G.U.N. Oil Report

The the typical file-and-copy procedure of most news reports, an article from the Associated Press cluttered up over 600 positions over the wires today with the exact same words. This time the news is closer to my home, covering MATT: the Mobile Automotive Technology Testbed. Argonne (one of the U.S. Department of Energy’s largest research centers) Labs isn’t too far from my home here in Illinois, a lab that is one of a dozen around the country working on new energy sources to energize our cars. “We are the Saudi Arabia of coal, because we’ve got all the coal we want. We’re the Saudi Arabia of shale oil, tar sands, biofuels . . . Solar, wind” says Don Hillebrand, the directory of the Center for Transportation Research at Argonne. He believes the answer to the crude oil replacement will be a variety of newer technologies, not just one. ¹

We’re awaiting this Thursday when Venezuelan President Hugo Chavez will be hosting a meeting of OPE. Chavez believes that Venezuela’s crude-alternative reserves will become the leading oil source of the world for decades. Chavez is a proponent of nationalizing Venezuela’s largest industry — oil. One area in Venezuela, called the Faja, is a strip three times the size of Kuwait and is rumored to hold 1.2 trillion barrels of oil. ²

Previously reported here, Shell’s investment in the $5 billion Victoria’s Latrobe Valley is bringing the development closer to reality. The end goal is to have an efficient and profitable coal to diesel conversion facility which hopes to produce enough oil to cover the shortfalls in the Bass Strait oil fields. The plant can produce a profit if oil is selling above US$40. ³

The Star-Telegram has an interesting article covering the varying opinions regarding oil drilling in the U.S. and how it affects private property owners. More than 4,000 wells have been drilled since 1999 in the Barnett Shale region of Texas, well that are scattered amongst “hundreds of neighborhoods and dozens of towns.” Some residents in the article complain about the powerlessness they have in regards to the law putting oil companies ahead of residents, even on their own property. “Oil and gas drillers have held all the cards in Texas since at least the early 1940s, when a series of court decisions upheld the sovereignty of mineral rights over other property rights.” Here’s the proof of the power of resources over just land — for decades now private property is irrelevant if there are resources to be mined or extracted. In a free market we’d see property owners able to auction off rights to their land, or even not allow anyone on there (until a higher bid price might convince them of changing their minds). It is really terrible that property rights take second place to the power of government licensing of land to powerful lobbies. ⁴

MSNBC also has an article covering the Barnett Shale region, covering the new work that is available for those in the oil industry. They’re saying that the gas boom is interrupting retirement of workers in the industry — a sure sign that the supply of workers still needs to be met. Rather than complaining about the problems that the oil industry might create in their area, they should be embracing the new and profitable work that might be available for decades. The article talks about a bigger problem than just training or hiring new employees — the licensing and paperwork that comes with the need to be accepted by the local politicians in anything that makes money. ⁵

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