Daily Oil Blog

Some disturbing facts for the elderly in the not so distant future rewards for eating oil all their lives.All of us know that most working adults in their twilight years will not have much savings to last them till their demise.Many of you will ask why blame it on oil..well the oil factor has give men the opportunities to outbreed themselves yet created an economy not sustainable enough to see them thru the retirement years.The impact on fossil energy has always been a major factor in our monetary system worldwide though not much information has been talk about their close relations.And so speed of our technology march thru in a merciless way in our oil backed technophile world and a false sense of progress directing growth leading us to nowhere but fear of the unknown.

Some countries that is pushing on pension reforms:

Japan
-World’s fastest aging population with 26% of it 127 million poplation over 60
-Workers can retire at 65 but most like to work longer
-Pension system is complex and slow to change, and employers do not want older workers

United States
- Popular Social Security state pension system resistant to change
-Workers in employer-sponsored pension schemes like 401(K) rarely diversify their investments
-Companies encourage low savings in 401(K) so they won’t get balmed if investments go bad.

Singapore
-Has one of the world’s fastest aging population
-Workers are asset rich but cash poor risk averse and slow to invest in their CPF fund
-From 2012.there will be laws to make employers re hire older workers

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Hi guys, I’ve been thinking and doing some research over the direct investment of Tar Sands And I would like to share some of the main points in regards of this big energy project in Canada.

“The Law of Receding Horizons”
This is a simple concept :as the costs of energy rises,the cost of everything else made with energy like building materials also rises.So an energy project which was expected to be profitable when energy costs were x amount higher than today , turns out to be still uneconomical when you get there.

The urgency to produce the tar sands due to impending decline of global crude has led to
skyrocketing costs.The real profits in producing tar sands seems to be in government tax breaks rather then the resources itself.

The whole Tar Sands operation will cost about $117 billions by 2015 according to oil analyst woodmac.

Cost Inflation

WoodMac analyst has warned about Tar sands profitability given the control of oil companies capital expenditure going forward to ensure that it will stay in the money.So
what’s the inflation culprits.

The usual ones are lack of manpower and cost of materials.There’s a lot of talk about productive practices in the scope of project management and contract schedules will help keep costs competitive.It’s true that one must keep a watch over the labour hours when your riggers and engineers are pulling over 6 figures pay.But this is not going to help much as the hardware and commodities are going through the roof as demands from Asia increase & also with high oil costs.

This is just doesn’t look like a good investment play given the high cost and low percentage of finding and producing oil in the tar sand regions and that’s why I advised readers to invest in supporting industries which is a less risky bet.

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The oil crisis in the next decade will no doubt give investors a good chance to look out for potential natural resource stocks and one of them is the canadian tar sand market.
Production from the tar sand in Canada is said to grow 5 times within the net 10 years.
However one need to realize it take energy to produce energy.
Don’t forget Oil companies use more than 600 mill cubic feet of natural gas per day in their operations.Think of what they need when production double.Triples!
This provides investors a chance to invest in new technologies like nuclear or others that will replace natural gas in the process.I believe that though new devices can assist in the development of potential energy sources.It ultimately cannot replace the Tar sands and oilfields.Energy must come from somewhere, it cannot be made out of thin air!
We can blame the OPEC, governments for the high oil prices but this leads to nothing.Might as well to invest and cash in on this window of opportunity.I know that the environmentalists will not be pleased about the ecological effects from the mining and processing of tar sand in Alberta but seriously it’s about jobs and economy that will sway any major decision in regards of the exploration.People tend to be more focus about the energy and financial returns rather than mother nature , that’s where big oil giants will be providing.
My advice for investors is that do not invest in tar sand directly but the peripheral industries that will be supporting it.This is a safer bet

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Canadian oil sands stock bargains?

The Canadian Athabasca Oil sands, home to more than 300 billion barrels of oil trapped in the unique sands of the region, are currently producing about 1 million barrels of oil daily, and that number is expected to climb up to 2 million by next year, and climb substantially from there, with 2015 estimates calling for a daily production of 15 million barrels of oil per day.

The problem with the oil trapped in the sands is that the man power and expense required for the extraction of a barrel of oil is hugely more costly than that commonly seen with underground oil reservoirs. To compare the two, a barrel of oil produced in Saudi Arabia costs roughly $2 to produce, and an oil sands produced barrel is $15 or higher. Until very recently, when oil prices started consistently topping $40 a barrel, the oil sands were simply not a profitable place to extract the oil needed…but that has since changed, and US politicians have recently been talking up the possibility of getting most of the oil they need from their political ally to the north.

So what does this mean for investors, and is it a good time to jump on oil sands stock bargains? Maybe, although there are still a number of problems with the technology required to increase the daily yield up to an acceptable level, and one of the biggest drawbacks of the proposed extraction plan is both the massive amounts of natural gas and water required to heat and clean the sands in the extraction of the oil embedded within. It has been estimated that it requires 70 barrels of energy equivalent natural gas, just to get 100 barrels of crude ready for market. This has some environmentalists fuming, and wondering why we are burning clean natural gas at an alarming rate to extract dirty crude oil!

The political and corporate will exists to transform these oil sands regions into the domestic oil solutions for the next century, and as such stocks on the periphery of the oil sands industry seem sure to be a strong long range performer. Transportation and industrial support corporations in the province are sure to benefit.

But the biggest long term earners are likely to be any companies with access to the sands, and these companies have already seen price explosions, with a lot of room left before they hit their ceiling. The average oil sands stock has more than doubled in value over the last couple of years, and as infrastructures and development money continues to pour in, yields seem sure to grow.

Look at natural gas, oils sands stocks, and anything else needed to support the huge workforce that going to be spending a lot of cold winter nights in northern Alberta.

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With oil prices once again soaring to near record highs, consumers have been feeling the pinch when filling up…and with U.S. congressional hearings concurrently suggesting that the oil companies have been duping customers with less gas then they’re paying for, oil execs are becoming the newly reviled heads of industry.

The issue is called hot gas, and the problem is that as the temperature rises, the volume of gas increases, and the embodied energy in a liter, or gallon, of gas decreases. So if buying a liter of 60 degree gas, you’re getting a lot more fuel than you are when buying a liter of gas at 70 degrees.

Oil companies seem to be taking a dichotomous stance on their industrial policies, and it’s curious that they argue that although they need to buy and sell gas at the industry standard 60 degree energy calculation, they feel it’s not beneficial for gas to be temperature regulated for the consumer.

The average retail temperature for sold gas is 66 degrees, which doesn’t seem like a lot over the 60 degree industry standard, but testifying experts claimed that this slight temperature fluctuation meant more than $1.5 billion in extra oil profits last year in America alone, and a corresponding loss in governmental taxation revenues off of the untaxed gasoline.

Oil industry executives argue that the infrastructure and technology required to calculate the true volume of energy flowing out of the pump, and into your car, and adjusting pricing accordingly is too expensive; and will only serve to raise prices for the consumers. Industry watchdogs disagree, and the successful implantation of this technology in several countries, including Canada, leaves the oil execs position questionable at best, and many say just plain dishonest.

Nobody really seemed to care when oil remained below $40 a barrel, but with today’s prices approaching $80 a barrel, and oil companies announcing record profits, it’s good to see that government may take some positive action to regulate the cowboy mentality of oil companies seemingly determined to get away with whatever they can.

Oil prices have eased a bit this week, with OPEC announcing possibly pumping more oil in September in response to escalating prices, but no one sees a substantial drop on the horizon, and for the moment at least, consumers need to get what they’re paying for at the pumps.

Consumers are stuck footing the bill, and as always remain powerless to the moves of the oil cartels, and their seeming collusion against the consumer. Only governmental industry regulation can keep the oil companies honest, and save the consumer from paying too much for already expensive gas

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