OIL

Foiled Bid Stirs Worry for U.S. Oil
By JAD MOUAWAD (http://query.nytimes.com/search/query?ppds=bylL&v1=JAD%20MOUAWAD&fdq=19960101&td=s ysdate&sort=newest&ac=JAD%20MOUAWAD&inline=nyt-per) August 11, 2005

When Cnooc, the Chinese government-owned oil company, dropped its bid to buy Unocal (http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=UCL) this month, it said political opposition in Washington had scuttled the plan. The question oil companies now face is whether they might suffer similar political retribution in their own dealings with foreign governments.

The fate of Unocal was finally settled yesterday when a majority of the company's shareholders approved a takeover offer from Chevron (http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=CVX) worth about $18 billion. The battle has left a bitter taste among many in the oil and gas industry because of the hostility displayed by lawmakers and the consequences this might have for United States oil companies worldwide.

Unocal's vote ends months of uncertainty after Cnooc's takeover attempt ignited a lobbying and political battle in Washington led by Chevron's allies in Congress. The struggle surrounding the takeover highlights how the question of access to oil and gas reserves remains one of the most sensitive and pressing faced by the industry. Yesterday, crude oil prices touched a new high of $65 a barrel in New York. [Page C7.]

"It's a tremendous precedent-setter for a government to interfere and declare that national security is at stake," said Daniel Yergin, the president of Cambridge Energy Research Associates, an oil consultancy. "What is this going to mean for American oil companies from Algeria to Zanzibar?"

Governments from oil-producing countries like Russia and Venezuela try to put pressure on foreign corporations when oil prices are high. Other producers, like Mexico or Saudi Arabia, simply bar foreign companies from investing in their oil or gas sectors. In each case, the position of the United States government is fairly consistent: free markets are the best guarantee for the future availability of energy supplies.

But that position has been partly undermined by recent actions in Congress over Cnooc. Representative Richard Pombo, a Republican from California whose district includes Chevron's headquarters, argued that the Chinese bid posed a threat to national security and successfully steered an amendment into the energy bill specifically aimed at stalling the Cnooc bid for months.

Other legislators, like Byron L. Dorgan, a Democratic senator from North Dakota, said they opposed Cnooc because China's energy sector did not operate in a free market. That - and other measures considered by Congress - convinced Cnooc that it had no chance of successfully completing its takeover.

"What this misguided policy did was to say the United States will not advocate fair trade when it comes to American assets," said David L. Goldwyn, a former assistant secretary of energy during the Clinton administration and the co-editor of "Energy and Security: Toward a New Foreign Policy Strategy."

"That may push China into a more competitive stance rather than a more cooperative one," he said.

Mr. Goldwyn also said it might undermine the United States when it requested more access for foreign investors to the nationalized oil sector of Saudi Arabia. The behavior of the United States, he said, is "a little hypocritical."

But for David J. O'Reilly, the chief executive of Chevron, the fight over Unocal will not sour his company's relations with Cnooc, a partner in offshore drilling in China. For him, the problem with the Cnooc bid for Unocal was its reliance on Chinese government financing, not political interference in Washington.

.................................

As a sign of the uneasiness felt in corporate America, most business leaders in the United States have been unusually quiet about the conflict, treading a cautious line between not alienating lawmakers in Washington and not appearing critical of China's intents.

Still, one executive summed up how some in the oil industry felt about political involvement. Lee R. Raymond, the chief executive of Exxon Mobil (http://www.nytimes.com/redirect/marketwatch/redirect.ctx?MW=http://custom.marketwatch.com/custom/nyt-com/html-companyprofile.asp&symb=XOM), said early in the takeover battle that it would be a "big mistake" for Congress to interfere with the Cnooc bid because it might backfire on American companies seeking to do business abroad. "If you start to put inefficiencies in the system, then all of us pay for that," Mr. Raymond said.

Jerome A. Cohen, a law professor specializing in China at New York University, said that once Chevron played the political card in Washington, it was hard for it to rein in its supporters. "Chevron itself is conflicted," Mr. Cohen said. "They have allowed themselves to get too far into the anti-China crowd."

So far, there is little to suggest that American companies have suffered. For one, China, in the wake of the Cnooc defeat, has adopted a low-key tone. And developing countries usually need major oil companies to develop their resources because they can bring both technological expertise as well as financing capital.

Unocal will provide a major boost to Chevron as big oil companies find it increasingly difficult to replace both reserves and production. The merged company will increase its proven reserves by 15 percent, to 13 billion barrels of oil-equivalent, and expand oil and gas production to three million barrels a day.

While its oil output has declined each year since 2000, Chevron expects the merger to raise production 6 percent a year from 2005 to 2009. More than 77 percent of Unocal's shareholders backed Chevron's bid.

In Washington, the issue of overseeing foreign acquisitions more vigorously will resurface as a proposal by Senator Richard C. Shelby, Republican of Alabama, that would give Congress the power to block a foreign takeover of American assets. That amendment, tucked in the military appropriations bill, is expected to be examined in the fall.

Currently, only the president can block a takeover on national security grounds, something that has happened only once - in 1990, when the first Bush administration blocked the sale of a Seattle-based airplane parts maker, Mamco Manufacturing, to a military-related agency of the Chinese government.

"There are going to be many residual effects in Congress," said Nancy McLernon, the deputy director of the Organization for International Investment, a business association that represents American subsidiaries of foreign companies. It did not represent Cnooc.

"The Bush administration breathed a big sigh of relief when Cnooc withdrew its offer but there's more to come that could change the cross-border M.& A. environment," she said, referring to mergers and acquisitions. "That's something the whole world will be watching."

Oil Hits Nearly $65 a Barrel, Putting Pressure on Stocks

By E.S. Browning Staff Reporter of THE WALL STREET JOURNAL August11,2005

After pushing to what would have been a new five-month high, the Dow Jones Industrial Average slipped on surging oil prices.

As high as 10719.41 about an hour after trading began, the Dow industrials finished down 21.26 points, or 0.20%, at 10594.41. The average has fallen 1.8% this year.

Stocks began the day with a surge toward their recent highs, based on strong profits at American International Group and on general optimism following strong quarterly profits from many companies. The Standard & Poor's 500-stock index came within three points of a four-year high.

Then some investors began to worry about oil, as well as higher interest rates. They decided to cash in some of their recent gains.

"The market was trading fairly well, close to its highs, and then oil shot up and took off, and the market started to slide," said Mark Donahoe, head of stock trading at Minneapolis brokerage house Piper Jaffray. "People are concerned about the impact on the overall economy. That's what really turned it."

.................................................. ..........

Crude-oil futures jumped $1.83 to $64.90, another high, although still below the inflation-adjusted record of $94.77 hit in 1980. A government report showed that gasoline supplies fell last week, stoking fears that refinery problems are restricting supplies. Reflecting the supply concerns, crude is up 49% this year and has hit a new high in five of the past eight trading sessions.

After the Federal Reserve raised interest rates again at its policy meeting Tuesday, many investors concluded that it will continue raising rates in the future, so that worries over rising rates could weigh on stocks in the months to come.

The S&P 500 fell 0.18%, or 2.25 points, to 1229.13, still up 1.4% this year. The Nasdaq Composite Index, with its many technology stocks, fell 0.75%, or 16.38 points, to 2157.81, now down 0.8% for 2005.

Outside the U.S., stocks advanced in dollar terms. The Dow Jones World Stock Index, excluding U.S. stocks, rose 1.5%, or 2.62 points, to 181.97.

In major U.S. market action:

Major stock indexes retreated. But on the New York Stock Exchange, where 1.67 billion shares traded, 1,908 stocks rose and just 1,384 fell.

Bond prices declined. The 10-year Treasury note fell 2/32, or 63 cents for each $1,000 invested, pushing the yield up to 4.398%. The 30-year bond was down 2/32 to yield 4.580%.

The dollar weakened. Late in New York, the currency traded at 110.73 yen, down from 111.99 yen, while the euro rose against the dollar to $1.2370 from $1.2369.

Japan's Current-Account Surplus Declines on Rising Oil Prices

By Stanley White DOW JONES NEWSWIRES August11,20056:47a.m.

TOKYO -- Japan's current-account surplus fell for the second straight month in June from the prior year, the government said Thursday, as rising prices for oil and other commodities inflated the bill for the country's imports.

The surplus in the current account, the broadest measure of Japan's trade with the rest of the world, fell 15.3% from the year earlier to Yen 1.087 trillion ($9.82 billion) before seasonal adjustment, data from the Ministry of Finance showed.

In May, Japan's current-account surplus fell 19.5% from the prior year, but it rose 5.2% from the year earlier in April.

The current account measures trade in goods, services, tourism and investment. It is calculated by determining the difference between Japan's income from foreign sources against payments on foreign obligations and excludes net capital investment.

Some economists say that Japan's current-account surplus may shrink more in months ahead, but this could be a positive sign as it shows the economy is relying less on exports and more on internal demand.

The trade surplus in June, which is a major component of the current-account surplus, fell 23.1% from the prior year to Yen 999 billion.

Imports for the month rose 13.1% to Yen 4.232 trillion, compared with a 3.7% rise in exports to Yen 5.231 trillion.

The bill for Japan's imports of oil soared 48.5% from a year earlier amid rising oil prices, according to Japan's merchandise trade balance released last month.

The merchandise trade balance measures goods that pass through customs, while the trade balance in the current account measures the flow of goods based on settled contracts.

In June, oil cost $49.40 a barrel, up 33% from the prior year, according to the Petroleum Association of Japan.

Japan's exports for the month rose due to higher shipments of steel and automobiles, earlier data from Japan's merchandise trade balance showed.

For the first half of this year, Japan's current-account surplus fell 8.9% from the same period a year earlier to Yen 8.752 trillion. The goods and services surplus in the six months to June fell 27% to Yen 3.913 trillion.

http://i3.photobucket.com/albums/y72/W_W/Forum/OilPrices.gif

Crude Oil Futures Rise Above $66 on U.S. Refinery Breakdowns
Aug. 12 (Bloomberg) -- Crude oil rose above $66 a barrel for the first time after a fire at a Sunoco Inc. pipeline in Texas and a power failure at ConocoPhillips's Illinois refinery raised concern about shortages in U.S. fuel supplies.

``The U.S. refineries have had an abnormal amount of breakdowns over the last week or two,'' said Kurt Barrow, an energy consultant at Purvin & Gertz Inc. in Singapore. ``Part of that is due to the fact they're being run very hard.''

Crude oil for September delivery rose as much as 31 cents, or 0.5 percent, to $66.11 a barrel, the highest for the contract closest to expiration since trading began in 1983 on the New York Mercantile Exchange. It was at $65.95 at 8:09 a.m. London time in electronic trading.

Oil prices may rise further next week as demand for gasoline and other fuels increases, a Bloomberg survey of 55 analysts and strategists showed. Global petroleum product use, including gasoline, will rise 2 percent, or 1.6 million barrels a day, this year, the International Energy Agency said yesterday.

Gasoline for September delivery rose as much as 1.32 cents, or 0.7 percent, to $1.963 a gallon, the highest since the contract began trading in 1984. Heating oil rose as much as 1.23 cents, or 0.7 percent, to a record $1.9108 a gallon. It was last at $1.9035.

The disruptions at Sunoco and ConocoPhillips, the largest U.S. refiner, are among at least 14 reported since July 20. Shutdowns and rising demand left U.S. gasoline inventories 2.5 percent lower than a year ago, the Energy Department said Aug. 10.

`Rash of Problems'

``It's more the refinery issues than anything else'' that are driving oil prices, said Mike Armbruster, co-founder of Altavest Worldwide Trading Inc. in Laguna Hills, California. ``There's been a rash of problems lately.'

Oil prices today are 45 percent higher than a year ago, having gained 36 percent the past three months on concern refiners would strain to meet summer gasoline demand and store heating fuel for the Northern Hemisphere winter.

Brent crude oil for September settlement was up 9 cents at $65.47 a barrel on London's International Petroleum Exchange.

Prices also gained after two hurricanes and a tropical storm disrupted supplies from the Gulf of Mexico last month.

Crude oil yesterday rose 90 cents, or 1.4 percent, to close at $65.80 after the International Energy Agency reduced its estimate of output by Russia and other non-OPEC producers. It had risen as high as $66.

ConocoPhillips

ConocoPhillips, the largest U.S. refiner, said a power cut shut some units at its Wood River plant, its largest, and it was ``working to regain normal operations.'' The plant, which can process 306,000 barrels a day, had a fire in a processing unit after the power failure, the Wood River Fire Department said.

Sunoco, the largest refiner in the U.S. Northeast, said yesterday the pipeline near Lufkin caught fire after being ruptured by workers. The pipeline, operated by one of its units, carries crude from Nederland, near the Gulf of Mexico, to Longview, Texas.

Units at refineries run by Chevron Corp., BP Plc, Valero Energy Corp., Exxon Mobil Corp. and Murphy Oil Corp. also had unplanned shutdowns in recent weeks.

Refiners are straining to meet gasoline demand, which in the four weeks ended Aug. 5 was up 1.4 percent from a year earlier. Increased consumption runs through the Labor Day holiday on Sept. 5, a period when Americans take summer vacations.

Gasoline Demand

.................................................. ............

U.S. gasoline inventories fell 2.1 million barrels to 203.1 million last week, the lowest since November, and their sixth straight decline, the Energy Department said Aug. 10.

Oil prices may not weaken with the end of the driving season, Altavest's Armbruster said. Traders are concerned some U.S. refiners are planning winter shutdowns to retool their plants to comply with new product specifications effective from the start of 2006, he said.

The IEA cut its forecast for non-OPEC oil production by about 200,000 barrels a day, prompted by shutdowns in the Gulf of Mexico and the North Sea. Citigroup Inc., the world's largest financial- services company, raised its oil-price forecasts for the third and fourth quarters to $60 a barrel, saying there is no supply cushion.

Demand Peak

Global demand will peak at an average 85.9 million barrels a day in the fourth quarter, the Paris-based IEA said yesterday, unchanged from its forecast a month earlier. Still, the Organization of Petroleum Exporting Countries will need to pump 29.2 million barrels a day, the IEA said, 300,000 barrels more than its forecast previously. OPEC is pumping 30.4 million barrels a day, the group said in a statement Aug. 9.

Spare oil production capacity amounts to 2 percent of demand, down from 5 percent, which existed for much of the last 10 years, according to the Citigroup report.

To contact the reporter on this story:
Will Kennedy in Singapore at wkennedy3@bloomberg.net

Oil May Rise for a Fifth Week on Demand, Survey Shows (Update3)
Aug. 12 (Bloomberg) -- Crude oil may climb for a fifth straight week, its longest run of gains since March, as increased fuel demand saps stockpiles and pushes the price to a record, a Bloomberg survey showed.

Thirty-eight of 69 analysts and strategists surveyed, or 55 percent, said oil will gain next week. Twenty-four, or 35 percent, said prices will fall and seven forecast little change.

Global petroleum product use will rise 2 percent, or 1.6 million barrels a day, this year, the International Energy Agency said in a report yesterday. The agency also cut its 2005 non-OPEC supply forecast by about 200,000 barrels a day. Oil in New York rose above $66 a barrel for the first time today.

``Demand growth is likely to accelerate,'' said Dariusz Kowalczyk, a senior investment strategist at CFC Securities Ltd. in Hong Kong. ``GDP growth is picking up in the U.S., Eurozone and Japan.''

Crude oil for September delivery on the New York Mercantile Exchange added 8 cents, or 0.1 percent, to $65.88 a barrel at 11:14 a.m. in London, after earlier climbing to a record $66.13, the highest for the contract nearest expiry since trading began in 1983. The price has surged 45 percent in the past year.

Futures gained $3.49, or 5.6 percent, to $65.80 a barrel, the highest closing price on Nymex in the four days through yesterday.

Last week, 24 of 48 respondents said oil would fall. Nineteen of the past 32 surveys have correctly forecast the market's direction.

Demand Growth

The IEA said oil prices above $60 a barrel have done little to hurt economic growth or world oil demand so far. China's oil consumption is expected to rise 4.9 percent to 6.75 million barrels a day this year, and 7.5 percent in 2006, the report said. China is the biggest oil consumer after the U.S.

The U.S. economy may grow at a 4.1 percent annual pace this quarter, according to the median estimate of economists surveyed by Bloomberg. The economy expanded at a 3.4 percent rate from April through June and has been growing faster than other major economies.

Europe's economy may expand at the fastest pace in almost two years by the end of 2005 as a weakening euro buoys exports, the European Commission said yesterday. The economy of the dozen nations sharing the euro will probably expand about 0.6 percent in the fourth quarter and 0.4 percent in the third, the Brussels-based commission said.

OPEC Production
.................................................. ..........

OPEC, which produces more than a third of the world's oil, increased output by 285,000 barrels a day to an average 29.6 million last month, the IEA said. The group had less than 2 million barrels a day of spare production capacity in July, the bulk in Saudi Arabia, according to Bloomberg estimates.

OPEC raised its official output ceiling by 500,000 barrels to 28 million barrels a day on July 1.

The Arab oil embargo in 1973 prompted a surge in prices the following year. The Iranian revolution of 1979 and the country's war against Iraq in the 1980s sent the cost of a barrel for U.S. refiners to $35.24 in 1981, according to the Energy Department. That's about $75 in today's dollars.

``It's misleading to draw a comparison between what is happening now and what happened in 1973 and 1974,'' said Simon Hayley, senior international economist at Capital Economics in London. ``Even if the price was the same in real terms, industrialized economies aren't as dependent on oil as they used to be. If we got into three-figure oil prices, that might start to have an impact'' on the world economy.

Gasoline Stockpiles

Oil futures surged after an Energy Department report on Aug. 10 showed that refinery shutdowns reduced gasoline stockpiles. Supplies of the motor fuel fell 2.1 million barrels, or 1 percent, to 203 million, the lowest since November. Consumption was up 1.4 percent in the four weeks ended Aug. 5 from a year earlier, according to the department.

Refiners operated at 95 percent of capacity, down 0.8 percentage point from the previous week, the report showed. Units at refineries run by Chevron Corp., BP Plc, Valero Energy Corp., Exxon Mobil Corp. and Sunoco Inc. have had unplanned shutdowns in recent weeks.

The decline in motor fuel supplies also pushed gasoline futures and pump prices to records.

`Supply Threats'

``The market remains preoccupied with supply threats and signs that U.S. demand has not yet dissipated as a result of high prices,'' said Marshall Steeves, an analyst with Refco Inc. in New York.

Crude-oil stockpiles rose 2.8 million barrels to 320.8 million last week, the Energy Department report showed. Imports jumped an average 101,000 barrels a day to 11.06 million, the second-highest ever. Some analysts said that rising crude-oil imports will lead to further inventory increases and reduce prices.

The U.S. consumes 25 percent of the world's crude oil and more than half of that is used to make gasoline.

``High imports could help boost petroleum inventories for a second consecutive week,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``On the natural gas side of the equation, cooler weather this week may allow for a slightly greater inventory injection to show up next week. Both of these factors could be bearish for prices.''

High natural gas prices have helped support crude oil. Some factories and power plants can change from gas to oil-based fuels depending on cost. Natural gas rose to a 29-month high yesterday on concern that heat in the U.S. will cut the pace at which utilities store the fuel for winter.

Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE FALL NEUTRAL
3824 7

To contact the reporters on this story:Mark Shenk in New York at mshenk1@bloomberg.net; Will Kennedy in Singapore at wkennedy3@bloomberg.net.Last Updated: August 12, 2005 06:17 EDT

[The_Technician]

Do you know it costs $4/bbl of oil to get it out of the ground and put it in a barrel (Bill O'Reilly).....now where is that other $59/bbl going???

I think there is a bit of profit taken here.....15 times the cost....



:dude:

[Show-me]

The Technician wrote:
Do you know it costs $4/bbl of oil to get it out of the ground and put it in a barrel (Bill O'Reilly).....now where is that other $59/bbl going???

I think there is a bit of profit taken here.....15 times the cost....



:dude:

Preach’n to the choir!!! Here’s a link with some killer graph’s. Funny how the oil companies where make’n money when oil was $15 - $35 a barrel. Boy are they make’n the money now!!!!! How can they not be? Got roll with it!!!

http://www.wtrg.com/prices.htm

[JohnnieB1]

I think $4/bbl to lift or get the oil out of the ground may be a reasonable number for mid east oil where all you have to do is punch a somewhat shallow hole, stick a straw in the ground and suck it out, but for theUS offshore $4/bbl is to low.

Offshore US produces upwards of 30% of toal US oil and 25% of total US gas. To calculate the lifting costs you need to factor in the very high investment a company makes to acquire a lease, the $ they spend to comply with extensive regulations, and then they need to drill and produce. A significant and growing % of US offshore production is coming from deepwater Gulf areas. This is water depths greater then 1,000 ft, sometimes much greater. Exploration is taking place today in water depths exceeding 11,000 ft or 2 miles. The costs here are much higher. I am not saying that big oil is not making huge profits today, but it costs them in select areas way more then $4/bbl to get it out of the ground.............

[Show-me]

Right again JonnieB1!!! That’s why our oil companies likey the Arab oil. That’s why I like the Arab oil!!! Low recovery cost, cheap labor, big profits. Save our American wells for when the price per barrel is much higher. Makes good business sense. Buy the cheaper Arab and Venezuelan oil to refine first.

[Show-me]

I did read a article that due to the new light shed on increased oil consumption some counties are trying to set limits on what they export. Seem that their citizens are getting concerned that exporting all of their natural resources will come back to haunt them. So could we start seeing some countries closing off the taps a little in order to save some back. Natural resources are limited and valuable only if you have them. One country mentioned was Canadian natural gas. Coal is king baby. Arch Coal is spinning off a new division that is producing just low sulfur coal. Most of those new Power Plants built in the last 5 years where Natural Gas. Some coal fired plants were switched over to LNG because it was cheaper and less EPA concerns. Will we be seeing a shift back to COAL?

Check out this link about T. Boone Pickens. He likes the COAL!!!

http://moneycentral.msn.com/content/CNBCTV/Articles/Dispatches/P114088.asp

[ou81200]

I think those little countries are too greedy not to sell their product. Besides, if we don't get it from one country, we'll just get ot from another.

Question---- How would OPEC react to one of their countries limiting oil output???

[Show-me]

It's got to get really bad first and we arn't close to really bad yet. Point is some of them are thinking about it. Self-preservation the thing that war's are made of.

[Quips]

Just recently the both the state house and senate in Florida passed resolutions that would forbid driling for oil off the coast. A few federal reps also supported that measure.

It just goes to show you that many want inexpensive gasoline, and want it on there own terms ... usually that means without any compromise or sacrifice on there own part. And not that it matters, but the Florida state house and senate are predominently Republican as far as politics goes.

Chances are the cost of oil/gasoline has not hurt the state's tourist industry which centers around the beaches and the Orlando metro area. I could see the market falling if that were the case, but it seemed to fall mostly on the feedback about retail sales, Walmart, etc.

Back to school retail sales will be up in August ... and that will be reported in September IMHO. The September market, bucking history will be up ... just like the January market bucked history being down. By September fuel forecasts should be clearer as well.

[tsptalk]

I've learned to respect these parabolic moves. I expected oil to pullback and stay close to the $35 areaback when it started to go over $40. Go figure.

It's like the Nasdaq of 1999. Bubble, overbought, extended, you name it, was written all over that index. When it went from 2500 to 3000 bymid-1999 I was getting pretty defensive on stocks. Of course by early 2000 it hit 5000!! Crazy. Sometimes you just have to let these things run even if it goes against conventional wisdom. But when it starts to fall, look out.

I still think we'll see $35 or $40 oil again some day. But that doesn't mean it can't hit 70, 80, 90 first. I sure hope not. It's easierto do rearview mirror analysis but remember the Naz came back to1100 by 2002. What goes up ...

[coolhand]

While we're on the subject...

http://tinyurl.com/8gdgl

[The_Technician]

I think its important to keep clear in you minds :Dthat energy costs are like any other cost in manufacturing and transporting product to market.....it has to be low to make the product cost effective so that it can be sold at an affordable price......anytime a cost gets outtahand, say like labor,energy...etc, that cost has to be dealt with or else the manufacturer goes out of business..:^....in this case with energy being the higher cost factor, a recession will happen because of the delay in reducing the cost of energy.....and the manufacturer may still go out of business if something isn't done about the higher energy cost right away......:shock:

Of course if you are depending on only one source for your product then you have to pay the high costs.....therefore monopolies are not favorable.....

:dude:

[Birchtree]

I would say perhaps 60% of the outlanders in the state of Vermont own wood stoves that they purchased in the 1970s. They will have no problem staying warm this winter at a reasonable cost. Soon it will become cost effective to return to waste to energy plants. GE is in the process of purchasing their second pipeline that can eventually transport coal slurry. All the anti-progress people(liberals) will soon be riding their bicycles to work - finally doing their part to help the energy problem besides yapping. Me, I'm trying to figure out where I can invest in the coming dawn of nuclear power - cement maybe.

[The_Technician]

I was pondering last night, what would happen if you took the spent fuel and dumped it into a volcano????

What does a melt down of spent nuclear material do to it.....decompose, irradiate....just what does happen to the material while it melts down.....??

Anybody know....lets call this "The TechniciansQuestion"...

Waiting for answers.....

:dude:

[Birchtree]

What do the French do with theirs - give it to Iran?I think France may be close to 80% nuclear power - with no problems to date. We are 30 years behind the curve on nuclear power. Most university engineering programs have downsized and will need to start growing again or the jobs will go to imported North Koreans.

Birchtree wrote:
All the anti-progress people(liberals) will soon be riding their bicycles to work - finally doing their part to help the energy problem besides yapping. Me, I'm trying to figure out where I can invest in the coming dawn of nuclear power - cement maybe. http://i3.photobucket.com/albums/y72/W_W/Music/violin_notes_fly_out_sm_clr.gif http://i3.photobucket.com/albums/y72/W_W/Smileys%20Animated/D_02BA12.gif

[Birchtree]

WW,

Just call me Johnny Depp cry baby.

[mlk_man]

I think someone is feeling a little envious. ...............:?

[smine]

Ewwweee, Milk! Wherecha' get the cute little lamb? WW give it to you? It's sure is a cutie.:^

[mlk_man]

smine wrote:
Ewwweee, Milk! Wherecha' get the cute little lamb? WW give it to you? It's sure is a cutie.:^Uhh, no she didn't. I did itwit my own twolittlehands............:^ You can pet him if your nice......................;)

[Spaf]

I had a new fuel gauge installed in my CAR. It just made more sense!

Spaf

[Quips]

From the NY Times Aug 23.

Televison evagelist and founder of the 700 Club PatRobertson has set off an international firestorm with his comments on his television broadcast that the United States should kill Venezuelan president Hugo Chavez, a leftist who sits atop the largest oil reserves outside the Middle East.

"If he thinks we're trying to assassinate him, I think that we really ought to go ahead and do it Mr. Robertson said on his program, "The 700 Club" on Monday. "It's a whole lot cheaper than starting a war. And I don't think any oil shipments will stop."

[It's a whole lot cheaper than starting a war ... okay, I'll buy that ... and a lot less bloody.]


Some of Mr. Robertson's conservative Christian allies distanced themselves from his comments. Rev. Rob Schenck, president of the National Clergy Council in Washington, released a statement calling on Mr. Robertson to "immediately apologize, retract his statement and clarify what the Bible and Christianity teaches about the permissibility of taking human life outside of law."

The Rev. Richard Cizik of the National Association of Evangelicals said in an interview that he and "most evangelical leaders" would disassociate themselves from such "unfortunate and particularly irresponsible" comments.

But other conservative Christian organizations remained silent, with leaders at the Traditional Values Coalition, the Family Research Council and the Christian Coalition saying through spokesmen that they were too busy to comment.

[vectorman]

http://biz.yahoo.com/ap/050824/oil_prices.html?.v=4

oil.....oil.....oil.....oil.....but good news over seas.....

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh6857 8_2005-08-24_06-16-50_t44366_newsml

[Quips]

Venezuela's Chavez Squeezes Oil Companies With Taxes, Raids
Aug. 24 (Bloomberg) -- On July 14 in the western city of Maracaibo, Venezuelan government tax auditors and a prosecutor went to the offices of Chevron Corp., the second-largest U.S. oil company.

They seized boxes of records to build a case that San Ramon, California-based Chevron and 21 other energy companies owe Venezuela $3 billion in back taxes. The raid is part of President Hugo Chavez's push to squeeze more money out of foreign companies that want to pump oil from the world's fifth-largest petroleum exporter.

Since October 2004, he has raised heavy-oil royalty fees to as high as 30 percent from 1 percent, begun paying for some services in nonconvertible bolivares instead of U.S. dollars, and ordered oil well contracts converted into government-controlled joint ventures.

Chavez, 51, wants to use the revenue to pay for homes, clinics and schools for the 58 percent of Venezuelan families who live on less than $200 a month.

Since taking office in February 1999, Chavez has embarked on a socialist revolution: seizing ranches to hand over to the poor and starting a TV news network with promotional ads featuring a swastika painted on a U.S. flag.

Chavez says he's using oil money to bankroll a quest to become Latin America's leader against U.S.-style capitalism, and in a May 4 speech, he said ``Being rich is bad'' and ``Jesus Christ was a socialist.''

Friend of Castro

Chavez, a close friend of Fidel Castro, sends crude to Cuba in exchange for doctors to staff 3,000 neighborhood clinics. In June, he pledged subsidized oil for poor Caribbean nations such as Grenada.

Chevron and its competitors haven't been scared off by the new rules or Chavez's fiery rhetoric because the country has the largest reserves in the Western Hemisphere.

The oil companies want to invest $30 billion in Venezuela, which is the fourth-largest supplier of crude to the U.S., according to the Venezuelan Hydrocarbons Association.

Venezuela is also attractive because Chavez is more open to foreign investment than other countries with untapped oil supplies such as Mexico and Saudi Arabia.

In an interview, Chavez said all companies are welcome in his country. ``Foreign companies have been here for the last century exploiting oil and gas, and they'll have all the space they've been able to have so far,'' he says. ``It's just that they will have to pay the royalties, they will have to pay the income tax. If they don't, we will go after them.''

The Prize

True to Chavez's word, Venezuela's tax agency stated on Aug. 11 that it's seeking to attach more than 280 billion bolivares ($131 million) in assets from The Hague-based Royal Dutch Shell Plc in a dispute over what the country says is unpaid back taxes. Shell Spokeswoman Bettina Steinhold declined to comment.

The prize in Venezuela is the tropical flatlands north of the Orinoco River, beneath which, according to Chavez, lie 230 billion barrels of heavy crude, one of the largest oil deposits in the world.

Chevron and Repsol YPF SA, Spain's biggest oil company, plan to seek approval for a $6 billion expansion in the Orinoco Belt, as the area is known. Shell, Europe's second-biggest oil company, proposes a $5 billion expansion there.

``The oil industry is a long-term industry, and you can't have an attitude of `in and out,''' says Ali Moshiri, 52, Chevron's Latin America exploration and development chief. ``We have to go where the oil is.''

Boosting Production

Chavez, who has used his clout as leader of the third- largest member of the Organization of Petroleum Exporting Countries to curb Venezuela's output by 20 percent since taking office, now says he wants to boost production.

Most of the decline came from the state-owned producer, Petroleos de Venezuela SA, where Chavez fired half the workforce to break a 2002-2003 strike aimed at his ouster. Daily output at PDVSA has tumbled to about 2 million barrels from 2.92 million barrels in 1998.

Chevron's oil production is part of a joint venture with PDVSA.

Foreign oil companies took up the slack, doubling their production to about 1.12 million barrels a day as of last year. Now, Chavez says he wants to attract $10 billion more from foreign oil companies to help boost Venezuela's total oil production to 5 million barrels a day by 2009.

``This government is your ally,'' Chavez told foreign oil executives in March. ``We are not chasing anyone away from Venezuela.''

`Mr. Danger'

At the same time, Chavez claimed that the Bush administration was trying to force him to commit suicide and threatened to cut off exports to the U.S. if he were to meet an untimely death.

Chavez, who refers to President George W. Bush as ``Mr. Danger,'' said in a June 5 speech that the U.S. is trying to install a global dictatorship. Secretary of State Condoleezza Rice, in January, described Chavez as a ``negative force'' in the region.

Yesterday, television evangelist Pat Robertson told viewers of ``The 700 Club'' program that the U.S. should assassinate Chavez to stop him from becoming a ``launching pad for communists.''

Venezuelan Vice President Jose Vicente Rangel responded by saying Robertson's remarks were ``criminal.'' U.S. State Department spokesman Sean McCormack said at a press briefing that Robertson's views ``do not represent the policy of the United States.''

`Unilateral Changes'

Chavez, a former army lieutenant colonel who was jailed for trying to overthrow the government in 1992, risks pushing too hard on the foreign oil companies, says Jason Todd, a Chicago- based analyst at credit ratings company Fitch Ratings.

``We have seen a lot of unilateral changes made by the government, and those things raise concerns,'' Todd says of Chavez's oil policy. ``That can lead to lack of investment.''

All Chavez has to do is look to Russia, the world's second- largest oil exporter, to see the risks of demanding too much from foreign investors, Todd says.

Production in Russia in 2005 is expected to rise at the slowest pace in six years, after President Vladimir Putin raised taxes on oil sales as high as 90 percent.

Though Chavez says he wants more foreign oil money, his policies have harmed some of the companies that could supply it. In October 2004, the government raised royalties on four heavy- oil production projects along the Orinoco Belt to 16.67 percent from 1 percent and slapped a 30 percent royalty on excess output.

`Sanctity of Contracts'

Six months later, the government raised taxes on companies that run 32 oil fields for PDVSA to 50 percent from 34 percent. Minister of Energy and Oil Rafael Ramirez, 42, gave those 22 companies until year-end to convert the oilfield contracts into joint ventures that are 51 percent owned by PDVSA.

Exxon Mobil Corp., the world's largest publicly traded oil company, faces higher royalties on its Cerro Negro heavy-oil field in the Orinoco Belt, which produces 120,000 barrels of crude per day.

Henry Hubble, vice president of investor relations at Irving, Texas-based Exxon Mobil, said on a July 28 investor conference call that the company is negotiating with Venezuelan officials to keep the royalty terms of its written agreements. ``We insist on the sanctity of contracts,'' he says.

Chavez's government hasn't approved any major expansion by foreign oil companies: Some 80 percent of the $26 billion of private oil investment in Venezuela was made before Chavez took office.

Dwindling Reserves

Houston-based ConocoPhillips, the largest U.S. oil refiner, needs to replace dwindling reserves, lock in future profit and assure supplies.

Unless new reserves are tapped in countries like Venezuela in the next 15 years, global oil output won't keep pace with demand, according to a report by New York-based securities firm Sanford C. Bernstein & Co.

The report forecasts that demand for oil will grow 1.8 percent a year through 2020 to 102.7 million barrels a day. Global oil production capacity will be 102.1 million barrels a day, the July 15 report says.

Concern about future supply has helped push crude oil prices up more than fivefold to a record $67.10 a barrel on Aug. 12 from $12.28 on Feb. 2, 1999, when Chavez was sworn in as president.

Chavez's Venezuela is one of the few major oil producers that allow foreign investment; Saudi Arabia allows only its state oil company to pump crude.

Murky Waters

And Venezuela has been more open than other countries in Latin America such as Mexico, which bars foreign companies from exploiting the second-biggest oil reserves in Latin America.

Chavez says he wants to expand even further by converting 32 agreements to run wells into ventures, which would be 49 percent owned by private oil companies. ``That's the uniqueness of Venezuela,'' Chevron's Moshiri says. ``It opened up, and we hope it will continue to do that.''

Oil companies such as Shell have acquiesced to Chavez's demands. In December, Shell started renegotiating its oilfield agreement near the murky waters of Lake Maracaibo, where 10,000 wells tap into 40 percent of Venezuela's proven crude oil reserves.

On July 14, the government ordered Shell, whose 90 years of working in Venezuela includes having its wells nationalized in 1975, to pay $131 million of back taxes. Shell says it has paid all of its taxes.

`I Can't Imagine'

Sean Rooney, Shell's president in Venezuela, says the country is still a good place for the company. ``I can't imagine a scenario where we would ever leave, where it would ever be so discouraging,'' says Rooney, 45.

``The resource is too significant, and the potential is too great,'' he says.

Norway's state-run Statoil ASA, Paris-based Total SA and Chevron have been the hardest hit by Chavez's new rules because they manage wells for PDVSA and are shareholders in the four heavy-crude production ventures in the Orinoco belt.

Statoil, Total and ConocoPhillips may have to pay $320 million of back taxes for their heavy-oil ventures in the Orinoco belt, according to Oil Minister Ramirez.

Chavez is also considering a reduction in Venezuela's dependence on oil sales to the U.S., which accounts for about 60 percent of the nation's crude exports. Chavez signed agreements to boost oil sales to Argentina, Brazil, China, India, Paraguay and Uruguay.

Ease U.S. Sales

He also proposed building a pipeline to Pacific Ocean ports in Colombia to ship more crude to China. The U.S. imports 15 percent of its crude oil from Venezuela, which is just a four- to five-day tanker trip from Texas refineries.

Chavez has also said he'd like to ease sales to the U.S. market by selling some assets of Citgo Petroleum Corp., the Houston-based refinery and gas station chain that PDVSA owns. Citgo has four oil refineries, two asphalt plants and 13,500 gas stations in the U.S.

Chavez's tough stance is part of Venezuela's tradition of trying to ensure it receives a fair price for crude. When U.S. President Dwight Eisenhower created import quotas for crude oil in 1959, then Oil Minister Perez Alfonso flew to Washington to lobby against the quotas.

Eisenhower and other administration officials refused to see him. Alfonso then flew to Cairo for the Arab Oil Congress, where he met with officials from Iran, Iraq, Kuwait and Saudi Arabia. Those talks led to the founding of OPEC in 1960.

State Oil Monopoly

In 1975, Venezuelan President Carlos Andres Perez nationalized the oil industry, paying companies such as Shell for oil wells, refineries, terminals and gas stations. PDVSA, formed as the state oil monopoly after nationalization, began welcoming back private oil companies in 1992.

Now, PDVSA pays private companies that run 32 of its oil fields a fee for each barrel they pump above the levels of production from when the agreements began.

Chavez targeted PDVSA soon after taking office, accusing the company of recklessly boosting production so much it depressed oil prices. Chavez persuaded OPEC to adjust production to keep crude prices within a range of $22 to $28 a barrel at the time.

In January 1998, Venezuela was pumping about 3.4 million barrels a day, or 800,000 barrels more than its OPEC quota. By October 2000, seven months after OPEC adopted the price range, Venezuela was producing within its quota.

18 Cents a Gallon

In July, Venezuela pumped about 2.7 million barrels of crude a day, 523,000 barrels fewer than its OPEC quota, according to a Bloomberg survey of producers, oil companies and analysts.

Oil is a pervasive part of life in Venezuela, where gas stations don't even post the price because it is fixed at 18 cents per gallon. Revenue from crude exports funds half the government's budget, and oil prices have driven Venezuela's economy since the 1920s.

In the 1970s, as prices soared during the Arab oil embargo, the government overhauled Caracas with new elevated highways and public housing blocks. State airline Viasa chartered 747 jetliners to carry luggage back as Venezuelans increased their shopping trips to Miami.

Last year, as crude prices soared again, Venezuela's economy grew a record 17 percent, increasing consumer spending so that there were three-month waiting lists for new cars.

Chavez, born to schoolteacher parents in rural Berinas state, found his political calling after going to the country's Military Academy when he was 17 and seeking a career in baseball. Chavez rose through the ranks and in 1992 helped lead 15,000 soldiers in an attempted coup.

Two Years in Jail

Chavez was jailed for two years, and won a national following among Venezuelans fed up with government corruption with a televised speech justifying the coup attempt.

In 1998, Chavez won a landslide election victory by pledging a revolution that would use oil revenue to spread equality. Since taking office, Chavez has taken advantage of surging oil prices by boosting spending on programs for the poor to a projected $13 billion this year -- or almost half the national budget.

The programs have helped him survive an attempted coup and recall referendum.

PDVSA dispenses $4 billion a year for everything from cooperatives that make the red T-shirts Chavez supporters wear to monthly stipends for 700,000 people enrolled in adult education courses.

On some days, PDVSA's 13-floor concrete headquarters in Caracas draws scores of people seeking funds for social programs, known as missions.

Dealing With Katrina's Toll Hurricane Spawns Speculation About Outlook for Energy, Rates September1,20057:02p.m. WSJ

Don't Expect a Rate Pause Scott Patterson
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The federal-funds rate, the Fed's target short-term interest rate on overnight loans between banks, now stands at 3.5%. Futures on Wall Street indicate investors expect a rate of less than 4% by the end of the year, meaning they expect central bankers to pass on lifting rates at one of the Federal Open Market Committee's three remaining meetings for the year. A Thursday lunch between President Bush and Fed Chairman Alan Greenspan raised heads, even though the topic of the meeting wasn't disclosed.

Expectations for a pause are understandable. The impact on consumer spending from higher gasoline and home-heating expenses will rattle the economy on some level, economists say. Standard & Poor's cut its forecast for third-quarter growth by 0.5 percentage point to 3.5% due to fallout from Katrina.

Rate relief, though, might not be the best medicine. For starters, Washington's central bankers have a laser-like focus on inflation, and prices have surged following Katrina -- the Reuters-CRB Total Return Index, a benchmark for commodities, has risen more than 5% since last Friday, mostly because of a 30% surge in gasoline and an 18% jump in heating oil. But other commodities have risen, too: coffee is up 6% and sugar is up 4%. A pause in rate increases will only stoke inflation and potentially drive oil and gasoline prices even higher, says Bianco Research strategist Howard Simons, who thinks the Fed should pause anyway. S&P doesn't expect the Fed to continue pause before reaching a fed-funds rate of 4.25% in early 2006, said Beth Ann Bovino, a senior economist at S&P.

Jobs growth is another factor. There is a good chance employment will increase in the long term -- fanning inflation -- as a result of a massive rebuilding effort in the stricken Gulf Coast region, says Dick Green, president of Briefing.com.

One corner of the financial universe, says James Paulsen, chief investment strategist at Wells Capital Management, may give the Fed room to keep raising rates: the bond market. Treasurys have rallied this week as investors fled to safer investments, sending yields lower and pushing down rates on consumer instruments such as credit cards and mortgages, which are linked to yields. "The bond market could be doing [the Fed's] job for them," Mr. Paulsen says.

Lower yields could give the housing market a second (or third or fourth) wind, encouraging home buyers to jump into the market and refinance existing mortgages to generate some spending cash, says Barry Ritholtz, chief market strategist at Maxim Group. "We could see a whole new wave of refinancing, and that's really been the key driver to the economy," he said. Meanwhile, home building eventually will jump in the South when the massive reconstruction gets under way. If consumer spending and the housing market remain robust, there will be little reason for the Fed to take a breather.

The Crude Reality

David Gaffen: Wall Street's fixation on crude-oil prices has only intensified in the wake of Hurricane Katrina. Nymex futures stabilized after crossing $70 a barrel when Bush administration said Wednesday it was prepared to release crude from the Strategic Petroleum Reserve. But adding to crude-oil inventories won't alleviate the country's energy crunch.

Companies need to refine crude to turn it into gasoline, heating oil, jet fuel and other petroleum products, and more than 10% of U.S. refining capacity is situated in the Gulf of Mexico. Refineries elsewhere in the U.S. already are operating at full tilt. Some refineries have brought operations back online in the Gulf, while others reported only minimal damage. But if there is extensive pipeline damage in the Gulf, then those companies can't deliver refined products. Additional crude just becomes "kind of an unusable toxic product," says Tom Kloza, chief oil analyst at the Oil Price Information Service.

The hit to refinery operations in the region could actually lessen short-term demand for crude, depressing futures prices, while rapidly lifting prices for refined products. This week, gasoline futures on Nymex are up 30% and heating oil is up 17%; crude rose only 5%. "With a more substantial problem here, products are going to [trade] at a premium to crude," said Phil Flynn, senior market analyst at Alaron Trading.

Before Katrina, U.S. gasoline inventories were already at low levels -- about 20.5 days of supply, down 12% from a year earlier -- and they are expected to show a greater decline when the U.S. Energy Information Administration releases its weekly inventory report Wednesday. Already, there have been reports of filling stations in Georgia and Arkansas running out of fuel. During the energy crisis in 1979, consumers rushed to top off their tanks, spawning long lines at the pump and supply outages at gas stations. "It was putting that extra $5 on average in the car and keeping it there for several weeks that really created the shortage and pushed the prices up," says James L. Williams, energy economist at WTRG Economics in London, Ark. Former presidents Clinton and Bush on Thursday urged Americans to drive only when necessary, and analysts debated whether the U.S. should create a strategic gasoline reserve.

The recent shock of higher gasoline prices could prod refiners to ramp up gasoline output at the expense of other petroleum products, potentially denting heating-oil inventories just when the industry normally would prepare to shift production ahead of the winter heating season. Right now, heating-oil inventories are at about 135 million barrels, above the average range, according to the EIA. But the U.S. "could end up with a lot more gasoline and too little heating oil," Mr. Williams said. Even though heating oil represents a small amount of the energy needs for U.S. consumers to warm their homes only -- 7.5% of U.S. consumers use heating oil -- the weekly reports will be closely watched by Wall Street. "We built up supplies of heating oil at the expense of gasoline , and now, here we go around again," Mr. Flynn said.

Refinery problems, meanwhile, could end up lifting prices in unforeseen markets. Crude is refined into petroleum-based chemicals such as rubber or polypropylene, which go into all sorts of consumer products like food packaging, homes and cars. On the London Metals Exchange, the September polypropylene contract settled up $50 to $1,230 a metric ton Wednesday.

It is still unclear how long it will take before lost supply is replaced and refining facilities recover, the EIA said Wednesday. Mark Routt, senior consultant at Energy Security Analysis Inc., says crude may have hit its peak already. If higher prices end up sapping demand, the same could happen for other products, too, he says. The front-month gasoline contract closed at $2.409 Thursday on the Nymex; the December contract was at $2.02. "The market seems to think by December, things will start to get back to normal," Mr. Flynn said.


[i]Highlight and copy to Word for larger font.

[grandma]

Greenspan & gas:

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=46099

Quips wrote:
From the NY Times Aug 23.

Some of Mr. Robertson's conservative Christian allies distanced themselves from his comments. Rev. Rob Schenck, president of the National Clergy Council in Washington, released a statement calling on Mr. Robertson to "immediately apologize, retract his statement and clarify what the Bible and Christianity teaches about the permissibility of taking human life outside of law."
This guy also denounced Billy Graham.

http://www.michnews.com/cgi-bin/artman/exec/view.cgi/171/8580

Did Jayson Blaire write this at the NY Times?

[Quips]

It was from the NY Times, but I didn't include the by-line.

Sometimes I edit things I feel aren't pertenent. The reason why I included the part about some taking offense about Robertson's comments is because, as the blurb continues, "some were too busy to comment". In essence, given tacit approval. So one reaction balanced the other.

I thot that "too busy to comment" part was funny tho.