Today’s oil news is pretty thin with most of the newsrags reporting that investors are sitting and waiting for the Fed report to gauge where future commodity prices will be heading.

We are seeing new discoveries of oil all over the Ugandan area, with 4 new reports surfacing very recently.¹ The Albertine region is possibly rich in crude and shale oil varities, and has seen much more attention from international companies in the past few years.

EnergyBulletin has an article towards their own Peak Oil theorists (”peaksters”) on how they can better sell their story to the public.² For me, I just want to see real economic backing to prove if we’re running out. I’ve watched the Gold to Oil ratio for nearly 10 years, now, and I’m not seeing the fears that many are pointing to. Sure, oil is expensive, but the dollar has quickly become worthless in my lifetime, and I’m not sure that we’re looking at a supply problem. There is a high demand for oil and a low demand for dollars, of course the price of oil will go up.

A U.S. Congressional panel said yesterday that Canada can give OPEC a run for the money in the oil business.³ From the article: Production from Canada’s oil sands region will put the nation in the top five producers of crude oil in the next 10 years, according to a report from the Joint Economic Committee, which examines economic policies and their impact. Canada is currently the seventh-biggest global oil producer, the report said. We’re seeing Canada’s stock market, the TSX, boom with the growth of gold and oil’s value on the world market. As the dollar price of oil goes up, the opportunities to extract new oil varieties such as shale and tar sands increases. My concern is that the price of oil is not significantly higher versus income levels compared to decades past, so will these new oil varieties really be profitable? The dollar is worth less, and it should require many more to actually process these alternative oil structures. I’ll be surprised if this is the going to be the time that shale and tar sands become profitable. The experts are telling us that most are profitable at US$60 per barrel, but that price is considering the dollar’s value from 5 years ago. Since the fall of the dollar of almost 50% in that time versus other currencies and commodities, it is possible that tar sands and shale oil might only be profitable at US$120 per barrel!

The new U.S. emissions regulations are already costing oil producers money as they have to revamp refineries again to attain the new standards for lower-emissions fuel. Suncor just invested nearly half a billion dollars into revamping their refinery in the Alberta region in Canada.⁴

I’ve been reading RIA Novosti a lot lately, the Russian News and Information Agency. Today’s article is titled Prospects of the dollar as oil currency⁵ Russia has always had a huge amount of oil to process and sell, but decades of communism always made this oil unprofitable on the world market. Now that Russia is starting to provide more semi-free market options for businesses, their oil industry is ready to explode on the market, but the petrodollar connection is one that keeps many countries from being able to get into the market on their own terms. Russia already holds enough petrodollars and reserve dollars and may not want more, especially with the dollars fast decline in value due to Bernanke’s overprinting of supply, continuing Greenspan’s decades of madness. RIA Novosti’s article covers many of the thoughts I’ve been having in recent years, and I believe it is worth taking the time to read (and comment on).

Instead of blaming themselves for allowing the Fed to go print-crazy on new money, the US Senate now wants to investigate higher prices by seeking parties to blame in the energy trade industry.⁶ While I believe speculation does tend to raise prices, it also tends to lower prices as well. We have to look at the supply of resources versus the supply of money. As long as the supply of money keeps going up (Federal Reserve-created inflation, as we’ve seen for 100 years), prices will always tend to go up as the value of the dollar keeps going down. There is no energy market collusion here, just a lot of military intrusion, currency value destruction, and usual power-tyranny being manipulated by those who can. The Senate has no one to look at but themselves, the Congress, the Executive branch and the Judicial branch that allows it all to continue without heeding the Constitution.

Discuss this article at the Oil Report forum.

G.U.N. Summer Vacation Update

I’ve come to realize that the Peak Oil analysts must either be liars, fraudsters, idiots or just clueless. For over 150 years they’ve been forecasting a calamity in oil supply, and for 150 years they’ve been wrong. They’re still wrong. They’ll continue to be wrong. We’ve heard them repeat how many years or decades left of oil we have left, and we’ve surpassed those dates and found more to spare.¹

It could be that the pro-union anarchists are even more clueless, as it seen in a recent article at anarkismo.net: Right To Work No Thanks Canada is seeing a boom in the energy market, with new jobs being created every day. In pro-socialist Canada, though, jobs aren’t so easy to come by. With a huge supply of unworking adults, these new jobs being created are seeing a bigger supply of workers than there is a demand for them, which means wages will be low than if there were fewer workers. Anarkismo believes the answer is to stop unions from competiting with one another, and create one huge union for all workers everywhere. Maybe the fraudsters in the Peak Oil analysis market aren’t so bad after all.

Another problem with market analysts who deceive the average consumer is the situation we see where consumers invest incorrectly based on bad information. I’m a free market advocate, so I believe you reap what you sow — if you trust the “experts,” you deserve what you get. We’re now seeing far-left opinions on how to prevent an oil calamity, such as a carbon tax.² Instead of putting faith in the market (which has lowered the price of gas for 150 years), some people want to put faith in government (that has increased the cost of gas for 150 years). These new-lefters are not considering the price increase due to dollar devaluation (money supply inflation) or due to excessive regulation and licensing within the industry. The problem isn’t that we don’t have enough government — we have too much!

The Oil industry has been run by politicians and insiders aligned with politicians for decades. One such insider and politician is liar and fraudster Michael Meacher, who offers his “sagely” advice in the Telegraph: “Our only hope lies in forging a new energy world order”³ Here is a politician who used to control the Environmental Ministry in the UK for almost 6 years, and was an MP for years before that. First he had massive control over a small locale, then he had control over a country’s business climate. Now he wants international control. He’s another Peak Oil liar who just wants control — he cares little for his constituents or consumers as a whole.

Exxon believes they’ve found a new way to extract gas from the Earth — a new way that could increase world supplies by almost 2 years of US usage.⁴ Those against Exxon’s new technique include some of their competitors (of course), who say their technique isn’t new and doesn’t work. We’ll have to see if environmental overregulation and overlicensing might be part of any failure, if such happens to Exxon in this trial.

We’re unfortunately still seeing too much overregulation and overlicensing in the energy market. In Colorado we’re seeing preferential tax incentives being given to certain companies for building in distressed areas.⁵ While I am always anti-tax, I don’t believe you ever see the truth in a market when one market is given tax breaks and another still has to pay them. If getting rd of taxes helps some businesses, why not get rid of all taxes to help all businesses?

If Canadians aren’t happy with the pay from energy labor up north, they should consider moving down to Texas. “We’re still short rig hands,” says Morris Burns, executive vice president of the Permian Basin Petroleum Association. “That’s why the pay has risen; they’re paying $18, $19, $20 an hour to start — that’s the only way they can get people.”⁶ Texas is seeing a huge increase in re-opened oil wells as the price of international oil soars high enough to make local wells profitable again. I haven’t often believed that wars in the Middle East were solely about oil, but the result is enough to see that the local oil companies are excited by the high prices.

We’re also seeing technology increase the opportunities for oil companies to find more crude farther down than ever before. “In the Hamaca field, an area the size of Houston that produces oil for Chevron, ConocoPhillips and the Venezuelan state company, oil now slurps through an octopus-like system of horizontal wells that reach out as far as 8,000 feet. The drill bits are equipped with sensors that emit seismic signals measuring what it is passing through — whether rock, sandstone, fine shale, sand or clay.”⁷

Finally, one of the biggest news reports today being copied by every wire-based paper is the news that the Canadian province of Alberta has kicked off a two week lobbying blitz of Washington, D.C.⁸ The Albertan government and local businesses are likely looking for American investment (government, private and subsidized) into the Albertan tar sands market — a market that still has proven profitable up to this point in time.

Discuss this article at the Oil Report forum.

G.U.N. Summer Vacation Update