America's energy heartland scrambled yesterday to brace for Hurricane Rita, while economists struggled to gauge the impact of back-to-back catastrophic storms on the world's largest economy. As major highways out of Galveston, TX, remained clogged with many of the 1.3 million residents fleeing Rita, shippers, truckers and railroads continued to shut down their operations in the Texas Gulf Coast. Houston's port, the second-largest in the US, closed down while CNF's Con-Way Transportation Services, the top regional trucker, closed its terminals just hours ahead of 150-mile-an-hour winds hitting the low-lying coast. Union Pacific and BNSF halted their train shipments. The state's major refiners were also closing down operations in anticipation of Rita, something that could again drive gasoline prices higher again. Rita appeared heading away from Galveston and now might come ashore near Port Arthur - a section of coastline with the country's biggest concentration of oil refineries. These refineries account for 27.5% of US refining capacity. "My message is that shutdowns of industry facilities could impact the flow of gasoline and other fuels," said Red Cavaney, the American Petroleum Institute's president. "The shutdown, or anticipated shutdown, of any significant part of that capacity could affect US gasoline markets." That's because, Cavaney said, more than 5% of US refining capacity has already been shut down by Katrina. So far, 11 of Texas' 26 refineries, with a combined daily capacity of 4 million barrels, have been shut while the US Minerals Management Service said on Wednesday 469 platforms in the Gulf are shutdown, up from 136 on Tuesday. More than 73% of oil production in the region has been shut in. Besides being a major oil and natural gas hub, Texas is also home to about half of the country's chemical production. Economists said they hoped the hurricane would not be as devastating to the region's energy industry as Katrina had been. "We could get lucky and get less energy destruction," said Chris Varvares, president of Macroeconomic Advisers. Economists admitted they were at a loss to put a pricetag on the widespread damage before Rita hits.
Meanwhile, the issue of capacity and a perceived lack of cushion in the North American refining industry is a popular topic today. No one - from Grand Prairie, TX, to Grande Prairie, AB - wants to see gasoline rationing and kilometre-long queues at the pumps. According to Judith Dwarkin, chief economist at Ross Smith Energy Group, you can blame today's pinch at the pumps and the tightness between supply and demand in world gasoline markets on the late 1970s and oil prices that soared toward US$90 a barrel in today's money. So many refineries were built to take advantage of the boom that the energy industry is just now emerging from a 20-year adjustment to get back to peak capacity, which explains why North America could be in a real fix as a hurricane threatens to put a choke hold on plants that produce about 25% of its gasoline. "The number of refineries in the US today is half of what there was in the mid-1980s, and yet they are producing twice as much product," she said. As the crisis lurks, people are wondering why no new refineries have been built in Canada or the US for almost 25 years. "During that period, margins were really quite pathetic. There was really no incentive to build refineries," said
Dwarkin. Refineries were built as demand for oil, worldwide, was actually falling. Consumption later began to catch up, eventually driving capacity to the point today where every refinery on North American soil is running full-out. Tight profit margins and volatility in world oil and gasoline markets drove companies to find ways to add capacity without spending billions on brand new plants. Even with oil surging toward US$70 a barrel and prices for processed petroleum products such as gasoline soaring, refining is still a risky business, according to Petro-Canada spokesman Jon Hamilton. Petro-Canada operates two refineries, a 110,000-barrel-a-day facility in Edmonton and a 130,000-bpd plant in Montreal. "Our refining and marketing profit is just over 2 cents a litre," Hamilton said. He did say refining margins across North America have gone up over the last 10 years, however.
(National Post, Wall Street Journal 050923)
23 September 2005
US$5-trillion needed to tap oil reserves
The International Energy Agency said technological investments will expand world oil supplies, dismissing "peak oil" theories that supplies are running out. "There is no shortage of oil and gas in the ground, but quenching the world's thirst for them will call for major investment in modern technologies," IEA executive director Claude Mandil said in a statement marking the publication of a 150-page book Resources to Reserves, Oil and Gas Technologies for the Energy Markets of the Future. At least US$5-trillion in investment will be needed in the next three decades to tap reserves, the IEA said. The IEA has never before directly responded to "peak oil" theorists, who say the agency is overly optimistic about estimates of increased production. "Peak oil" is based partly on the work of M. King Hubbert, a former Royal Dutch Shell geophysicist who predicted in 1949 that US domestic onshore oil production would plateau by about 1970, a prediction that proved accurate. The IEA said a 5% increase in average recovery rates from the current level of about 35% would "bring more oil than Saudi Arabia's reserves." Saudi Arabia, the world's largest oil producer, has the world's largest oil reserves at 263 billion barrels, according to BP statistics. So-called non-conventional oil sources, such as heavy-oil deposits in Canada and Venezuela and reserves in extremely deep water or remote regions may hold more than half of the world's undiscovered oil, the report said. The IEA estimates there are roughly 10 trillion barrels of oil equivalent of conventional oil and gas in place and at least as much non-conventional oil.
(National Post 050923)
(National Post 050923)
22 September 2005
It's déjà vu in the Gulf as Rita bears down
Crude oil prices climbed toward US$68 a barrel Thursday as hurricane Rita closed in on Texas, raising fears it would hit key production facilities along the US Gulf Coast that were largely untouched by hurricane Katrina's onslaught three weeks ago. The Category 5 hurricane with 265-kilometre-per-hour winds is expected to strike Texas, the heart of US oil production, on Saturday. More than 1.3 million people in Texas and Louisiana - including hundreds of oil workers - were ordered to evacuate. The region is home to 18 oil refineries that produce 23% of the country's petroleum products, according to the US Energy Information Administration. Nine of those facilities, representing 12% of US refinery capacity have shut. The US Minerals Management Service said Wednesday that 469 platforms in the Gulf are unstaffed, up sharply from 136 on Tuesday. More than 73% of oil production in the region is blocked, up from 58% Tuesday. Along with Katrina, Rita has the potential to deliver a crippling second punch in a one-two combination to the US energy sector that would drive prices to new records and cause even more economic dislocation. Though it remains several hundreds kilometres offshore, once-bitten corporate executives are already warning about Rita's potential destructiveness. Valero Energy chairman William Greehey said Rita's impact on offshore oil production and refining could be a “national disaster” and push pump prices well above US$3 a gallon. Given Rita's current track, forecasters believe it will make landfall south of Houston, where many of the refineries and terminals are located. But a modest shift north would result in a direct hit on critical oil infrastructure.
Economists said the hurricanes' one-two punch could drive energy prices into the stratosphere, sapping consumer spending and confidence. “We're one storm away from a big shock to the economy,” said Neal Soss, economist at Credit Suisse First Boston. “The shock to the economy from Katrina was bad enough. We have a very severe dependency on a very limited infrastructure because we haven't invested enough in refining capacity for a long time.” Rita's threatening entry into the Gulf of Mexico came as the oil industry was struggling to recover from Katrina's wallop, which shut down offshore rigs and several refineries, four of which have yet to restart. As the industry got production back on track, crude oil and gasoline prices had recently declined from the record post-Katrina highs. The EIA reported yesterday that retail gasoline prices dropped for a second successive week, to an average of $2.79 a gallon for regular unleaded from the peak of $3.07 two week ago. However, pump prices are expected to reverse direction as a result of a spike in crude and wholesale gasoline on the New York Mercantile Exchange this week. Yesterday, crude oil hit a two-week high of $68.10 a barrel before settling at $66.80 while the wholesale price of unleaded gasoline rose 7.65 cents to $2.0532 a gallon. The loonie also fluttered with the prospect of higher energy and commodity prices ahead, rising to a 13-year high of US85.87 cents before falling back to 85.46 cents. And Canadians just starting to see pump prices retreat after weeks of record highs should also brace for a return to higher gasoline costs due to Rita.
In a sign of growing frustration over surging oil prices, the head of the US Energy Information Administration, Guy Caruso, slammed OPEC for constraining production to keep prices high - days after the 11-member oil cartel pledged to make available an additional two million barrels daily to cope with high demand. “Without question,” Caruso said Wednesday when asked during a Senate Commerce Committee hearing whether OPEC has contributed to soaring oil prices. “OPEC policy has been to constrain production and collude ... Under the FTC definition of collusion and price-fixing, yes,” he said. The Organization of Petroleum Exporting Countries, responsible for a third of global output, promised earlier this week to make available an additional two million barrels daily, but its members have also said the problem was not with the amount of crude available but with refining capacity.
(Canadian Press 050921, 050922, Globe and Mail, National Post, 050922)
Economists said the hurricanes' one-two punch could drive energy prices into the stratosphere, sapping consumer spending and confidence. “We're one storm away from a big shock to the economy,” said Neal Soss, economist at Credit Suisse First Boston. “The shock to the economy from Katrina was bad enough. We have a very severe dependency on a very limited infrastructure because we haven't invested enough in refining capacity for a long time.” Rita's threatening entry into the Gulf of Mexico came as the oil industry was struggling to recover from Katrina's wallop, which shut down offshore rigs and several refineries, four of which have yet to restart. As the industry got production back on track, crude oil and gasoline prices had recently declined from the record post-Katrina highs. The EIA reported yesterday that retail gasoline prices dropped for a second successive week, to an average of $2.79 a gallon for regular unleaded from the peak of $3.07 two week ago. However, pump prices are expected to reverse direction as a result of a spike in crude and wholesale gasoline on the New York Mercantile Exchange this week. Yesterday, crude oil hit a two-week high of $68.10 a barrel before settling at $66.80 while the wholesale price of unleaded gasoline rose 7.65 cents to $2.0532 a gallon. The loonie also fluttered with the prospect of higher energy and commodity prices ahead, rising to a 13-year high of US85.87 cents before falling back to 85.46 cents. And Canadians just starting to see pump prices retreat after weeks of record highs should also brace for a return to higher gasoline costs due to Rita.
In a sign of growing frustration over surging oil prices, the head of the US Energy Information Administration, Guy Caruso, slammed OPEC for constraining production to keep prices high - days after the 11-member oil cartel pledged to make available an additional two million barrels daily to cope with high demand. “Without question,” Caruso said Wednesday when asked during a Senate Commerce Committee hearing whether OPEC has contributed to soaring oil prices. “OPEC policy has been to constrain production and collude ... Under the FTC definition of collusion and price-fixing, yes,” he said. The Organization of Petroleum Exporting Countries, responsible for a third of global output, promised earlier this week to make available an additional two million barrels daily, but its members have also said the problem was not with the amount of crude available but with refining capacity.
(Canadian Press 050921, 050922, Globe and Mail, National Post, 050922)
Rita could equal $5 gas
Speculation is a dangerous hobby, but it is the fuel that drives all the Debbie Downers and Cassandras out there into our comfortable frenzied paranoia...
The timing and strength of the latest storm could cause worse spike at the pumps than Katrina did.
September 22, 2005: 9:32 AM EDT
By Chris Isidore, CNN/Money senior writer
NEW YORK (CNN/Money) - Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.
Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.
Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.
"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.
Michael Schlacter, chief meteorologist at Weather 2000, said Rita now appears most likely to hit between Port Arthur and Corpus Christi, Texas, sometime between Friday afternoon and Saturday morning.
Just about all of Texas's refinery capacity lies in that at-risk zone.
"There is no lucky 7-10 split scenario to use a bowling analogy," he said. "If you're [a refiner] within 200 miles, you're going to feel the effect."
Compounding Katrina's impact
When Katrina hit, 15 refineries, nearly all in Louisiana and Mississippi, with a combined capacity of about 3.3 million barrels a day were shut down or damaged, according to the Energy Department. That represented almost 20 percent of U.S. refining capacity.
Within a week, almost two-thirds of that damaged capacity had resumed some operations, according to the department. But four refineries with nearly 900,000 barrels a day of capacity are still basically shut down.
If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day, according to Bob Tippee, editor of the industry trade journal Oil & Gas Journal in Houston.
"Before Katrina, the system was already so tight that the worst-case scenario was for a disruption that took 250,000 barrels of capacity out of the picture. That would have been considered a major jolt," said Tippee.
"We're already in uncharted territory now. We can't project what happens from another shot the size of Katrina or worse."
Part of the problem is that skilled crews needed to make refinery repairs are already busy trying to fix the Katrina damage. That would extend recovery time from Rita.
"[Rita] could have a significant impact on supply and prices -- this really is a national disaster," Valero Energy Bill Greehey in an interview with Reuters Tuesday evening.
Gas not the only concern
Problems could spread beyond the gas pumps.
Tippee said that natural-gas prices could see a further spike, since so many of the offshore platforms off of Texas produce natural gas, not crude oil.
And while gasoline imports have helped bring gas prices down from record highs, there isn't as much potential for heating-oil imports, he noted.
"Gasoline tends to obscure everything, especially since we aren't paying heating bills right now," said Tippee. "But we were already looking at a winter fuel problem. We're about to take another hit that will cause a lot of problems."
Schlacter said even the oil platforms off the Louisiana Gulf Coast, which are not likely to take a direct hit from Rita, could be affected by large waves churning up the Gulf of Mexico as the storm passes to the south. Waves of as much as 40 to 50 feet could hit the platforms off the Texas Coast, he estimated.
Tippee said that production across the Gulf is already being affected by oil companies pulling workers off platforms ahead of the storm. And it's not just domestic oil being interrupted.
The Louisiana Offshore Oil Port (LOOP), the nation's largest gateway for overseas oil, stopped accepting deliveries of its 1.2 million barrels of oil a day Wednesday afternoon due to high seas, LOOP spokeswoman Barb Hesterman told Reuters. She said the disruption was expected to be "for a short time."
But if Katrina is any guide, it could take several days after Rita passes for production to resume even at oil and gas platforms that escape damage.
"There were several days where if you could have gotten out to the platform, you could have started it back up, but you couldn't find the boats or helicopters you needed to get back to the platforms," he said.
The timing and strength of the latest storm could cause worse spike at the pumps than Katrina did.
September 22, 2005: 9:32 AM EDT
By Chris Isidore, CNN/Money senior writer
NEW YORK (CNN/Money) - Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.
Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.
Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.
"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.
Michael Schlacter, chief meteorologist at Weather 2000, said Rita now appears most likely to hit between Port Arthur and Corpus Christi, Texas, sometime between Friday afternoon and Saturday morning.
Just about all of Texas's refinery capacity lies in that at-risk zone.
"There is no lucky 7-10 split scenario to use a bowling analogy," he said. "If you're [a refiner] within 200 miles, you're going to feel the effect."
Compounding Katrina's impact
When Katrina hit, 15 refineries, nearly all in Louisiana and Mississippi, with a combined capacity of about 3.3 million barrels a day were shut down or damaged, according to the Energy Department. That represented almost 20 percent of U.S. refining capacity.
Within a week, almost two-thirds of that damaged capacity had resumed some operations, according to the department. But four refineries with nearly 900,000 barrels a day of capacity are still basically shut down.
If Rita hits both the Houston-Galveston area, as well as the Port Arthur-Beaumont region near the Texas-Louisiana border, that could take out more than 3 million barrels of capacity a day, according to Bob Tippee, editor of the industry trade journal Oil & Gas Journal in Houston.
"Before Katrina, the system was already so tight that the worst-case scenario was for a disruption that took 250,000 barrels of capacity out of the picture. That would have been considered a major jolt," said Tippee.
"We're already in uncharted territory now. We can't project what happens from another shot the size of Katrina or worse."
Part of the problem is that skilled crews needed to make refinery repairs are already busy trying to fix the Katrina damage. That would extend recovery time from Rita.
"[Rita] could have a significant impact on supply and prices -- this really is a national disaster," Valero Energy Bill Greehey in an interview with Reuters Tuesday evening.
Gas not the only concern
Problems could spread beyond the gas pumps.
Tippee said that natural-gas prices could see a further spike, since so many of the offshore platforms off of Texas produce natural gas, not crude oil.
And while gasoline imports have helped bring gas prices down from record highs, there isn't as much potential for heating-oil imports, he noted.
"Gasoline tends to obscure everything, especially since we aren't paying heating bills right now," said Tippee. "But we were already looking at a winter fuel problem. We're about to take another hit that will cause a lot of problems."
Schlacter said even the oil platforms off the Louisiana Gulf Coast, which are not likely to take a direct hit from Rita, could be affected by large waves churning up the Gulf of Mexico as the storm passes to the south. Waves of as much as 40 to 50 feet could hit the platforms off the Texas Coast, he estimated.
Tippee said that production across the Gulf is already being affected by oil companies pulling workers off platforms ahead of the storm. And it's not just domestic oil being interrupted.
The Louisiana Offshore Oil Port (LOOP), the nation's largest gateway for overseas oil, stopped accepting deliveries of its 1.2 million barrels of oil a day Wednesday afternoon due to high seas, LOOP spokeswoman Barb Hesterman told Reuters. She said the disruption was expected to be "for a short time."
But if Katrina is any guide, it could take several days after Rita passes for production to resume even at oil and gas platforms that escape damage.
"There were several days where if you could have gotten out to the platform, you could have started it back up, but you couldn't find the boats or helicopters you needed to get back to the platforms," he said.
21 September 2005
Mother Nature must be SO pissed!
One million ordered away from Texas coast - Rita hits cat. 5
Last Updated Wed, 21 Sep 2005 16:45:06 EDT
CBC News
Hospitals and nursing homes were evacuated and up to one million along the Gulf Coast were ordered out Wednesday as hurricane Rita turned into a 265 km/h monster that could pound Texas and bring more damage and heartache to New Orleans.
Forecasters predict Rita could come ashore Saturday along the central Texas coast between Galveston and Corpus Christi. But even a slight rightward turn could prove devastating to New Orleans.
The U.S. National Hurricane Center said Rita strengthened into a Category 5 storm on Wednesday afternoon. Forecasters said Rita could be the most intense hurricane on record ever to hit Texas, and one of the most powerful to slam into the U.S. mainland.
All of Galveston, vulnerable sections of Houston and Corpus Christi and the damaged New Orleans were under mandatory evacuation orders, one day after Rita caused minor damage when it sideswiped the Florida Keys as a much weaker storm.
The 267,000 people in Galveston County have been ordered out. Galveston island has no land much more than two-metres above water level.
In 1900, between 6,000 and 12,000 were killed when a hurricane hit Galveston. It was one of the deadliest natural disasters in U.S. history, it practically wiped the low-lying city off the map.
Low-lying, flood-prone areas of Houston, which at its lowest point is only two metres above sea level, were ordered evacuated. The Houston mayors' office said as many as 1 million people in the Houston-Galveston area were under orders to get out.
Along the Louisiana coast, some 20,000 people or more were being evacuated or were warned to leave.
Earlier Wednesday, Texas Governor Rick Perry warned residents of the Texas coast to get out now before Rita hits. Perry said a long stretch of his state's Gulf coast should be evacuated immediately.
The governor said: "Homes and businesses can be rebuilt. Lives cannot. If you're on the coast between Beaumont and Corpus Christi, now's the time to leave."
Beaumont is near Louisiana in eastern Texas and Corpus Christi is near Mexico in the southwest part of the state.
The last major hurricane to hit Texas was Alicia in 1983. It flooded downtown Houston, spawned 22 tornadoes and left 21 people dead. The damage from the Category 3 storm was put at more than $2 billion.
Tropical Storm Allison flooded Houston in 2001, doing major damage to hospitals and research centers and killing 23 people.
If Rita comes ashore anywhere near Galveston or Corpus Christi, the potential to knock out a whole bunch of America's oil production infrastructure is very high. The estimates are that around 25% of the United States' domestic production goes through the refineries around Galveston. This couldn't have come at a worse time. Keep your fingers crossed that everyone stays safe and we don't see yet another price spike after the weekend.
Last Updated Wed, 21 Sep 2005 16:45:06 EDT
CBC News
Hospitals and nursing homes were evacuated and up to one million along the Gulf Coast were ordered out Wednesday as hurricane Rita turned into a 265 km/h monster that could pound Texas and bring more damage and heartache to New Orleans.
Forecasters predict Rita could come ashore Saturday along the central Texas coast between Galveston and Corpus Christi. But even a slight rightward turn could prove devastating to New Orleans.
The U.S. National Hurricane Center said Rita strengthened into a Category 5 storm on Wednesday afternoon. Forecasters said Rita could be the most intense hurricane on record ever to hit Texas, and one of the most powerful to slam into the U.S. mainland.
All of Galveston, vulnerable sections of Houston and Corpus Christi and the damaged New Orleans were under mandatory evacuation orders, one day after Rita caused minor damage when it sideswiped the Florida Keys as a much weaker storm.
The 267,000 people in Galveston County have been ordered out. Galveston island has no land much more than two-metres above water level.
In 1900, between 6,000 and 12,000 were killed when a hurricane hit Galveston. It was one of the deadliest natural disasters in U.S. history, it practically wiped the low-lying city off the map.
Low-lying, flood-prone areas of Houston, which at its lowest point is only two metres above sea level, were ordered evacuated. The Houston mayors' office said as many as 1 million people in the Houston-Galveston area were under orders to get out.
Along the Louisiana coast, some 20,000 people or more were being evacuated or were warned to leave.
Earlier Wednesday, Texas Governor Rick Perry warned residents of the Texas coast to get out now before Rita hits. Perry said a long stretch of his state's Gulf coast should be evacuated immediately.
The governor said: "Homes and businesses can be rebuilt. Lives cannot. If you're on the coast between Beaumont and Corpus Christi, now's the time to leave."
Beaumont is near Louisiana in eastern Texas and Corpus Christi is near Mexico in the southwest part of the state.
The last major hurricane to hit Texas was Alicia in 1983. It flooded downtown Houston, spawned 22 tornadoes and left 21 people dead. The damage from the Category 3 storm was put at more than $2 billion.
Tropical Storm Allison flooded Houston in 2001, doing major damage to hospitals and research centers and killing 23 people.
If Rita comes ashore anywhere near Galveston or Corpus Christi, the potential to knock out a whole bunch of America's oil production infrastructure is very high. The estimates are that around 25% of the United States' domestic production goes through the refineries around Galveston. This couldn't have come at a worse time. Keep your fingers crossed that everyone stays safe and we don't see yet another price spike after the weekend.
20 September 2005
Anniversary
Lake Louise May 2005
It's Joe and my fifth anniversary today. I can't believe it's been five years already (or is that it's ONLY five years?). How time flies when you're having fun! I think for all the problems that we've worked through, we're pretty compatible. We don't really fight, and less my stupid issues, we don't really have any reason to. I guess there are some difficulties and frustrations, but what relationship doesn't have them? It's a good time to reflect on where we've been and ponder where we're going. We were going to go out for dinner tonight at Rouge, however Joe is sick as heck today, so we're postponing that until the weekend. His birthday is also coming up on the 29th, so I have to dig into my pockets to find some money to buy him what he really wants for his birthday -- a PlayStation 2.
Upper Lake Kananaskis 2005
Fire Drill
So, I just got back to my desk from another fire drill. We haven't had a large-scale exercise in a long time. The entire office building was evacuated. I swear it took 30 minutes to clear out the building. I can't believe how slow some of these freaking people move. Who brought out the ugly stick too? Are there ANY good looking people working in my building? They're all fat, middle-aged, oil and railway kooks that don't take care of themselves very well. Why the frick does it take you so long to walk single file through a doorway? I MEAN - COME ON! If you're a slow beluga in my way in a real emergency, you can fully expect me to be stepping on some of your body parts to get down the stairwell from the 20th floor. Stan and Barry joked that we could either braid Ethernet cable to make a long escape rope from 20th or pack people into our standup closets (which we lovingly call 'coffins') with coats and such for insulation, and then drop them through a broken window for a soft landing on the parkade 17 floors below. They don't call them coffins for nothing...
I was tempted to just go home, however, I was in the food court when the alarms went off. As soon as that happens, the elevators stop working and by the time I started climbing up the stairwell, people were already coming down. I didn't have my coat or keys, so I was screwed. I turned around and shuffled with the rest of the cattle outside. I guess it could've been worse, had I had to walk down the stairwell single file from the 20th -- again.
I was tempted to just go home, however, I was in the food court when the alarms went off. As soon as that happens, the elevators stop working and by the time I started climbing up the stairwell, people were already coming down. I didn't have my coat or keys, so I was screwed. I turned around and shuffled with the rest of the cattle outside. I guess it could've been worse, had I had to walk down the stairwell single file from the 20th -- again.
Accountability? Who woulda thunk?
Kozlowski gets up to 25 years
Mark Swartz, former Tyco CFO, also gets 8-1/3 to 25; both men fined, handcuffed, sent to jail.
September 19, 2005: 4:31 PM EDT
By Grace Wong, CNN/Money staff writer
NEW YORK (CNN/Money) - Ex-Tyco CEO Dennis Kozlowski received 8-1/3 to 25 years in prison Monday for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate.
Former Tyco CFO Mark Swartz got the same sentence from Manhattan Supreme Court Judge Michael Obus.
Judge Obus also ordered Kozlowski and Swartz to pay $134 million back to Tyco, and Kozlowski was fined $70 million and Swartz $35 million -- bringing total fines and restitution to $239 million.
The former Tyco executives were ordered to start serving their sentences immediately and were led from the courtroom in handcuffs.
In a crowded New York state courtroom, the prosecution had asked for the maximum penalty of 15 to 30 years for both men, while Kozlowski's defense had focused on his character as a "family man."
In June, Kozlowski and Swartz were found guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating business law. Both men say they will appeal the verdicts.
That verdict came after the first trial against Kozlowski and Swartz ended in a mistrial in April 2004 after the sole juror holding out for an acquittal reported receiving threats.
During the first trial, prosecutors focused on what they called misuse of Tyco's money, such as a $2 million birthday party Kozlowski threw for his wife on the Italian island of Sardinia and a $6,000 shower curtain allegedly purchased with company funds.
But in the second trial, which started last January, prosecutors changed their strategy and narrowed their case.
The sentence was a clear signal that judges at the state level -- who have more discretion over sentencing than judges on the federal bench -- are equally concerned with sending tough messages to executives charged with "white-collar" crimes.
If Kozlowski and Swartz show good behavior, they could be eligible for parole after 6 years and 11 months, according to Linda Foglia, spokeswoman for the New York State Department of Correctional Services.
The pair will spend time at an interim facility, where they will undergo a series of tests and reviews, before a prison is designated for them. Since they received a sentence of more than six years, they likely will be sent to one of New York's maximum security prisons, which include Attica and Sing Sing.
Substantial sentence
As the first high-profile corporate fraud case tried in a state court, legal experts had been watching the sentence to see whether state judges would follow the lead of judges in federal courts, who have imposed severe sentences on corporate executives found guilty of white collar crimes.
Bernie Ebbers got 25 years for his role in the collapse of WorldCom. Adelphia founder and ex-CEO John Rigas also received a hefty sentence of 15 years. Both were tried in federal court.
"Now anyone who wants to know what trial court judges in New York state are doing when confronted with conviction in a high-profile corporate fraud case, the answer is imposing a significant sentence," former prosecutor Jacob Frenkel said.
"Even on the short end of the range, it is a substantial sentence," he said.
The sentences were harsh, but nowhere near as severe as those in previous cases, said Greg Wallance, a former federal prosecutor now at Kaye Scholer LLP in New York.
"It's a much more lenient sentence than handed out in federal cases, and I think that partly reflects the fact that the company was not forced into bankruptcy or destroyed but is doing relatively well," he said.
But he added, the conditions for Swartz and Kozlowski will be harsh. State prisons tend to house more violent criminals, such as those prosecuted for rape and homicide. White-collar criminals sentenced to federal prison often go to minimum-security facilities derisively dubbed "Club Fed."
Few were surprised that Kozlowski and Swartz received much more than a slap on the wrist, saying courts are feeling public pressure to impose harsher sentences.
But long sentences aren't necessarily warranted because the same deterrent effect could be accomplished by giving less time, said Ellen Podgor, professor at Georgia State University College of Law.
"You need imprisonment clearly. It's just the amount needs to be proportional to what we're trying to accomplish in the criminal justice system," she said. "If we're trying to make sure these crimes aren't committed in future, you don't need sentences like this."
Apparently the Enron court cases start in January 2006.
Mark Swartz, former Tyco CFO, also gets 8-1/3 to 25; both men fined, handcuffed, sent to jail.
September 19, 2005: 4:31 PM EDT
By Grace Wong, CNN/Money staff writer
NEW YORK (CNN/Money) - Ex-Tyco CEO Dennis Kozlowski received 8-1/3 to 25 years in prison Monday for his part in stealing hundreds of millions of dollars from the manufacturing conglomerate.
Former Tyco CFO Mark Swartz got the same sentence from Manhattan Supreme Court Judge Michael Obus.
Judge Obus also ordered Kozlowski and Swartz to pay $134 million back to Tyco, and Kozlowski was fined $70 million and Swartz $35 million -- bringing total fines and restitution to $239 million.
The former Tyco executives were ordered to start serving their sentences immediately and were led from the courtroom in handcuffs.
In a crowded New York state courtroom, the prosecution had asked for the maximum penalty of 15 to 30 years for both men, while Kozlowski's defense had focused on his character as a "family man."
In June, Kozlowski and Swartz were found guilty on 22 of 23 counts of grand larceny and conspiracy, falsifying business records and violating business law. Both men say they will appeal the verdicts.
That verdict came after the first trial against Kozlowski and Swartz ended in a mistrial in April 2004 after the sole juror holding out for an acquittal reported receiving threats.
During the first trial, prosecutors focused on what they called misuse of Tyco's money, such as a $2 million birthday party Kozlowski threw for his wife on the Italian island of Sardinia and a $6,000 shower curtain allegedly purchased with company funds.
But in the second trial, which started last January, prosecutors changed their strategy and narrowed their case.
The sentence was a clear signal that judges at the state level -- who have more discretion over sentencing than judges on the federal bench -- are equally concerned with sending tough messages to executives charged with "white-collar" crimes.
If Kozlowski and Swartz show good behavior, they could be eligible for parole after 6 years and 11 months, according to Linda Foglia, spokeswoman for the New York State Department of Correctional Services.
The pair will spend time at an interim facility, where they will undergo a series of tests and reviews, before a prison is designated for them. Since they received a sentence of more than six years, they likely will be sent to one of New York's maximum security prisons, which include Attica and Sing Sing.
Substantial sentence
As the first high-profile corporate fraud case tried in a state court, legal experts had been watching the sentence to see whether state judges would follow the lead of judges in federal courts, who have imposed severe sentences on corporate executives found guilty of white collar crimes.
Bernie Ebbers got 25 years for his role in the collapse of WorldCom. Adelphia founder and ex-CEO John Rigas also received a hefty sentence of 15 years. Both were tried in federal court.
"Now anyone who wants to know what trial court judges in New York state are doing when confronted with conviction in a high-profile corporate fraud case, the answer is imposing a significant sentence," former prosecutor Jacob Frenkel said.
"Even on the short end of the range, it is a substantial sentence," he said.
The sentences were harsh, but nowhere near as severe as those in previous cases, said Greg Wallance, a former federal prosecutor now at Kaye Scholer LLP in New York.
"It's a much more lenient sentence than handed out in federal cases, and I think that partly reflects the fact that the company was not forced into bankruptcy or destroyed but is doing relatively well," he said.
But he added, the conditions for Swartz and Kozlowski will be harsh. State prisons tend to house more violent criminals, such as those prosecuted for rape and homicide. White-collar criminals sentenced to federal prison often go to minimum-security facilities derisively dubbed "Club Fed."
Few were surprised that Kozlowski and Swartz received much more than a slap on the wrist, saying courts are feeling public pressure to impose harsher sentences.
But long sentences aren't necessarily warranted because the same deterrent effect could be accomplished by giving less time, said Ellen Podgor, professor at Georgia State University College of Law.
"You need imprisonment clearly. It's just the amount needs to be proportional to what we're trying to accomplish in the criminal justice system," she said. "If we're trying to make sure these crimes aren't committed in future, you don't need sentences like this."
Apparently the Enron court cases start in January 2006.
Fear of another Gulf storm sparks record jump in oil price
This is how resilient, well-planned and enduring the infrastructure our entire society and culture depends on is? We are disconcertingly sleepwalking into the future, folks. Two well-placed storms could knock out over 25% of the U.S. extraction and refining capacity. Scary.
Crude oil futures surged more than US$4 -- the biggest one-day price jump ever -- amid worries that tropical storm Rita strengthening off the Bahamas could hit US oil facilities in the Gulf of Mexico later this week, striking another blow at an industry struggling to recover from hurricane Katrina. The swells in crude, heating oil and gasoline futures came as OPEC ministers met to discuss how to relieve price pressures in the oil market and expressed concern that Rita would bear down on the hurricane-ravaged US Gulf of Mexico coast. "The main driver today is tropical storm Rita. We really can't afford to lose more production," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. Long-range forecasts showed the system moving into the Gulf of Mexico late in the week as a hurricane, then possibly approaching Mexico or Texas. But forecasters warned those across the US southern coast, which is still recovering from the impact of hurricane Katrina, that long-term predictions are subject to large errors. If Rita strikes Texas, the biggest oil refiner in the United States, it could spell serious disruption to the industry. Texas has 26 petroleum refineries, most of which are located along the coast, with the capacity to pump 4.6 million barrels a day. That's more than a quarter of the US total refining capacity, according to the US Department of Energy. Chevron and Shell began evacuating workers from offshore oil and gas platforms and drilling rigs in the Gulf on Monday. A total of five rigs were evacuated Monday, up from two last week.
(Vancouver Sun 050920)
Crude oil futures surged more than US$4 -- the biggest one-day price jump ever -- amid worries that tropical storm Rita strengthening off the Bahamas could hit US oil facilities in the Gulf of Mexico later this week, striking another blow at an industry struggling to recover from hurricane Katrina. The swells in crude, heating oil and gasoline futures came as OPEC ministers met to discuss how to relieve price pressures in the oil market and expressed concern that Rita would bear down on the hurricane-ravaged US Gulf of Mexico coast. "The main driver today is tropical storm Rita. We really can't afford to lose more production," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. Long-range forecasts showed the system moving into the Gulf of Mexico late in the week as a hurricane, then possibly approaching Mexico or Texas. But forecasters warned those across the US southern coast, which is still recovering from the impact of hurricane Katrina, that long-term predictions are subject to large errors. If Rita strikes Texas, the biggest oil refiner in the United States, it could spell serious disruption to the industry. Texas has 26 petroleum refineries, most of which are located along the coast, with the capacity to pump 4.6 million barrels a day. That's more than a quarter of the US total refining capacity, according to the US Department of Energy. Chevron and Shell began evacuating workers from offshore oil and gas platforms and drilling rigs in the Gulf on Monday. A total of five rigs were evacuated Monday, up from two last week.
(Vancouver Sun 050920)
19 September 2005
Alberta bonus is folly, say business leaders
A storm is gathering against Alberta premier Ralph Klein's prosperity bonus cheques with Calgary's Chamber of Commerce saying the payouts are ill-conceived, short-sighted and compromise Alberta's prosperity. "You would think when the chamber speaks the government would listen," political analyst David Taras told the Herald Sunday. "If (Klein) loses the business community, it's over." In a stern release the chamber said writing cheques to Albertans that could total $1.4 billion is "neither disciplined nor balanced" and is a "snap decision without foresight." Jocelyn Burgener, director of public affairs for the chamber, said the comments are a reflection of the growing discontent with how Klein is spending the province's cash. Klein's spokeswoman, Marisa Etmanski, said the chamber needs to be patient. A full-blown tax review is underway and long-term plans for infrastructure and reinvesting in the Heritage Fund are being looked at, she said.
(Calgary Herald 050919)
The Klein government is showing once again how short-sighted and moorless they are now that the books are balanced. They are a one-trick pony, and now that they have accomplished what they set out to do, they don't know what else to do. That plus the fact Ralph is ready to retire and doesn't really care what happens anymore. Not that I'm going to mind getting a cheque from him in the mail, but they could use that money for so many more exciting and progressive things that would truly make Alberta the envy of the world.
(Calgary Herald 050919)
The Klein government is showing once again how short-sighted and moorless they are now that the books are balanced. They are a one-trick pony, and now that they have accomplished what they set out to do, they don't know what else to do. That plus the fact Ralph is ready to retire and doesn't really care what happens anymore. Not that I'm going to mind getting a cheque from him in the mail, but they could use that money for so many more exciting and progressive things that would truly make Alberta the envy of the world.
Just 'Ming'-ing It
Saturday night found us out on 17th Ave. getting together to see our friend Philbert, who moved to Toronto from Calgary for work a year ago. He's looking well and doing good and still quaffing beers at a rate that allows him into our exclusive club! After our imbibations at Ming, the boys (including Raymond) headed to Twisted Element for the the rest of the evening. If it's any indication on how the evening went, I spent the entire day on Sunday in pain.
Lovers?
Susan, Joe, Reid, Nancy, and Chairman Mao
Philbert and Jeff
Doug, Joe, Nick, Curtis
Lovers?
Susan, Joe, Reid, Nancy, and Chairman Mao
Philbert and Jeff
Doug, Joe, Nick, Curtis
17 September 2005
New pics of Treslie
I'm planning on heading up to Red Deer to see Treslie next weekend. She sure is looking more like her parents everyday!
New Blue Eyes
A smiley girl in pink...
New Blue Eyes
A smiley girl in pink...
16 September 2005
**BORE ALERT** A Quick Macroeconomics lesson
Real World Economics
by Ed Lotterman
In modern economies, trade in physical goods is only one component in determining international money flows. Services also flow, whether it be a Minneapolis architectural firm designing a housing project in Korea or a German insurance firm selling variable annuities to U.S. households.
Then there are government payments. The United States gives some $3 billion per year to Israel. Tens of thousands of Social Security and military retirement checks go to U.S. retirees in Costa Rica, Mexico and Poland.
Personal remittances enter in, too. Philippine maids in Hong Kong send money back to their families.
All of these payments — trade, services, investment income, remittances, government payments — fall into a category called the "current account."
Investment income plays a big role. Dutch insurance companies get interest payments on U.S. Treasury bonds they hold. 3M sends profits from its Belgian subsidiary back to Maplewood.
All of these financial flows go into a category of the balance of payments called the "current account." This is the account in which we are running large deficits.
Capital flows are the other major category and are tabulated in a capital account. When the Dutch insurance company bought the T-bonds, that initial principal investment was booked in the capital account, as was 3M's spending in Belgium.
The flip side of a large current account deficit, as the United States currently has, is a capital account surplus. We are buying more abroad than we sell, or paying more income abroad than is received here, or remitting more money to foreign families and governments than they send to us.
But far more money is being invested in the United States than U.S.-based entities are investing abroad. Our capital account surplus is large.
This raises two "pushed or pulled" questions.
First, is capital flowing in because the U.S. is such a great place to invest, or because Japan, Europe and Latin America are such lousy, poor-return alternatives?
More important, are we on an import spree because all the foreign money pouring into the United States has to find a way out? Or is so much capital flowing in because our voracious importing is flooding the world with dollars that have to find a way back somehow?
The answers to these questions are not clear. But a recent Federal Reserve study confirms what economic historians have long known: Current account deficit binges reverse themselves eventually. The Fed found that this usually occurs about when the deficit hits 5 percent of GDP. We are reaching that point now.
It also found that the reversals usually lead to a fall in the exchange rate of about 40 percent. If this happens, Chinese-made clothes at the mall will be sharply higher in price. And Minnesota wheat in Rotterdam will be cheaper. Exporting producers will benefit but consumers will see higher interest rates and prices.
The tide reverses when foreign investors no longer want to risk spending large amounts of their currency to buy the expensive dollars necessary to invest in the United States.
As foreign demand for investing in the United States falls, so will the dollar in relation to other countries. When foreigners with existing U.S. investments see these assets fall in value in their domestic currency many will depart.
And as foreign investors reduce their U.S. holdings, there will be less available capital in the United States and this supply reduction will force up the price of capital — interest rates. Stock and bond prices will fall. The Fed could compensate by increasing the U.S. money supply, but this would feed inflation at a time when a weakening dollar was reducing the downward pressure cheap imports put on U.S. price levels.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc
**YAWN** Are you asleep yet? Frick, economics was always such a bore.
by Ed Lotterman
In modern economies, trade in physical goods is only one component in determining international money flows. Services also flow, whether it be a Minneapolis architectural firm designing a housing project in Korea or a German insurance firm selling variable annuities to U.S. households.
Then there are government payments. The United States gives some $3 billion per year to Israel. Tens of thousands of Social Security and military retirement checks go to U.S. retirees in Costa Rica, Mexico and Poland.
Personal remittances enter in, too. Philippine maids in Hong Kong send money back to their families.
All of these payments — trade, services, investment income, remittances, government payments — fall into a category called the "current account."
Investment income plays a big role. Dutch insurance companies get interest payments on U.S. Treasury bonds they hold. 3M sends profits from its Belgian subsidiary back to Maplewood.
All of these financial flows go into a category of the balance of payments called the "current account." This is the account in which we are running large deficits.
Capital flows are the other major category and are tabulated in a capital account. When the Dutch insurance company bought the T-bonds, that initial principal investment was booked in the capital account, as was 3M's spending in Belgium.
The flip side of a large current account deficit, as the United States currently has, is a capital account surplus. We are buying more abroad than we sell, or paying more income abroad than is received here, or remitting more money to foreign families and governments than they send to us.
But far more money is being invested in the United States than U.S.-based entities are investing abroad. Our capital account surplus is large.
This raises two "pushed or pulled" questions.
First, is capital flowing in because the U.S. is such a great place to invest, or because Japan, Europe and Latin America are such lousy, poor-return alternatives?
More important, are we on an import spree because all the foreign money pouring into the United States has to find a way out? Or is so much capital flowing in because our voracious importing is flooding the world with dollars that have to find a way back somehow?
The answers to these questions are not clear. But a recent Federal Reserve study confirms what economic historians have long known: Current account deficit binges reverse themselves eventually. The Fed found that this usually occurs about when the deficit hits 5 percent of GDP. We are reaching that point now.
It also found that the reversals usually lead to a fall in the exchange rate of about 40 percent. If this happens, Chinese-made clothes at the mall will be sharply higher in price. And Minnesota wheat in Rotterdam will be cheaper. Exporting producers will benefit but consumers will see higher interest rates and prices.
The tide reverses when foreign investors no longer want to risk spending large amounts of their currency to buy the expensive dollars necessary to invest in the United States.
As foreign demand for investing in the United States falls, so will the dollar in relation to other countries. When foreigners with existing U.S. investments see these assets fall in value in their domestic currency many will depart.
And as foreign investors reduce their U.S. holdings, there will be less available capital in the United States and this supply reduction will force up the price of capital — interest rates. Stock and bond prices will fall. The Fed could compensate by increasing the U.S. money supply, but this would feed inflation at a time when a weakening dollar was reducing the downward pressure cheap imports put on U.S. price levels.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc
**YAWN** Are you asleep yet? Frick, economics was always such a bore.
US current account deficit shows improvement
America's deficit in the broadest measure of international trade showed a slight improvement in the April-June quarter although it was still at the second-highest level in history. The Commerce Department reported that the deficit in the US current account totaled US$195.7 billion in the second quarter. That was down 1.5% from the deficit in the first three months of this year -- $198.7B -- which was the all-time high. Even with the slight improvement, the US is on track to surpass last year's record current account deficit of $668.1B. While the US so far has not had any trouble attracting the foreign money needed to finance this deficit, economists worry that at some point foreign investors will no longer want to hold such sizable sums of dollar-denominated assets. The slight improvement meant that the second quarter deficit represented 6.3% of the country's total economy, down from the record level of 6.5% in the first quarter. Federal Reserve Chairman Alan Greenspan has called the current account deficit unsustainable at present levels but he has also said he believes market forces should be able to deal with the problem in a way that does not seriously disrupt the economy. A less benign outcome would have foreigners suddenly deciding to dump their US stocks and bonds, sending stock prices plunging and interest rates soaring. Such a stampede for the exits by foreigners could be enough of a jolt to push the country into a recession. However, in the view of Greenspan and many private economists, the country's current account deficit will gradually improve over time as a slow decline in the dollar's value improves the country's trade performance by making US products cheaper in foreign markets and foreign goods more expensive in the US.
(Washington Post 050916)
***A bit of a good news. Both Canada and the US still have their humungoid capital debts to contend with on top of their trade deficits.***
(Washington Post 050916)
***A bit of a good news. Both Canada and the US still have their humungoid capital debts to contend with on top of their trade deficits.***
When will oil supply start running out?
World oil production will peak someday, and supplies will start running out. But when will the tipping point come - in years, decades, or a couple of months from now? The oil industry says crude will be plentiful for at least another generation. But some experts argue reserves are overstated, oil technologies are limited and demand, sharply boosted by the needs of China and India, could soon outpace supply. European Union finance ministers are asking the Organization of Petroleum Exporting Countries to ramp up production when the Saudi-led cartel meets Monday in Vienna - despite the failure of similar boosts over the past year and a half. Skeptics say that won't work. ''World oil production is going to peak on American Thanksgiving, with a three-week period of uncertainty on each side,'' declares Princeton professor, geologist and oil maverick Kenneth Deffeyes. He uses a formula first developed to pinpoint with near accuracy 1971 as the start of oil production decline in the US. Once supply begins to dwindle, the years to follow will see shortages that at best will cause ''global recession, possibly worse than the 1930s Great Depression,'' says Deffeyes. At worst, he warns of ''war, famine, pestilence and death.'' Deffeyes' prediction is clearly controversial. Still, it is gaining an audience, and dozens of energy experts and academics say his arguments have merit.
Oil companies and governments are betting - at least in public - that new discoveries and technology will keep the world supplied for at least the next generation. And there are those who would welcome the tipping point, believing the psychological impact will push the world into a serious drive to wean itself off oil. The US Geological Survey has predicted that a peak in recoverable oil production won't come until 2037, and Saudi Oil Minister Ali Naimi recently declared that ''technological innovation will allow us to find and extract more oil around the world.'' Kenji Kobayashi of the global watchdog International Energy Agency wrote this year that global energy demand will grow by nearly 60% by 2030, and oil will remain the fuel of choice. He urged more exploration and exploitation efforts, noting a worrisome drop in oil discoveries in recent years. Proponents of plentiful oil disagree, saying the world's proven reserves amount to 1,277 billion barrels and expected technological advances will soon open up supplies now impossible or unprofitable to exploit. That, they argue, gives the world a decades-thick cushion to develop other energy sources. ''There will be an increase of production for the next 20 to 25 years. Only after that may we face a decline,'' said Helmut Langanger, head of exploration and production at Austria's OMV oil company.
(Florida Times-Union 050916)
You know what I think? You want to know why there hasn't been any increase in refining capacity in North America for 20 years? You want to know why they're downplaying the fact that oil well discovery rates peaked globally in the 1980s? Why our domestic natural gas supply production growth rate has been in decline for a decade? Why there are no megafield projects scheduled to come onstream after 2008? It's because the oil companies know with great certainty that there isn't much dependable supply left, therefore they're attempting to fleece everyone in an attempt to siphon off as much profit as they can -- status quo is stable, baby. This may sound too simplistic, but the way finite-resource extracting industries work is unique. They're only working on one side of the equation -- all outputs. It's not like in our capitalist system a company is going to announce that they're running out of raw feedstock. It would destroy them. The oil companies want to avoid the same thing. They'll never admit they're running out of product. They're placing great blind faith in the concept that some magical energy source is going to come along and save us all. So is society in general. We can pick up some of the slack with nuclear power, wind, hydro and coal, but nothing comes even close to replacing everything to the scale we've become accustomed to globally. We're due for a huge economic and social contraction unlike anything seen in human history. Unless we can start buring the Dark Matter of course, or the Flying Spaghetti Monster sets us all straight.
Oil companies and governments are betting - at least in public - that new discoveries and technology will keep the world supplied for at least the next generation. And there are those who would welcome the tipping point, believing the psychological impact will push the world into a serious drive to wean itself off oil. The US Geological Survey has predicted that a peak in recoverable oil production won't come until 2037, and Saudi Oil Minister Ali Naimi recently declared that ''technological innovation will allow us to find and extract more oil around the world.'' Kenji Kobayashi of the global watchdog International Energy Agency wrote this year that global energy demand will grow by nearly 60% by 2030, and oil will remain the fuel of choice. He urged more exploration and exploitation efforts, noting a worrisome drop in oil discoveries in recent years. Proponents of plentiful oil disagree, saying the world's proven reserves amount to 1,277 billion barrels and expected technological advances will soon open up supplies now impossible or unprofitable to exploit. That, they argue, gives the world a decades-thick cushion to develop other energy sources. ''There will be an increase of production for the next 20 to 25 years. Only after that may we face a decline,'' said Helmut Langanger, head of exploration and production at Austria's OMV oil company.
(Florida Times-Union 050916)
You know what I think? You want to know why there hasn't been any increase in refining capacity in North America for 20 years? You want to know why they're downplaying the fact that oil well discovery rates peaked globally in the 1980s? Why our domestic natural gas supply production growth rate has been in decline for a decade? Why there are no megafield projects scheduled to come onstream after 2008? It's because the oil companies know with great certainty that there isn't much dependable supply left, therefore they're attempting to fleece everyone in an attempt to siphon off as much profit as they can -- status quo is stable, baby. This may sound too simplistic, but the way finite-resource extracting industries work is unique. They're only working on one side of the equation -- all outputs. It's not like in our capitalist system a company is going to announce that they're running out of raw feedstock. It would destroy them. The oil companies want to avoid the same thing. They'll never admit they're running out of product. They're placing great blind faith in the concept that some magical energy source is going to come along and save us all. So is society in general. We can pick up some of the slack with nuclear power, wind, hydro and coal, but nothing comes even close to replacing everything to the scale we've become accustomed to globally. We're due for a huge economic and social contraction unlike anything seen in human history. Unless we can start buring the Dark Matter of course, or the Flying Spaghetti Monster sets us all straight.
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