If the news today is an indication of things to come, the next few months are not going to be pretty. If the big boys are preparing for the worst, imagine the fear from the debt-ridden little guys.
Despite the ‘demand destruction’ hype, it is interesting to note that during this severe global recession, worldwide oil usage has dropped by a minuscule 2.7%. So, what will happen when the world comes out of this recession? Who will rise up to the challenge and meet our insatiable thirst for energy? These are critical questions not many are willing to ask.
Recently, I had the unique opportunity to tour two different oil sands operations near Fort McMurray, in northern Alberta. I saw a massive open-pit oil sands mine, and the associated reclamation effort, operated by Syncrude Canada Ltd. I also visited an in situ oil sands recovery project called Surmont, operated by ConocoPhillips (NYSE:COP).
A couple of weeks ago I was in Fort McMurray, Alberta. I was visiting two large oil sands operations, courtesy of Conoco Phillips (NYSE:COP), Syncrude Canada and the American Petroleum Institute, which sponsored the trip. I’ve been all over the place, but never to a working oil sands operation. This was a first for me, and quite an eye-opener.
Brazil is making a national commitment to develop energy resources located far offshore in the South Atlantic. Indeed, no nation has ever advanced such an ambitious plan for long-term comprehensive offshore development. And it’s being bankrolled by China.
The so-called Waxman-Markey bill snaking its way through the greasy halls of Congress looks likes the most expensive thing to hit the economy since the financial crisis began. Even the normally mild-mannered Wall Street Journal called it “one of the most ambitious efforts to re-engineer American social and economic behavior in decades, presenting risks and opportunities for a wide array of businesses from Silicon Valley to the coal fields of the Appalachians.”
While the viability of the electric car is still heavily debated, the other attempt to reduce our dependency on foreign oil is making news again. And the news is not good.
When most people think of oil, they think of light, sweet crude that comes up out of little holes in the ground. You describe oil by its API gravity. For example, oil like Brent crude or West Texas Intermediate has an API gravity of 38-40. The oil that Col. Drake pulled from the ground at Titusville, Pa., in 1859 had API gravity near 60. These types of oil are relatively easy to pump from a reservoir, lift to the surface and transport via pipeline to the refinery.
The Organization of Petroleum Exporting Countries (OPEC) will likely maintain its crude oil production quotas at its meeting in Vienna, Austria today, Thursday.
China has overtaken the U.S. in yet another category of global influence this morning. This time it’s Brazil. China is now Brazil’s No. 1 trading partner, snapping a nearly 80-year tradition of Brazil depending primarily on exports to America.