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Travel for Me; Homework for You
I’ll be visiting the Galapagos Islands and Ecuador for the next couple of weeks . I hope to return a more evolved human being. It’s unlikely I will post anything until the end of March.
Your assignment, should you chose to accept it, is to answer one or both of two questions. Your answers can be shared here or kept private. They are:
1. Since economic growth requires an input of oil, does Peak Oil imply a zero global GDP growth rate moving to a declining GDP growth rate as net oil production declines?
2. If that is the case, when Peak Oil seems to be in view should investors sell their holdings of drilling and service companies and oil sands companies, even though an increasing price of crude will cause such companies’ earnings to grow substantially regardless of the the global economic growth rate?
Tags: energy investments
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31 responses so far ↓
1 cleanenergyeng // Mar 12, 2008 at 8:00 am
I dispute your premise in item #1, for the following reason: economic growth requires access to reasonably priced and accessible energy, not necessarily exclusively oil. My primary area of interest in the renewables arena is Ocean Thermal Energy Conversion (OTEC), with strong secondary interests in solar, wind and ocean current energy resources. I have noted, with some disappointment, that there is no mention of either OTEC or ocean current energy (think, the Gulf Stream off the coast of Florida) resources.
The OTEC concept has been around since the late 19th Century, was proved in the early 20th Century, and significant work was done in this area in the 1970s–during the oil price spikes at that time. More work in this area is being done now, with proposals for OTEC plants in the Caribbean, on Guam, and as a repowering proposal for Diego Garcia.
For the short term, I recognize that there is no viable substitute for oil; however, a concerted effort on our part could result in a relatively smooth, with only a moderate amount of pain, transition from our current oil needs.
2 cleanenergyeng // Mar 12, 2008 at 8:15 am
Regarding item #2:
I think continuing to hold drilling and service companies and oil sands companies will become more and more risky with time. As the cost of recovery and exploration increases, profits will likely increase initially; followed at a certain point, which is the crux of this issue–when is that point reached, where further exploration and development will be considered to be too high on the risk/reward continuum.
Another consideration in this area is: as a greater fraction of our energy supply is provided by renewables, society will be less willing to accept the environmental and health damage caused by our use of fossil fuels–and the concomittant reduction in fossil fuel demand will reduce oil profits, particularly in those most difficult to extract and refine products.
As an aside: my background is as an operator of nuclear power plants (which I do not favor for commercial power production) on submarines, and as a Merchant Marine Engineering Officer (I sail on oil tankers, product tankers, container ships, Ro-Ros (Roll-on — Roll-off), and military cargo ships).
I also have an engineering degree (B.E.), with a double major in Naval Architecture and Marine Engineering.
3 Thomas Stone // Mar 12, 2008 at 12:44 pm
1. Global average standard of living is directly coupled to per capita energy consumption. Similarly, GDP growth is approximately double the oil consumption growth. Absent any alternative high density energy source being discovered prior to oil peak, both negative worldwide GDP growth and declines in global stands of living are inevitable. This does not require or suggest that the pain will be evenly distributed globally. I suspect that the majority of the pain will be felt by those in the 3rd world countries where standards of living are already very low. These are exactly the people least capable of bidding for the energy supplies that are available.
2. Just as the pain of the decline will not be evenly distributed, there will be massive flows of wealth due to the economic slowdowns (worldwide depression) resulting from sustained declines in global oil production. Energy will become the currency of choice and those that own the currency or make the production of the currency practicable will reap the rewards. This makes anyone sitting on oil deposits (like oil sands) or making the extraction of oil possible (drillers and other service companies) the beneficiaries of the transfer of wealth.
4 Simon // Mar 12, 2008 at 3:32 pm
A massive wealth transfer has already occured. The money counries are now the oil nations and the saving nations. They will want to invest. They will invest in new energy industries and commodities. Lots of electric motors will be built. Copper is a very good thing to invest in long term.
5 K. Vora // Mar 12, 2008 at 4:27 pm
I read an article on Canadians wanting to pass some law in the US before Bush leaves so that they can go on exploiting oil sands at high polution levels. This is the achillie’s hill post peak oil. This is also true of ethanol until we find processes for celulose conversion to ethanol. Even then, bio-disel would be more attractive as celulose waste can be processed as feed, actually high protein, high fiber feed, for aquacultured fast cycled foodstuff. But who knows, we might mine Titan and send frozen methane through space for energy. Only concern is that we will run out of oxygen. Enjoy your trip and hope you come back with some innovative ideas as how to enhance our life while consuming less energy.
6 Mike Krebs // Mar 13, 2008 at 10:39 pm
1. Short answer - not necessarily. Using today’s hydrocarbon paradigm, it is hard to project anything but a declining GDP post peak oil. Yet somehow I just don’t see how we can discount inevitable technological progress that will deliver currently unforseen advances that would partly substitute for oil and protect our standard of living to some meaningful degree.
2. Here I generally agree with Mr. Stone in #3 above. While there will always be risk in holding any type of equities in a major global meltdown, oil will become a defacto global currency post peak oil. Which nations will prosper is largely irrelevant to investors with access to global markets. I want my wealth denominated in a global currency (oil) where the strongest economies have first dibs on what I own. To that end I tend to favor the oil sands type investments (own the oil in the ground) but I see no harm in also owning some of the sophisticated drillers who will have the technology to access hard to access oil and the pricing power to charge for their services. I have a hard time envisioning a scenario where equity ownership of high demand/short supply commodity is a poor investment.
7 Keith Renick // Mar 17, 2008 at 1:16 pm
I enjoy logging on to this very smart website and reading comments by very, very smart people. People much smarter than me. Have you ever met a person too smart that they can’t understand something simple and common? Let me offer some common thoughts from a simple person. 84 million barrels of oil per day is a vast sum of liquid fuel. There is a lot of oil in the world. There are just too many people who need it. When I frist went to Saudi Arabia in late 1980 there was 4.4 billion people on the earth. Now in 2008 there are about 6.7 billion people. The world’s population is growing by about 80 million people per year. We can talk about peak oil, alternatives, we can talk about technology saving us but all of this talk is like putting your faith in the tooth fair. Population growth, immigration, urbanization, global population aging, global tourism, vast amount of consumption will outstrip our ability to solve peak oil. All of modernity is about digging something up out of the ground and buring it or burning something in big machines to dig something up out of the ground to melt and smelt something into something we want to buy whether we need it or not. You might be able to define civilization in one word. Digging! This problem is a liquid problem that won’t be solved by the sun or the sea. Yes, the sun and sea and wind will help but they will not be able to off set declining liquid fuel. Come to Peachtree City. This is a special place designed with 90 miles of golf cart paths. You can go anywhere in Peachtree City on a golf cart. Not that this will solve our problems but I do drive my car less. The other day I was on my golf cart going to Kroger’s supermarket and noticed a fat lady parking her big SUV and watched her as she went into a place to do her finger nails. I went on the Kroger’s and after buying 4 small pork chops for $7.89 and one pound of hoop cheese for $9.93 per pound and one gallon of milk for $5.18 per gallon. I gave up and loaded my golf cart and now notice the fat lady finished her nails and was making her way on chubby hooves to Ross Department Store. She represents civilization as we know it. What a waste. She has consumed a lot of time, energy and money and at the end of the day she’s still ugly! And truth be know, she’s still not satisfied. Before you write me off as completely crazy, I have spent a lot of time in North Yemen and the Philippines. Go to these countries where per capita consumption of oil and other forms of energy are extremely low and you will find people living in tin and cardboard shacks picking through garbage dumps. Peak Oil is a liquid problem and it means a decline in GDP. The population of the Untied States will grow another 100 million people by 2043, there is no alternative energy source that can cope with this fact. Regardless of engineering and economic theories, alternatives will not be cheap and a vast number of Americans will not be able to afford them. Studies I’ve read have suggested a 30% drop in GDP by 2030. In 1993, 130 million people worldwide made their living via tourism industry. 84 million tourist per year fly or drive to Florida alone! Peak oil is a liquid problem that has to do will volume. It will reck global tourism and agriculture and make life more unaffordable for billions of people. GDP will decline not only because of energy but because of demographics. The more important question never asked is not how much oil is left and when it will start to decline…..but how will we use the oil that’s left and who will get to use it for what? Will we still get our nails done and fly to Florida to see Micky Mouse? These are questions that politics, markets and alternatives can’t answer. You can look for a future in which there will be (1) a great decline in personal mobility (2) declinging personal choices and (3) the decline of convenience. GDP is about energy, but it’s also a mood. When number one, two and three kick in, fat ladies won’t drive to get their nails done and I won’t be able to afford pork chops. Regards, Keith Renick, Project Materials Specialist, Riyadh Refinery, Saudi Aramco Oil, Ret.
[Site administrator’s note: The above comment was inadvertently removed while Mr. Kingsdale is away. Apologies for any confusion.]
8 Jack Miller // Mar 20, 2008 at 11:48 pm
I think GDP is largely releated to oil. However advances in technology could slow down the decline in GDP due to Peak Oil.
I wouldn’t sell right away but at some point drilling companies won’t be producing anything.
9 Jack Miller // Mar 20, 2008 at 11:49 pm
By the way, this site is sensored. So if you disagree with the site owner, don’t expect your post to stay up.
10 Jack Miller // Mar 21, 2008 at 12:18 am
Please be advised that Mr. Kingdale himself may be suffering from stock shock.
11 mekats // Mar 21, 2008 at 7:45 am
Peak oil implies rising cost per unit which sets up a conflict with the developing economies who are less efficient in their energy per $ of GDP and often subsidize the energy cost inputs into their economies. Either they taper off this subsidy model or cede GDP growth share to the developed economies who are better able to absorb the higher energy inputs cost per unit of GDP. Not sure peak oil implies zero GDP growth but sure implies decelerating GDP growth. For the US it would seem to imply that any energy intensive industrial users of oil/energy would be offshored unless transportation costs were prohibitive.
Regarding investment consequences, hard to imagine politicians would resist the populist urge to “do something” about high energy prices. Investors would discount this negative prospect. Would expect frequent reference to energy/oil being too strategic to be left to the vagaries of the free market.
12 David Lundquist // Mar 22, 2008 at 12:07 pm
Have you read “The Long Emergency” by James Howard Kunstler?
13 K. Vora // Mar 23, 2008 at 10:16 am
First a link to a book, whether one agrees with the author or not. (I do not agree with the author.) http://www.nytimes.com/2008/03/07/books/07book.html?_r=1&oref=slogin
There was an noted article in SciAm about methane vent in the sea, and methane was supplied by earth’s mantle. That is, our hydrocarbon resources are nearly inexhaustable, except that we will have O2 crisis, as well as CO2 driven greenhouse. Furhter, Venunzula alone has nearly a TRILLION barrels of heavy oil, not used due to high sulpher content. Peak oil is a myth: what is true is cheap oil is finished, and this opens alternatives for our mobility efficiently. If we legislate out of oil based economy to something more peaceful, it would be good for all humans and other life on this planet. Ultimately, we decide what will be economically alowed. Just take a look at hemp. People still get high on the gras, but we can’t produce a most economical fiber.
14 Keith Renick // Mar 24, 2008 at 3:40 pm
Hi Friends! After reading several comments I am more sure than ever that I am from another planet. Before my friendly rant let me tell you I made a 37% total return on a six figure trading account in 2007. That doesn’t make me smart but it does make me smarter than the guy that made 36%. I’ve been trading for 30 years and I’ve never seen anything like this opportunity to make money. Again, I say this is a liquid problem. I think many people don’t understand scale. We’ve got about 216,000,000 American cars in the USA burning over 400,000,000 million gallons of gasoline per day. I don’t know of one person that wants to give up his car or stop flying. Alternatives? The people who believe in Alternatives might also believe that ad that ran on TV a few years ago that told Americans, “Pork, the other white meat.” Most Alternatives won’t scale. If gasoline demand is growing at 1.2% per year x 400 million gallons per day x 365 days per year…..what are you going to burn in your cars in 2025? Black Cherry Kool-Aid? Yes, we can tar stand, CTL and GTL but if you look at the numbers all of these together can’t keep up with the demand. Good data, and hundreds of technical papers out there point to the real fact that by 2025 North American Oil will be 85 to 88% depleted. North American Natural Gas will soon follow between 2025 and 2028. Do you really believe our car population will continue to grow? 200 million, 250 million, 300, million and someday we will need 600 million 700 million or 900 million gallons of some liquid per day to run all of these things? It won’t scale! Panic time is not here yet, but when it happens, money will be pouring into drilling, solar, wind and many other areas. Yes, we can make money but we might get punished. Governments are not afraid of smart people who make money. They are afraid of the losers who will suffer and might riot. I am old enough to remember pushing my 69 Mustang to the gas pump in the first oil crisis. I will never forget a gas station in Memphis, the Pac-n-sack on Park Avenue. The sign said “Gas for Silver only!” The owner wanted only pre-1964 silver coins for gas. I never forgot that. I started buying silver coins 2001. I still do. There will be a massive drilling boom when the panic hits and before it’s over we will drill everywhere regardless if it is smart or not. Just follow the rig count! My concern is how long will foreign governments export and how long will they take paper for oil? I’ve exchanged several emails with Mr. Kunstler. He really is brillant. I’ve also exchange emails with Andrew McKillop and David Strahan. Please read their books. Also please read Beyond Oil, John Gever and one of the best, Oil, Jihad and Destiny, Ronald R. Cooke. My last thought is Ammonia. I think there is some type of modified Ammonia as a liquid that can scale and can be burned in a car motor. Regards, Keith Renick, Project Materials Specialist, Saudi Aramco Oil, Ret.
15 Peregrina // Mar 25, 2008 at 5:56 am
Mr. Renick- could you e-mail me privately, as I’d like some more detail and references, if you have time. pwuff_50_2000@yah…
?
If not, thanks for your thoughts.
Paty Peregrina
16 k. Vora // Mar 25, 2008 at 7:35 am
Mr. Renick, please consider supply and demand a bit. You know that nearly 90% of cars carry one passanger, and nearly 70% of driving is for commuting. If I compute correctly, half of the current gasoline demand can be eliminated just by car-pooling. You can figure out a scenario where people will go on internet and figure a ride. Nearly all cars will be replaced within seven years with 50% improved efficiency and nearly 100% improvement thereafter, and as gas prices go up, other means to fuel a car will be competitive and you already see changes in the air. Short term hybrids, long term electric, and changing and improving how we work and play.
We have a glass half-full, half-empty scenario.
The real problem is the short term impact on our economy if we stop making and selling 6000+ Lbs cars. We need a massive Govt program to automate highways, railways, and local commutes so we can move. Mobility has become the right of our culture and we have to figureout how to maintain mobility at lowest possible energy cost.
17 Keith Renick // Mar 25, 2008 at 1:13 pm
Hi K. Vora! I liked your very helpful and useful comments. I think our society and country will try to do many of the things you suggest regardless of the logic or effectiveness. When W.C. Fields was on his death bed, someone caught him reading a Bible. They asked him “Do you believe?” He said “No, I am just looking for loopholes!” I have spent 7,000 man hours in the last 6 years looking for loopholes. I can’t find any. At 18 miles per gallon I keep my Ford winstar parked and drive my golf cart. Give me a car that gets 80 miles per gallon and I will increase my miles per year driven 500%. It reminds me of a retarted dog I had in 1958. His name was Yippie. He would spend hours chasing his tail and then bang his head on the closet door and vomit and start chasing his tail again. Our society is like Yippie, we are chasing something we can’t catch and vomit time will be later. I recently found a website that tracks live births, deaths, and immigration. The net result is that we add one new American to the population every 30 seconds! Again, 100 million more Americans by 2043. That’s a lot of car pooling! I am grateful to the Author Jeremy Leggett who wrote “I was highly selective as the consequence with the information I allowed onto my radar screen.” Bells went off in my head. People can’t or will not imagine things that they don’t want to happen. A great free resouce about transportation can be found in the Hirsch Report starting on Page 22. Page 24 ” We cannot conceive of any affordable government-sponsored “crash program” to accelerate normal replacement schedules so as to incorporate higher energy efficiency technolgies into the privately-owned transporation sector; significant improvements in energy efficiency will thus be inherently time-consuming (of the order of a decade or more). Page 25. Any transition of liquid fueled, end-use equipment following oil peaking will be time consuming. The depreciated value of existing U.S. transportation capital stock in nearly $2 trillion and would normally require 25-30 years to replace. Oil peaking will likely accelerate replacement rates, but the transition will still require decades and cost trillion of dollars. ” It will cost trillions of dollars to replace all of the cars and trucks at a time when 76 million boomers will be expecting trillions in pension checks, social security checks, and Medicare while our net population grows at one new American every 30 seconds. Then after this, we need trillions more for rail and mass transit? Please note on page 64 of the Hirsch Report, # 4 The Problem is Liquid Fuels. I think you are 100% correct when you said “it’s a birthright.” People believe this. You are also very correct when you said something about how we work and play. How we work and play will change in ways we can’t imagine. My Great Grandaddy Renick was a little boy during the Civil War and was born before the first oil well was dug in America. When my Grandaddy Renick was born there were only 8,000 cars in America and less than 142 miles of paved high ways. When I was born there were only 150 million Americans and no U.S. Interstate Highway system. When my mother died from brain cancer, she wanted to die at home. Many nights I would stay up and hold her hand. Sometimes she couldn’t remember my name but told me a story about when her Grandfather died,Thomas Jefferson Crouch (1855-1936), the day he was buried it was raining so hard the old trucks could get up the muddy roads. My mother watch her brothers as they built a pine box, hitched up the waggon with the most reliable mule and put Mr. Crouch in the back for the 3 mile drive to the cemetery in a cold rain. I can vividly remember my Grandaddy ploughing with a mule. I have fond memories of all of my Grandparents. They didn’t even have electricity until 1963! No indoor toilets, no Air Conditioning, no central heat, no running water. We had a pump house and an outhouse. No telephone, no TV and people would sit around and watch a battery powered radio! They lived happy lives with very little oil. Do I want to live this way? No! But if there is no choice I think I will do it well and find a way to keep my family fed and happy. I think 98% of the public has it backwards. I am not a doomer because I will plan to keep my family fed and happy, even without oil. The doomers are the ones who believe everything is lovely and we will just tweek a few things and life goes on the way is has and we can keep all of our toys. Last thought, you will appreciate a very smart free paper by Clifford J. Wirth. Go to http://www.peakoilassociates.com and print out Peak Oil: Alternatives, Renewables, and Impacts. Good Luck! Keith Renick, PMS, Project Management Team, Riyadh Refinery, Saudi Aramco Oil, Ret.
18 K. Vora // Mar 26, 2008 at 6:51 am
Keith,
Yesterday (3/25/08), on Charlie Rose show, retiring Royal Dutch Shell US CEO was on. Here is his take: (1) we have trillions and trillions of barrels of heavy oil, and we are not running out of hydrocarbons, we are running out of cheap hydrocarbons; (2) global warming debate is over as global warming is happening now; (3) increased efficiency and alternate sources for energy is must for the nation; (4) we live precariously especially in the cities for energy supplies and political unrest including riots are not unrealistic as we make two class society – those who can afford impact of high oil prices and those who can’t. It is my take that his punch line is that energy is world survival problem, and has to be tackled beginning with us.
Here are a few comments on your long notes:
a). The argument for driving more with fuel efficient cars is based on hedonistic behavior intrinsic in all of us. If the cost of driving is based not only on the fuel, but the use of infrastructures, you would not drive 500% more, as free ride disappears. If SUVs were taxed exponentially for the weight of the vehicle, you would not seeing them on the road; or if they were not classified as trucks, you would not see them on the road.
b). We seem to focus on the hard life man lived in past, but we forget that in historical and evolutionary context, the quality of human life has improved, except in times of wars. If we continue on the path of war that current administration has chosen, we are doomed, but in historical time, it will be a glitch, and in worst case scenario, we may lose half or more of the world population (still 3 billions of us will be left). If we begin applying what we know, and engage in search for better way, we will prosper.
c). My take is simple: we need to apply our ingenuity to create new markets and life style that preserves mobility while eliminating daily drudgery of driving to work.
Best.
K. Vora
19 Paul // Mar 26, 2008 at 3:09 pm
Thanks for the stimulating assignment:
1) It would appear that global GDP can grow in line with increasing “energy productivity” as measured in output per unit of energy. Giant improvements are possible, so why should there a limit to GDP growth ?
2) It may become increasingly difficult to profit from energy investments. Once peak-oil severely impacts the lifestyle of a majority, profits of energy related companies will be “regulated”. Long dated oil futures are no solution - they will be outlawed for “speculation purposes”.
Keith: Your peakassociates reference is interesting reading, but far too static and onesided. Take their statement that “licensing and building nuclear power plants is at least a decade long process”. That’s true now, but after a few power outages this can be condensed into 4 years. How long did the Manhatten Project take ? And that had to solve unknown unknowns, powerplants involve known knowns. And it’s not true that cars need conventional “liquids”. It costs only $2000 to convert a car to bivalent petrol/compressed natural gas mode (or probably adds $1000 cost for factory equipped dual fuel ability)
And you don’t need a dense compressed gas infrastructure, as these cars also run on petrol. So there are ways to postpone a real crisis. However, it is true that the unique time in history is over where (for a minority of mankind), natural resources were unlimited and cheap. As Mervyn King (UK’s Ben Barnanke) recently said: “Higher energy and food prices represent a genuine reduction in our standard of living”
20 Keith Renick // Mar 26, 2008 at 9:52 pm
Hi Paul! I have always been completely amazed how England produces some of the finest minds in the world! Check out a paper “After Oil” by David Fleming. You can find it at http://www.feasta.org. also look at his references at the end of the paper. At this minute I can’t find my copy of one of his latest books, but it’s about what peak oil will do to the world economy. I got the book from AmazonUK.com. If you ever run into Paul Squires, Formbe, Teeside, England tell him Redneck Renick says hello. We worked together in Jeddah, Saudi Arabia in 1982. Cheers! Keith
21 paultaut // Mar 27, 2008 at 1:24 am
Coal is a viable alternative to oil as a power source. Though very expensive, coal scrubbers are available.
If needed, EPA standards will be suspended while technology scrambles to clean the generated gases from coal usage.
At the same time a shift to all electric vehicles to replace gas/hybrid gas can evolve.
The electrical grid needed to handle the power another 50-100 coal plants would generate is not in existence nor does one exist which can handle drain of 200-300 million electric vehicles.
Infrastructure must become a National Security issue.
Lets cover our desserts with Solar panels…electric problem solved…nope problem created…how can you blanket the entire country from a central location.
My head hurts just thinking about it.
Personally, I think we should just annex Canada, forget about the wildlife and go beserk with oil sands projects.
22 Keith Renick // Mar 27, 2008 at 2:00 pm
Hi Friends! This week I bought shares of FMC Technologies, ticker (FTI), the shares are cheap and I think will split and keep going up. You can’t do big underwater deep drilling without (FTI), Buy at market. Better below $60 per share. I bought 2,000 shares of Silverstone Resources at market. Ticker SVRCF. Look at the above ground and below ground global silver reserves and you will find we have a 14 year supply of silver. It’s getting used up in industry. You can only dig something up once. I also bought 3,000 shares of ticker (CDE), @ $3.89 per share this week. By 2010 they will become the largest silver producer in the world. There is only around $20 billion dollars worth of silver in the world and soon everyone will realize they need some real money. I also bought 40 Frankilin Half-Dollars 1948-1963. Average good 90% silver. Also bought 40 Walking Liberty Half-Dollars 1937-Dollars Average Good, 90% silver and 40 Washington Quarters 1956-1964 average good, 90% silver. The other peak oil investment I am looking at is Cotton. Farmers are planting too many beans and corn and cotton is getting planted less. Also Textile and fiber manufactures are also beening hurt by the high cost of oil so it seems they will start using more cotton. I not an expert in buying these futures but cotton is something to look into. Peak oil has come to Peachtree City. My wife is the ByRequest Manager at the Wyndham Peachtree City Hotel and Conference Center. They have always had fortune 500 companies coming here for conferences. Many have cancelled for 2008. The reason? The high cost of Air travel. The hotel has laid people off and cut hours. They also cut the Security Contract and 3 security guards lost their jobs. So even when oil is cheap at $107 per barrel and gas is cheap at $3.20 per gallon people here in Peachtree City are getting laid off and some of losing their jobs in a little town of 40,000 people. It’s time to make some money! Happy investing. Regards, Keith, Aramco Renick
23 K. Vora // Mar 28, 2008 at 6:52 am
Suddenly, we seem to run out of all commodities - including oil, gas, and even clean coal - and precious metals. It is like demand went up ten fold or supply decreased by ten fold.
All this is happening since 2003, before that we could buy even expensive jewelry at dirt cheap prices. What a world!
24 Keith Renick // Mar 28, 2008 at 9:53 am
Hi friends, this A.M. I bought shares of ticker (PBR). Also Shares of Cameron International ticker (CAM). Cameron has a drilling division and sells production systems, compression systems , valves and they also develope and sell flow equipment products. If you are doing any deep water drilling, this is a nice stock to hold. I bought both PBR and CAM at market. I don’t own Southern Copper but it might be worth owning because of a metal that’s a copper by-product which is molybdenum. Molybdenum is very important for the oil industry because it’s the very, very tuff stuff that makes steel pipes, flanges and other thing very hard. I don’t know of a pure play in molybdenum but it’s becoming more important. Make some money! Happy investing. Keith
25 Keith Renick // Mar 28, 2008 at 12:43 pm
Hi friends, This afternoon I sold Silver Standard Resources (SSRI) for a 93% return and Marathon oil even. I sold Valero (VLO) at a 36% gain. I wouldn’t hold these stocks for 2008. There are just better places to be. Mr. Kingsdale has a great site and I enjoy all of the interesting comments posted here. But I must tell you one truth regardless if you believe it or not. Heavy Sour is crap! Tar Sands are crap! It feels good to say “We have one trillion barrels of heavy sour and tar sands.” Yes, heavy sour and tar sand will get developed. Because people say “we have one trillion barrels of heavy sour” they are mistaken to believe that means we have a trillion barrels of oil. We don’t. What’s important is how much of that trillion barrels of heavy sour can be produced. Ask any oil field roughneck and he will tell you heavy sour is crap! If you have one trillion barrels of it, you have one trillion barrels of crap. If you have one trillion barrels of crap you will be very, very, very lucky to produce 650 billion barrels of it. You can’t compare top of the line T-Bone steak to Vienna Sausage. Vienna Sausage is not an alternative! In regards to silver, it is also used in some solar applications. If you look at page 4, 5, and pages 9, 10, and 11 of Peak Everything by Richard Heinberg, world Grain Production has peaked and flatlined. World Diadromous Fish Catch has declined. Worldwide Arable land per capita has flatlined, Worldwide fresh water avaibility per capita has declined. Worldwide production of Gains peak in 1997. Uranium, Fresh water, wild fish and some metals including copper, platinum, silver, gold and zinc will go into decline in this century. His resources are the EWG. IEA. World Resource Institute, UNESCO, Earth Policy Institute, Food and Agriculture Organization. Photovoltaic panels require crucial materials like gallium and indium and if I am correct the USA imports 95% of it. These two metals we are depleting quickly. Water tables are falling all over the world. I believe the overdraft in the USA is over 30 billion gallons of fresh water per year. I worry more about water than oil. The oil business requires a lot of water. I don’t know anything! I just look at the data. I understand measurements and charts. I don’t argue with 5 plus 5 = 10.
I don’t like Richard Heinberg very much but his data is rock hard. If you know what’s likely to happen, we can invest wisely! Regards, Aramco Renick
26 K. Vora // Mar 28, 2008 at 2:58 pm
Keith,
The same rednecks used to say alternate energy was a crap when oil was below five dollars a barrel. Same was true for gold mines that produced gold at about an ounce of gold for a ton of dirt.
Royal Dutch retiring CEO said that we have trillions (which is way more than a single trillion you talk about of) barrels of heavy oil. Crap becomes gold when there ain’t nothing else.
Would you like to consider setting up your own website so that many good ideas you propose can be followed up as a thread, and not get lost as jumble?
27 Keith Renick // Mar 28, 2008 at 3:48 pm
Weeeee! We have trillions and trillions barrels of oil left! Let’s Party! Have a great weekend guys! Best Regards, Keith
28 K. Vora // Mar 28, 2008 at 9:02 pm
Keith,
May be with all your profits, you can afford to go Charlie Rose’s website and buy the DVD or download the show where Royal Dutch CEO was interviewed and call him and tell him about your crap, and how hard it was for you grandfather to be pulledby mules after he was dead. He might even contribute to your website.
29 Keith Renick // Mar 31, 2008 at 5:02 pm
Hi K. Vora! I am not surprised at all to read your rude and uncivil comments. Maybe it’s your nature try to be deliberately unkind? Yes, I know you like Charlie Rose and his televesion show. This is the thrid time you’ve told me about Charlie Rose. What you obviously don’t know is a few years ago Royal Dutch got caught cooking their books (they lied and got caught) about their reserve numbers and their reserve replacement ratio. Their stock dropped and shareholders got spanked. If Royal Dutch can’t tell the truth about their reserves, why would I want to sit around and watch them on Charlie Rose TV? Yes, I get your point. You like Charlie Rose and you get your information from TV. It’s fine if that’s what you believe. That’s your right. You’ve given no stock picks, no investment ideas, you haven’t suggested any technical data or referenced any scientific papers. Your biggest ideas are that cars are a birthright and we can just all car pool with strangers we met on the internet. That’s fine if that’s what you believe. I am not angry at all about ideas or your comments. If your not interested in stock picks that’s also fine. The reason I talked about money and how much I made was an effort to help you and others pick stocks and make money too! Why would anyone get mad about making money? I have no interest in trying to make you angry or try to hurt your feelings. Why would I want you mad? It’s pointless and a waste of my time to agrue with anyone who has never worked in the oil business and wants to be mad and provoke hard feelings. If I have said anything in the past that hurt your feelings I am truly, truly sorry. You can respond to this message with hateful impolite comments but it won’t be read. I sincerely wish you and your family well and good luck with your investments. Bye Bye and God Bless, Keith
30 K. Vora // Apr 1, 2008 at 9:28 am
Keith,
Here is an example of rude and uncivil comment:
Weeeee! We have trillions and trillions barrels of oil left! Let’s Party! Have a great weekend guys! Best Regards, Keith
It is by you.
Now, see if I can help you figure out what you wrote:
RD CEO is in news, and Charlie Rose talks to people without commercials, without props, nor unnecessary camera angles, or it is a place of exchanging ideas, which I really think would help you.
If you question RDS for their reserves reporting, that is good, but numbers, how many years ago, by many trillions of barrels etc.
If you would look at the title of this website, we are talking about strategies in investing in energy. Even Jim stops at five or so of his investments as he does not want to advocate a particular company, but a strategic investment thesis. Being a thesis, it is always under critical assessment. If you want investment ideas, go look up master limited partnerships and decide to invest or not invest, and then you might want to share why and why not by posting. How does it help the readers how much you made on an investment, except your bragging rights?
Now about cars: Tesla Motors is introducing all electric car, which goes to 60 mph in four seconds, it is about $100K, and surprise: it cost 2 cents a mile to drive, while a car might cost 15 cents to drive.
Our mobile culture is not going to change, and likelyhood to find cheap oil in future is low, hence, oil is expensive. Heavy oil exists in abudance, and we are not running out of hydrocarbons, however, it is going to cost a lot, and alternative approaches will govern.
By the way, when you take a flight, you seat next to a stranger without any quams, even though you know next to nothing about him/her/it.
Finally, beside God, there is prozac other stuff that also give good vibrations.
Enjoy.
31 Gregg Archibald // Feb 6, 2010 at 7:31 pm
Keith, I would be very interested in speaking to you off-line about your comments. Feel free to contact me at greggarchibald [Email address: greggarchibald #AT# msn.com - replace #AT# with @ ]. Yep, one and the same.
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