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Entries in Oil (15)

Wednesday
Dec152010

Government Goes After BP

Yahoo/AP

It appears that 8 months after the start of the oil spill in the Gulf, the administration is going after BP. How this plays out is anyones guess. Obviously, the region, its economy and the people that live on the coast have suffered. They have lost their business, their tourism and for many, their way of life. The effects of the spill are still not fully know and it could be years before all the damage is understood.

What I want to know is what is the plan from here? Do we push ahead with drilling in the region or do we abandon it altogether? Do we try and find out what oversight was lacking and who did not meet their responsibilities or do we say the heck with it and give up?

With projects of this size and complexity, there are risks and they need to be evaluated. With oil creeping back towards $100 a barrel and the economy still teetering on a ledge, can we abandon domestic production? Do we want to run off producers and exploration outfits to other countries who would be happy to have them? Do we really want to depend even more on foreign sources of oil? I think these questions should be asked and we need to be careful how we proceed. We need to hold those who did not follow the regulations and safety guidelines responsible, but lets not destroy and industry and put our national security at risk. Lets not make the problem worse by punishing everyone in the industry for the acts of a few.

Tuesday
Sep142010

OPEC Turns 50 

Renewable Energy World

Supporters of American ethanol reminded congress today of a not so glorious milestone. OPEC turns 50 and many wonder how much longer we will allow the cartel to hold sway over the American economy and national security.

“For 50 years, the OPEC oil cartel has had America over a barrel of foreign oil. We have had the opportunity in the past to break this chain. We need to enact policies to ensure we won’t be celebrating another 50 years for OPEC. ”

Between the trillions spent on fighting Middle East wars and the annual tribute of $300 billion in purchases, I think it's time we look at the relationship and do something to change it. We have several different sources right here in the US that can be tapped and help reduce our dependence on the Middle East. From our oil and gas supplies in the continental US, Canada and Alaska to all the renewables such as solar, ethanol and wind. We have what we need here, all we need is the will to use it. Not being a political blog, I am not going to give my opinion on who and what is holding things up. What I will say with a firm voice is that we all need to come together to ensure that DC makes strides in allowing and supporting domestic energy production. Not only could we provide abundant fuel, but also cleaner fuel. To top it all of, we are talking about millions of potential jobs that could be created. Sounds like a win win to me. Lets just hope that those in power see it as well.

Friday
Aug202010

1 More Reason For Domestic Drilling

The Economist

This article makes a point that I think gets lost in the conversation when people talk about oil production. The major producers felt that once the majority of fighting in Iraq ended, that they would be able to come in and work with the government to get Iraq producing at levels greater than Saudi Arabia. They have the resource to do so, but not the will. As the article pointed out, the infrastructure is years away from being sufficiently developed, the closeness to Iran is a serious security issue, you have what amounts to bandits and militants targeting oil pipelines and international workers and lastly you have a government that can not decide if they want to work with the firms or not. Not exactly a hotbed of confidence.

Which brings me to my point. Why are companies even risking their people and resources in a place that does not want them around when they could be focusing their efforts and resource dollars in a safe environment. I'm talking about North America. That's right, from Alberta south to Mexico, we have an abundance of fuels that can be tapped. All without the worry of militants on motorcycles coming to blow you up. Imagine if we could persuade the companies to invest their billions in R&D into clean technologies. Imagine if they would focus on making the use of fossil fuels a clean venture. It would seem like a no brainer. However no matter what anyone says, we have not rolled out the red carpet to those who have the money and know how to make it happen. So, companies will continue to risk working in dangerous parts of the world and we would continue to see jobs that could be created in North America never appear on the horizon. What should be a win-win is really a lose-lose.

Monday
Aug092010

Foreign Governments & Oil Deals

http://bit.ly/91ONO8

Here is something I feel we are seeing way to much of lately. Foreign governments, and I use the term loosely, keep trying to change deals after the fact. This time it's Ecuador. It appears a new government has taken the reigns and they are trying to find the biggest cash cow to milk. In this instance it's foreign oil companies. They are hoping for a redesign of the current contracts to bring more cash into the government coffers. It should not surprise you that they will get what they want having learned from everyone's favorite deal breaker in Venezuela.

You have to ask yourselves why do these oil companies continue to put themselves in a position where they won't be able to predict what is going to happen any time a new government is installed. One of the reasons is because of insane energy policies in their country of origin which forces them to have to go abroad to find oil and natural gas. We here in North America are blessed with an abundance of resources. We are especially blessed with energy resources. However, due to politics and legal wrangling, we are unable to access or take advantage of that wealth.

Instead we are forced to drill in countries with governments that don't honor contracts or have to go looking for oil and gas in extreme environments. Can you say deep water drilling? Of even greater consequence, we open ourselves to a potential national security nightmare that could easily have been averted. Has anyone been paying attention to Israel and Iran? What do you think would happen to oil supplies coming out of the Middle East if they went to war over Iran's nuclear ambitions?. Not to mention the price spike that would go with it? I can promise you it will not benefit our anemic economy.

Until we start treating our energy needs and resources with a common sense approach, we will continue to be at the mercy of foreign governments and their desires. We will leave ourselves open to crippling financial pain and we risk completely destroying our economy. I really hope we come to our senses before that happens.

Wednesday
May192010

Crude Trading Lower

http://www.rigzone.com/news/article.asp?a_id=93499

As of a few minutes ago crude is still trading lower. You would think that the spill in the gulf might help to raise prices but that has not been the case so far. The strong dollar is helping to keep the price of oil down. As well, the Cushing, Oklahoma stock piles appear to be abundant. With the economy suffering good/bad news daily, we don't seem to be able to get any momentum in the price. The dollar/Euro trade is another mystery that we will just have to keep a closer eye on. My bet is that oil continues to trade at currentl levels.