberswerth . “American consumers and Congress were convinced by the industry’s ‘drill baby drill’ campaign that the key to lowering energy prices was “more drilling”, at the same time that one of our nation’s largest gas producers was apparently laying plans to curtail its own drilling and production operations for fear that their profits weren’t high enough. American consumers should take note of Chesapeake’s actions, because this company is among those that have promoted the notion that American has abundant natural gas supplies, that all we have to do is drill for it, and has even urged Congress to subsidize greater use of natural gas to fuel our vehicle fleet.” Alberswerth noted that although most of Chesapeake ’s operations are on non-federal lands, it is likely that other natural gas producers who do have operations on federal lands will follow suit.

“ Chesapeake ’s action is another good example of why increasing domestic drilling is an inefficient solution for reducing energy prices,” said Wilderness Society Economist Pete Morton , who also noted that after eight years of the Bush drilling boom and more than 170,000 new natural gas wells, energy prices are still high. “Whether Chesapeake ’s action is driven by high extraction costs or a profit-maximizing desire to keep prices high for consumers, it reinforces the need for a thorough economic analysis of proposals to increase domestic drilling.”

Contact:  Dave Alberswerth (202/429-2695) and Dr. Pete Morton (303/650-5818, ext 105), The Wilderness Society

http://www.streetinsider.com/Corporate+News/Chesapeake+Energy+(CHK)+Plans+To+Reduce+Drilling+Budget/4008656.html

Chesapeake Energy (CHK) Plans To Reduce Drilling Budget 

September 22, 2008

Chesapeake Energy Corporation (NYSE: CHK) announced plans to reduce its drilling capital expenditure (capex) budget during the second half of 2008 through year-end 2010 by approximately $3.2 billion, or 17%, in response to an approximate 50% decrease in natural gas prices since June 30, 2008 and concerns about the possibility of an emerging U.S. natural gas surplus in advance of increased demand from the U.S. transportation sector. Of the $3.2 billion drilling capex reduction, $0.8 billion is attributable to the drilling capex carry associated with the company’s recently closed Fayetteville Shale joint venture with BP America (NYSE: BP), $0.5 billion is attributable to the drilling capex carry anticipated in a Marcellus Shale joint venture and $1.9 billion is attributable to reduced drilling activity. The company plans to reduce its current operated drilling rig count of 157 rigs to approximately 140 rigs by year-end 2008 and expects to keep its rig count relatively flat through 2009 and 2010.

In addition to reducing drilling capex, Chesapeake has elected to temporarily curtail a portion of its unhedged natural gas production in the Mid-Continent region due to unusually weak wellhead natural gas prices that are substantially below industry breakeven costs. The company has curtailed approximately 100 million cubic feet (mmcf) per day of net natural gas production (approximately 125-150 mmcf per day gross) and plans to restore this production once natural gas prices recover from recently depressed wellhead price levels of $3.00 – 5.00 per thousand cubic feet (mcf). This curtailment represents approximately 4% of the company’s current net natural gas and oil production capacity of over 2.3 billion cubic feet of natural gas equivalent per day (92% natural gas).

The company has also reduced its full-year 2008 production growth estimate to 18% from 21% to account for the temporary curtailment discussed above, the sale of 45 million cubic feet of natural gas equivalent (mmcfe) per day of production associated with its Fayetteville Shale joint venture with BP, the anticipated sale of 60 mmcfe per day of production in the 2008 fourth quarter associated with the company’s fourth volumetric production payment (VPP) and shut-ins in the 2008 third quarter of onshore production associated with natural gas processing plant limitations as a result of damage by Hurricane Ike.

Additionally, as a result of reduced drilling activity levels announced today, the company has lowered its anticipated production growth forecasts in 2009 and 2010 to 16% per year from 19% per year. At these levels, Chesapeake believes its production growth will still remain at or near the top of its large-cap peer group, particularly in light of continued strong drilling results from its shale plays. Notably, during the month of September, Chesapeake completed three additional horizontal Haynesville Shale wells with average per well initial production rates exceeding 10 mmcfe per day bringing its total horizontal Haynesville Shale wells on production to 14.[SM]

Drew F. Bush

Communications Associate

The Wilderness Society

drew_bush@tws.org

Phone: (202)-429-7441

Fax: (202)-429-3945

The Wilderness Society’s mission is to protect wilderness

and inspire Americans to care for our wild places.

Natural Gas Powered Cars Come To Springfield – Well not exactly..but T. Bone Picken’s commercials have.

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Iran is currently converting its entire surface transportation fleet to natural Gas so it can sell its oil and gasoline to the rest of the world. In a Theocracy and in an authoritarian country like Iran it is pretty easy to do. About half of Brazil’s much vaunted enthanol economy is actually run by natural gas as well. The stuff is cheap (in some parts of the world free) and relatively clean. Is Pickens trying to get richer. Heck yah. Anyway if they were serious about the idea they would quit jawin and make it happen. They would:

1. Put a natural gas dispenser in at least one gas station in everytown in America that has one.

2. Offer conversion kits for cars at a reasonable price, at a location with installation included. They could even offer your first tank of natural gas for free.

3. Begin the phase out of gasoline despensers at gas stations one at a time and replace them with natural gas dispensers until they are gone.

4. They damn well better recycle all the gasoline pump parts and plan on the removal of the gasoline storage tanks.

There would still be a small gasoline market and some people would refuse to convert. There would be some explosions and other mishaps along the way. Humans are primates after all. But as long as everyone looks at the ground and rubs their big toe in the dirt…Well lawdedah.

If they were really serious they would come to your house, install a fueling station and leave. Something akin to, “Go ahead, I dare you to use natural gas”!

http://auto.howstuffworks.com/ngv.htm

How Natural-gas Vehicles Work

by William Harris

Kermit the Frog once said, “It’s not that easy bein’ green.” Although he wasn’t referring to cars, his observation seems particularly appropriate for the auto industry today: Designing, developing and marketing “green” cars has not been an easy task, which is why gasoline-powered vehicles still rule the road and fossil fuels still account for almost 75 percent of the world’s energy consumption. As gasoline prices soar and concern over harmful emission mounts, however, cars that run on alternate fuel sources will become increasingly important. A natural-gas vehicle, or NGV, is the perfect example of such a car — it’s fuel-efficient, environmentally friendly and offers a relatively low cost of ownership.

ORIGINS OF NATURAL GAS 

Most modern wells extract both crude oil and natural gas at the same time. Some natural gas can be used as it comes from the well without any refining, but most requires processing. Natural gas processing consists of separating all the various hydrocarbons and fluids from the “wet” natural gas until it is “dry.” Dry natural gas is pure methane, which is the fuel of choice for many consumer applications, including natural-gas vehicles

Natural gas is not the only source of methane. Methane can also be obtained by fermenting organic matter, such as manure, in low levels of oxygen. In such conditions, bacteria will use the nutrients in manure as a food source and will release methane and carbon dioxide as waste products. This methane, known as bio-gas, can be collected and used as a fuel source.

The oil shortages of the late 1960s and early 1970s brought renewed interest in natural gas as a fuel source, especially for automobiles.

Today, owners of natural-gas vehicles can fill up their cars at one of 1,300 fueling stations located in the United States. Honda also offers a personal natural gas pump to people who purchase its natural-gas-powered Civic. The pump uses a home’s existing natural gas lines and can be installed for $500 to $1500.

In the next section we’ll discuss how natural-gas vehicles are designed.

 :}

While there are differences in the fuel tank (hint: you get rid of the old one and put in three natural gas tanks), and the chassey with a natural gas vehicle, the biggest difference is at the engine.

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Engine Modifications
When the engine in an NGV is started, natural gas flows from the storage cylinders into a fuel line. Near the engine, the natural gas enters a regulator to reduce the pressure. Then the gas feeds through a multipoint gaseous fuel-injection system, which introduces the fuel into the cylinders. Sensors and computers adjust the fuel-air mixture so that when a spark plug ignites the gas, it burns efficiently. A natural-gas engine also includes forged aluminum, high-compression pistons, hardened nickel-tungsten exhaust valve seats and a methane-specific catalytic converter.

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Are they popular? Well it depends on who you listen too. 

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http://www.sltrib.com/opinion/ci_10379094

Article Last Updated: 09/04/2008 07:20:35 AM MDT

State and federal tax credits. Cheap fuel. Free parking at meters in Salt Lake City. A ticket to the high­occupancy- vehicle lane, even if you’re driving solo.
    Plus that warm, smug feeling that comes from knowing that you’re polluting less than the other guy.
    It’s no wonder that more and more Utahns – the nonprofit Utah Clean Cities Coalition, using statistics from fueling sta­tions, estimates 20,000 – are driving vehicles powered by clean-burning compressed natural gas. Considering that it costs a mere 87 cents for enough CNG to equal the energy in a $4 gallon of gasoline, what’s surprising is that even more mo­torists have not made the switch.
    Some CNG converts are piloting the Honda Civic GX NGV, the only compressed natural gas production vehicle cur­rently on the market. Others have bought used cars that were either built or professionally converted to use CNG. Still more are taking their gasoline-powered cars to certified me­chanics and having them rigged to run exclusively on CNG, or to burn both natural gas and gasoline. Kudos. The environ­ment thanks you. Future generations will thank you. And your wallet thanks you.

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Here is a couple of places you can buy natural gas automotive products.
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 http://www.google.com/products?sourceid=navclient&ie=UTF-8&rls=RNWE,RNWE:2006-03,RNWE:en&q=natural+gas+cars&um=1&sa=X&oi=product_result_group&resnum=1&ct=title

http://www.pcmag.com/article2/0,2817,2329287,00.asp

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The Peak Oil People Sometimes Scare Themselves – Especially when they get together for a little soire

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I know this is dated but the conference was held at the middle of this speculative oil price spike that has gone on for at least 6 months. I wonder if the Peak Oil folks know how to tell a speculative spike, a real spike through scarcity of production facilities and true Peak Oil. All of them would shadow a simlar spike?

http://www.mlive.com/news/grpress/index.ssf?/base/news-42/1212300955258630.xml&coll=6

What happens when oil runs out?

 

Sunday, June 01, 2008By Garret M. Ellison

The Grand Rapids Press

GRAND RAPIDS — The collapse of cities, a return to rail transportation, famine and a worldwide depression are but a few outcomes predicted by energy industry insiders and believers in the peak oil theory who gathered this weekend at Calvin College.

“We will have a different civilization, to be sure,” said David Goodstein, a vice provost and professor of physics at the California Institute of Technology (Caltech).

Goldstein wrote the book, “Out of Gas: The End of the Age of Oil.” He joined dozens of speakers at the International Conference on Peak Oil and Climate Change.

He was the kickoff speaker at the three-day event, which explored the double-pronged crises of peak oil and climate change by examining their effects on society, and offering sustainable solutions.

Peak oil is the point at which half of the world’s supply has been extracted and production levels off. This is expected to cause massive societal upheaval because the worldwide demand for oil is increasing rapidly.

It’s a controversial subject, and not all are convinced. Skeptics and some oil producers say a peak is years away and that new technologies will allow our energy appetite to be satisfied by tar sands and oil shale while renewable sources come online.

But those who believe in the peak oil scenario say we have reached that point already or will in a few years. New oil discoveries are slim. The last major discovery was in the 1960s.

They say that alternative energies cannot match the capacity of fossil fuels, and nuclear fusion — the one known silver bullet — is perpetually 25 years in the future.

Supply will be further constrained by aging infrastructure, they say. These arguments are fueled by the rising cost of food and oil, which recently topped $130 a barrel.

One point that everyone agrees on is that oil is a finite resource, and that nobody quite knows for sure how much is left.

 “We will see the effects of the peak very soon. How soon — I don’t know,” Goldstein said.

“It’s possible that it’ll be off another five, 10, or even 20 years.

“But 20 years is nothing on the scale of human history,” he said. “Our children, or our grandchildren are in for some very difficult times.”

That could mean civil unrest and famine, as petrol-based fertilizers become prohibitively expensive, driving up the cost of food — and everything else.

“The haves and the have-nots are going to be fighting for diminishing reserves,” said Steven F. Crower, an energy investment banker based in Denver.

“I think the price of oil will cause the collapse of the dollar,” he said. “The new gold standard is going to be energy.”

That’s somewhat less dire than the reality painted by Richard Heinberg, an author of eight books on peaking resources and a senior fellow at the Post Carbon Institute.

All complex systems inevitably collapse, said Heinberg, and ours is no different. A local-based agrarian economy is his vision of the future. Rail will be the primary transportation mode.

For some conference attendees, the concept of peaking oil production seemed like a very stark reality.

“I think it was Hunter S. Thompson who said that sometimes the massive crime that takes place in front of everyone is the one that goes unnoticed,” said Jackson Carreras, 24, of Plymouth.

The conference was organized by Aaron Wissner, of Middleville, who heads-up the local nonprofit, Local Future. It runs through 5 p.m. today.

Send e-mail to the author: gellison@grpress.com

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Here are the people that brought you the above conference. They seem like nice enough young people

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http://localfuture.org/

Local Future
Paths to Sustainability

Michigan Conference – Nov. 2008

NEW!!!  Announcing “The Conference of Michigan’s Future: Energy, Economy & Environment” for Friday, Nov. 14 through Sunday, Nov. 16 at Crystal Mountain Resort in Thompsonville, Michigan.  Click the link above for speakers, ticket, and other specifics.

International Conference – Online

Local Future hosts the International Conference on Peak Oil and Climate Change: Paths to Sustainability.  The inaugural conference features 50 presenters including Richard Heinberg, Julian Darley, Dr. David Goodstein, Megan Quinn Bachman, Stephanie Mills, and Pat Murphy.

NEW! – Watch conference presentations & download podcasts for free.

 

Introduction

Unemployment, inflation, war, peak oil, climate change, biodiversity loss, overpopulation — global problems that need local solutions.

Local Future helps communities develop compassionate, sustainable, local, systems to provide jobs, food, energy, transportation, and essential services.

Local Future Network members develop these systems by helping their community to transition from dependent units of the failed global economy; to independent cultures of compassionate, sustainable, local economy.

Global Problems

The global economic system creates problems which threaten humanity and the planet:

  • peak oil
  • climate change
  • over population
  • resource depletion
  • widespread pollution
  • misallocation of power
  • institutional cruelty
  • economic instability
  • environmental destruction
  • geopolitical conflict & war

This unsustainable global economic system fails to protect humans, the environment, and the natural systems on which all life depends.  It does not meet the long term goals of civilization. 

When a system fails to such a catastrophic degree, it is time for change.

Local Solutions

New local systems must be developed that are grounded in a value system of truth, compassion, understanding, sustainability, renewal and community.  Developing new systems takes dedicated individuals who share the common value system, walk a common path, and move towards a common vision of the future.  Local systems are needed to provide:

  • jobs – that are challenging, safe and community oriented
  • money – community currency that creates jobs, motivates progress and reinforces values
  • food – that is nutritious, compassionate, sustainable, organic and available year-round
  • energy – heat, electricity and fuels from renewable sun, wind, water and biomass sources
  • transportation – utilizing ride sharing, mass transit, community vehicles and human power
  • homes – safe, comfortable and welcoming, zero energy new homes and retrofits
  • water – fresh, clean, free water that is owned and managed locally
  • waste management  – emphasizing reduce, reuse and recycling
  • health care – high quality, low cost, community based services and prevention
  • education – local teachers dedicated to providing continuing service
  • security – utilizing open communication, problem solving, education and dialogue
  • entertainment – opportunities for all to participate and enjoy
  • culture – celebrating diversity and history
  • spirituality – inviting all people to explore the deeper questions of life

Members of Local Future Network communicate and meet to learn, support, plan, and act.  They take the initiative to increase independence for themselves and their communities.  Their shared value system of truth, compassion, understanding, sustainability, renewal and community guides their actions toward a vision of a prosperous local future.

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Oil Speculators Are the Modern Robber Barons – State Journal Register letter to the editor hits the tap on the barrel head

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I swore on my mother’s grave (sorry mom) that I would not put up a post about oil prices until they fell below 100$$ per barrel because I was tired of people pointing fingers at each other because the whole system is rigged. The Chinese were hoarding diesel for the Olympics (now over), the speculator’s contracts were lapsing (August 31 and September 15), the Senate is going to have hearings in the middle of September (hint: it will all be back to normal by then), and when the oil prices fall the gasoline refiners will lose their cover and half to ramp up aritificially low production levels to drop the price of gasoline. BUT not before 300 billion $$$ are vacuumed out of poor people’s pockets. Boy that took a long time to say! Then I saw this letter and was re-energized to put the facts out there one more time, so maybe people would wake up and just stop using those nasty stinky oil products.

http://www.sj-r.com

Things could be done

to reduce price of gasoline

The recent letters regarding the why and wherefores of the price of oil and

 gasoline prompted me to join in the debate.

First, a few observations:

Since 2003, investments in commodity index funds have increased

 from $13 bil­lion to $$260 billion, a 20-fold increase.

The Commodity Exchange Commission has already set

limits on the holdings any one investor can have in a commodity

to prevent speculation. But the larger institu­tional investors

(known as “swap dealers”) such as Goldman Sachs have exploited an

exemption that allows them to bypass those limits if they make trades through

brokers or dealers.

The majority of these trades in the USA are made by a British company

 with head­quarters in Atlanta while all the trading takes place in

Chicago! They do have a rep in London, Robert Reid, who answers to Atlanta.

The intercontinental exchanges do not have to abide by the rules set up by

the New York Mercantile Exchange be­cause they are listed as a foreign company!

Last month Michael Masters, a portfolio manager, told Congress that index

speculators had bought the equivalent of 1.1 billion bar­rels of oil — eight times

 as much as the United States has added to the Strategic Petroleum Reserve

over the last five years!

Because of all this speculation the price of oil has reached $140 a barrel.

The speculators in oil futures obviously say it is sup­ply and demand that

is causing the rise in prices. Granted, there is a certain amount of this i

nvolved, but not in the USA. The demand or use of oil in the U.S. has

been stead for at least a decade.

The ex-president of NYMEX, appearing before a congressional committee

a few weeks ago stated that if margins, which are now 50 percent, were

increased, the price of oil would drop to approximately the marginal cost

of oil, which is between $60 and $70 per barrel. It was also stated that

these margins could be increased, accord­ing to NYMEX rules, during an

 emergency. I think this is an emergency! By the way, it was stated that this

could be done within a 30-day period.

P.S. Just recently, a bill that would put new limits on speculative trading

 in ener­gy commodities failed to get the two-thirds majority required.

Most Republi­cans objected to the bill — the vote was 276 to 151.

Eric Gregg Springfield

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Think Eric is crazy? Want to hear more names of the AMERICANS picking your pocket? Well okie dokie then.

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http://www.nader.org/index.php?/archives/1276-Stop-the-Oil-Speculators.html

Tuesday, May 27. 2008

Posted by nimda in In the Public Interest

Stop the Oil Speculators

What factors are causing the zooming price of crude oil, gasoline and heating products? What is going to be done about it?

Don’t rely on the White House—with Bush and Cheney marinated in oil—or the Congress—which has hearings that grill oil executives who know that nothing is going to happen on Capitol Hill either.


Last week the price of crude oil reached about $130 a barrel after spiking to $140 briefly. The immediate cause? Guesses by oil man T. Boone Pickens and Goldman Sachs that the price could go to $150 and $200 a barrel respectivly in the near future. They were referring to what can be called the hoopla pricing party on the New York Mercantile Exchange. (NYMEX)

Meanwhile, consumers, workers and small businesses are suffering with the price of gasoline at $4 a gallon and diesel at $4.50 a gallon. Suffering but not protesting, except for a few demonstrations by independent truckers.

A consumer and small business revolt could be politically powerful. But what would they revolt to achieve? Their government is paralyzed and is unable to indicate any action if oil goes up to $200 or $400 a barrel. Washington, D.C. is leaving people defenseless and drawing no marker for when it will take action.

Oil was at $50 a barrel in January 2007, then $75 a barrel in August 2007. Now at $130 or so a barrel, it is clear that oil pricing is speculative activity, having very little to do with physical supply and demand. An essential product—petroleum—is set by speculators operating on rumor, greed, and fear of wild predictions.

Over the time since early 2007, U.S. demand for petroleum has fallen by 1 percent and world demand has risen by 1.3 percent. Supplies of crude are so plentiful, according to the Wall Street Journal, “traders of physical crude oil say their market is suffering from too much supply, not too little.”

Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because, in the words of Hossein Kazempour Ardebili, Iran’s oil governor, “there are simply no buyers because the market has more than enough oil.”

Mike Wittner, head of oil research at Societe Generale in London agrees. “There’s various signals out there saying for right now, the markets are well supplied with crude.”

Historically, oil has been afflicted with the control of monopolists. From the late nineteenth century days of John D. Rockefeller, and his Standard Oil monopoly, to the emergence of the “Seven Sisters” oligopoly, made up of Standard Oil, Shell, BP, Texaco, Mobil, Gulf and Socal, to the rise of OPEC representing the major producing countries, the “free market” price of oil has been a mirage. Despite the breakup of the Standard Oil company by the government’s trustbusters about 100 years ago, selling cartels and buying oligopolies kept reasserting themselves.

In an ironic twist, the major price determinant has moved from OPEC (having only 40% of the world production) and the oil companies to the speculators in the commodities markets. What goes on in the essentially unregulated New York Mercantile Exchange (NYMEX)—without Commodity Futures Trading Commission (CFTC) enforced margin requirements, and, unlike your personal purchases, untaxed—is now the place that leads to your skyrocketing gasoline bills. OPEC and the Big Oil companies reap the benefits and say that it’s not their doing, but that of the speculators. Gives new meaning to “passing the buck.”

Deborah Fineman, president of Mitchell Supreme Fuel Co. in Orange, New Jersey, summed up the scene: “Energy markets have been dictated for too long by hedge funds and speculators, who artificially manipulate the numbers for their own benefit. The current market isn’t based on the sound principles of supply and demand but it is being rigged by companies and speculators who are jacking up prices for their own greed.”

Harry C. Johnson, former banker who worked for many years inside Big Oil and ran his own small oil company in Oklahoma, blames the CFTC, the Department of Energy, the Administration, and Congress, as “asleep at the switch on an issue that is probably costing U.S. consumers $1 billion per day.”

He cites “some industry experts, who profit greatly from the high price of crude, and have stated openly that the worldwide economic price of crude, absent speculators, would be around $50 to $60 per barrel.

Imagine, our government is letting your price for gasoline and home heating oil be determined by a gambling casino on Wall Street called NYMEX. The people need regulatory protection from speculators and an excess profits tax on Big Oil.

In addition, a sane government would see the present price crises as an opportunity to expand our passenger and freight railroad capacity and technology.

A sane government would drop all subsidies and tax loopholes for Big Oil’s huge profits and other fossil fuels and promote a national mission to solarize our economy to achieve major savings from energy conservation technology, retrofitting buildings, and upgrading efficiency standards for motor vehicles, home appliances, industrial engines and electric generating plants.

Those are the permanent ways to achieve energy independence, reduce our trade deficit, create good jobs that can’t be exported and protect the environmental health of people and nature.

Those are the reforms and advances that a muscular consumer, worker and small business revolt can focus on in the coming weeks.

What say you, America?