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Breakup of US Reminds Us of 1970s Texas Secession

The WSJ article about Russian professor Igor Panarin who is predicting the breakup of the United States in 2010 reminds us of the discussion in the 1970s about Texas' ability to secede from the union. =>Continue Reading

Environmental Dilemma of Low Oil Prices

Today's Sunday New York Times carried two columns in its Op-Ed section - one by Tom Friedman and the other by Art Laffer and Bob Inglis. Both columns dealt with the issue of emissions and energy prices, but through different approaches. Both columns reflected a certain degree of frustration about what was happening to the environmental and energy saving efforts in America due to weak oil prices. =>Continue Reading

Canada and Playing The Energy Card

We read The New York Times award-winning columnist Thomas Freedman's latest missive. He stated that the world was happy with the election of Sen. Obama, but they should show their support with troops, money and trade. =>Continue Reading

On the Cusp of the Restructuring of Energy Industry

After the meeting of the G7 finance ministers over the weekend and the agreement by major economic powers to undertake a rescue of the world's financial system, crude oil prices rose. But Tuesday, when more investors were back in the market, fears of the impact on economic activity from a major recession next year took hold and drove oil prices back down under $80 a barrel. Many investors may be thinking that $80 a barrel is the new base price, but if we have a significant decline in energy demand prices could head well below this new marker. =>Continue Reading

Oil Price Collapse Reflects Demand Forecast Cuts

Last Friday, crude oil futures prices dropped by $9 a barrel. This was the same day the International Energy Agency (IEA) announced revised estimates for oil demand for this year and next. It cut both forecasts due to weak global economic conditions stemming from the global credit crisis. =>Continue Reading

U.S. Oil Demand Falling Faster Than Thought

The U.S. Energy Information Administration (EIA) reported today that oil demand fell 8.5% between January and February this year. It also reported that gasoline consumption fell by 6.2%. Some of the decline is do to February being a shorter month, although 2008 was a leap year. =>Continue Reading

Oil Hits Record Price: Can That Be Sustained?

Today, crude oil futures prices hit an intraday record price of $105.97 per barrel, continuing the climbing price trend of the past several weeks. Oil is now well established beyond the old 1980 inflation-adjusted price achieved during the Iranian hostage crisis. So what's behind this recent price surge and is it sustainable? =>Continue Reading

OPEC Production Cut - A repeat of 2004 or the diaster of 1999

Seems Like Old Times Again – Oh No! For anyone who has been in or around, or involved in the energy business for very long has to feel more comfortable about current events. Why? Because OPEC is reacting in their conventional approach to the fall in oil prices by talking about cutting production. It is hard to believe that this situation last happened only two years ago. When it happened the last time, oil prices jumped 20% in a matter of days following OPEC’s announcement that it was going to cut its production. This time the talk produced little material price appreciation.

Maybe investors and analysts remember the last time we experienced OPEC producing full-out as oil demand fell. It was in late 1997. At that time, Thailand's currency, the Bhat, imploded in value taking down the country’s economy and eventually a number of neighboring economies. With the economic contraction and the collapse of the value of the currency, crude oil and refined product inventories were also emptied, making the fall in oil demand appear worse than it actually was. =>Continue Reading

Chevron Gulf of Mexico Discovery

Yesterday, The Wall Street Journal broke the story of a world scale oil discovery at the Jack field in the Walker Ridge area of the Gulf of Mexico. The field is in a trend estimated to contain between 3-15 billion barrels of oil. The upper end of this estimate would equate to 50% of existing U.S. oil reserves.

Chevron (50% ownership), along with partners Devon Energy (25%) and Norway's Statoil (25%), announced the test results of the Jack #2 well at 6,000 b/d. Estimates are that the field, once developed, would be able to produce 750,000 to 1 million b/d. Unfortunately, the timing of this maximum production is 6-8 years away. =>Continue Reading

Seismic Deal Takes France Full Circle

The deal for France's Compangie de Geophysique (CGG) to buy Veritas DGC for $3.1 billion and form the world's largest seismic company takes France full circle in the business.

The seismic industry measures the earth's subsurface with electric impulses to determine what rocks and fluids lie under ground. With that intelligence, geologists can interpret the potential that these rocks may contain oil and gas reserves.

Once a well is drilled and oil and gas is found, electric measurement devices are lowered into the hole to determine the amount and productive potential of the well.

Both of these measurements involve the use of electronics. The science of these technologies was created by two French brothers - Marcell and Conrad Schlumberger. Because the technologies were sufficiently different and offered unique business opportunities, the brothers established two companies - Schlumberger and CGG. As the pioneers of the industry, each has helped to evolve the respective technologies as major exploration tools. =>Continue Reading

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