Thanks to all who sent e-mail from our last post about soaring oil prices. From analysts, politicians and just about everybody weighing in, there are many opinions about the cause and ways to solve our dependency on oil. Here's my personal thoughts on some of the major causes of why oil has risen to all time highs
 . . . CT

For the past 20-25 years, this country has obviously neglected to find other sources of energy and fuel, and instead opted to stay dependent on foreign oil. Now we come to a time when as Thomas Friedman's book title "The World Is Flat" hits us squarely in the face.

This is a global economy - and the rest of the world wants what we have. We are no longer the driving force on the oil & gasoline prices worldwide. Even if we cut back on gasoline consumption - drivers in the rest of the world (China, India, etc) will continue to consume more gasoline. So the answer lies not just in finding more oil, the big pill to swallow is a real alternative energy policy.

While we have been living the "American Dream", much of the rest of the global world is catching up. They want the cars, homes and a lot of the technology we have become accustomed to. There are just not enough resources to supply the demand. Actually from my point of view they are falling into the same trap we now find ourselves - but that's another story . . .  

The facts are crude oil production has remained rather flat - while the need for oil continues to rise - especially from developing countries. The American dollar is at an all time low, and let me state once again that oil is priced worldwide in dollars.

Terrorist activity around the world can send oil souring at any time as we have seen in Nigeria, and threats remain throughout the Middle East. 

Oil speculators also have to be figured into the equation of the rising oil prices. Many institutions playing the market for their investors own far too many oil contracts - and when they announce oil price expectations - prices continue to rise. It's easy to control the price when you own most of the contracts!

And the war in Iraq has dramatically cut their pre-war production of approximately 4 million barrels per day to less than 2 million barrels per day. So in reality this war has also added to the reduction of the global oil supply - and I won't even go into what the threat of war with Iran will do to the world oil market prices.

But there's more bad news . . . Russia, the world's second largest oil exporter is having production problems. Russia's lack of investment in their infrastructure and many aging oil fields has led to their first production decline in 10 years.   

At the end of the day, it's all of us who pull up to the gas pump each week who are the losers. Obviously the elected politicians for the past two decades have not had the country or our best interests at heart. So, it's up to us to make changes in our lives, and try to ride out this economic chaos.

I certainly don't have all the answers, but I do know that we are facing a very bad economic time in this country. It's going to take sacrifice, and hopefully this time we will come out this with a new outlook on alternative energy - but it's not going to happen overnight. 

That's my take . . .

It seems like yesterday when many of us could not believe oil at $100 a barrel, but those days are long gone . . . CT

Oil surged past $140 a barrel after OPEC's president stated that prices could go well above $150!!

Just when we thought gas prices were at their highest . . . but oh no, it's gonna get worse

There are serious economic trouble ahead in the key financial markets, along with the automotive and housing industry. Today's oil surge has the Dow at the lowest point in almost two years. And we still don't know the fall-out from the mortgage crisis.

Then came the news that Libya will consider cutting oil production - and there's speculation that the Fed may not raise interest rates until later this year.

Many analysts are now in agreement that the rate cuts during the past year have further weakened the dollar - which have sent oil prices soaring since oil is priced in dollars.

We are in for a very bumpy ride folks - so we all need to try and get as much cushion as we can

From Filipino electricians in western Australia and Indian petrochemical engineers working in the Persian Gulf, to Latvian stone masons in Northern Ireland, the world’s labor force is on the move.

Globalization means that not only are companies are moving operations offshore to where there is cheaper labour – but workers are increasingly prepared to cross borders to find where the best jobs are.

Popular images of migrant workers are of the of the poor, the oppressed and unskilled. Yet according to Manpower, one of the world’s largest recruitment companies, they are more likely to be young, under 30 years of age, well-educated with university or vocational qualifications, and female as much as male.

This matters to employers who, according to Manpower, will increasingly be competing for workers, such as the managers at Irish meat processing plants “whose skilled Slovak butchers are being lured away by competitors in Norway”.

Unlike earlier migrations, today’s migrant workers are not on a one-way trip. Flights home are readily available. Irish emigrants began returning a decade ago as the economy of the “Celtic Tiger” boomed. Now, it is Indian professionals and Polish construction workers who are returning to seek new opportunities.

Competition for such workers is increasing. Even oil-rich Gulf states can no longer rely on a seemingly endless flow of cheap engineers and construction workers from the Asian sub-continent.

One Gulf company, for example, told Manpower it was “starting to miss crucial project deadlines” because it could not “import the skilled expatriate engineers and project managers it used to be able to get easily.”

Propelling labour mobility over the next few decades will be huge demographic changes, in particular the ageing and stagnating populations in developed countries. According to the United Nations, Italy’s population is expected to decline from 57 million to 41 million by 2050 while Japan’s is projected to fall 17% to 105 million by 2080.

Workers are also becoming more aware of their worth, with the internet providing much greater information on job opportunities at home and abroad, says Manpower.

Workers will also move within national boundaries to find work. China is currently struggling to accommodate “the rush of individuals leaving its poor western provinces in search of better jobs in the glittering commercial hubs of the country’s east coast,” it says.

Japan has also seen a huge population shift to its cities, imperilling its agricultural sector, while Norway must deal with the emptying of its rural north - and Mexico’s southern states contend with…a massive talent drain to the industrialised northern border states.

Employers who have moved offshore in search of cheap labour can get caught out, however, as local economies develop and other multinationals move in, competing for a limited number of skilled workers. According to Manpower, it is not unusual for workers at call centres in Bangladesh to attend an interview, accept a new job and start straight away at a higher salary all in the same lunch hour, says Manpower.

Read full article at FT.com

http://www.ft.com/cms/s/0/2ff92332-3ed2-11dd-8fd9-0000779fd2ac.html?nclick_check=1

Chavez Says E.U. Countries That Back Migrant Law Won't Get Oil   

Venezuelan President Hugo Chavez said he'll prohibit sales of oil to European Union countries that apply a new law approved by the E.U. parliament that allows undocumented workers to be detained. Chavez has also stated that Venezuela also won't accept foreign investment from those European countries.

Venezuela won't attend a meeting of oil producers and consumers this weekend in Saudi Arabia, and sees no need to increase crude output, the country's oil and energy.

Venezuela has no plans to increase its oil output, Minister Rafael Ramirez told reporters today in Maracaibo.  The Organization of Petroleum Exporting Countries doesn't need to meet again before its next scheduled event in September, and says that oil production levels aren't behind the increase in prices.

More news out of Venezuela . . .  

Chavez isn't content with nationalizing the countries oil - today he has formally taken control of the cement industry by decree, and has given three foreign companies 60 days to negotiate a fair price for their assets. Should they fail to reach an agreement, he stated Venezuela will start expropriating shares.

According to the decree, the government will take at least a 60% stake in the Venezuelan subsidiaries of Mexico-based Cemex SAB, Switzerland- based Holcim Ltd. and France-based Lafarge SA.

Chavez is using a windfall from oil exports to increase state control of the economy. Since the beginning of 2007, he has nationalized four crude oil ventures as well as the country's biggest telephone company and electricity provider.

Source: Bloomberg

SAN FRANCISCO - A few years ago, drums of used French fry grease were of interest only to a small network of underground biofuel brewers, who would use the slimy oil to power their souped-up antique Mercedes.

Now, restaurants from Berkeley, California., to Sedgwick, Kansas., are reporting thefts of old cooking oil worth thousands of dollars to rustlers who refine it into barrels of biofuel in backyard stills.

Some say it's like a war going on right now over used grease. More people are stealing grease because they have converted their cars to run on grease collected from local area restaurants.

Grease is transformed into fuel through a chemical process called transesterification, which removes glycerine and adds methanol to the oil, leaving a thinner product that can power a diesel engine.

Biodiesel can also be blended with petroleum diesel, and blends of the alternative fuel are now sold at 1,400 gas stations across the country.

As the price of diesel soars ($4.79 currently in Northwest Indiana), so, too does the value of grease.

In three years, the price of soybean oil, the main feedstock for biodiesel made in the United States, has tripled. Last week, a gallon of crude soybean oil fetched 66 cents on the open market, according to the National Biodiesel Board.

Those numbers have encouraged biofuel enthusiasts to plunder restaurants' greasy waste, and have even spurred San Francisco to get into the grease-trap cleaning business.

Drivers for Blue Sky Bio-Fuels, which manufactures bio-diesel for San Francisco's municipal program, often find their 300-gallon Dumpster outside the Oakland Coliseum nearly dry, despite the dozens of concession stands that dump there. Losses there alone have cost $3,700 in lost oil revenues in the last year.

In Kansas, Healy Biodiesel reports thousands of dollars in losses from used cooking oil heists from restaurants near Sedgwick, about 20 miles north of Wichita.

Standard Biodiesel in Seattle started working with police to try to catch fly-by-night home-brewers pilfering up to 30,000 gallons of the oil they collect from restaurants every month.

To manufacture the renewable fuel legally, biodiesel producers must register with the U.S. Environmental Protection Agency. Also, biodiesel consumers must pay the government taxes to help with road upkeep.
 

Source: Newsday

SELMA, Ind. — An Indiana man is capitalizing on high crude oil prices with his own oil well - in his back yard!

It comes from the Trenton oil field that fuelled growth in east-central Indiana more than a century ago. It costs about $100,000 to drill an oil well, but that at today's prices, it's worth it.

Losh expects to drill four more wells on his property in the town of Selma, northeast of Indianapolis. He says the oil is stored in a tank and transported to Ohio for sale. The well also produces natural gas to heat his home and several others.

This all began when he began drilling on his ten acre property for natural gas to heat his home and found it. "Let's see if we can drill for oil. If there's gas here, there's got to be oil here," Losh said. "So, we drilled 300 feet deeper to see if we hit oil."

A camera (pics at links below) shows where Losh and his fellow investors found oil, almost 1,300 feet below the surface. While he won't say how many barrels his well pumps each day, the $100,000 start-up cost will pay for itself in one year. The oil is pumped twice a day for 30 minutes into a tank, then it's sold.

Losh says his group of investors will drill four more wells nearby, confident that one of the nation's biggest oil fields in the late 1800's still has plenty of black gold. While he concedes that he's making money, he says there's another incentive for drilling at home.

"It's mainly that we don't have to depend on foreign oil. There's oil here, let's see if we can get it again," he said. "It's time to get our homegrown oil back to Indiana."

Related Stories, and Pics -

http://www.wthr.com/Global/story.asp?S=8348967

http://www.foxnews.com/story/0,2933,356606,00.html

http://www.tampabays10.com/news/watercooler/article.aspx?storyid=80715

http://canadianpress.google.com/article/ALeqM5gnCnM9N-WslQIEIrRXPoh1DdFc8g
 

Nigeria and Big Oil are engaged in a power struggle over profits.

The country is withholding nearly $1 billion from Shell, in a bid to re-negotiate existing profit-sharing agreements.

Shell states that 95% of profits from its joint venture go to the Nigerian federal government - but Nigeria believes that it has been shortchanged by the oil majors.

Shell also claims that the government is failing to come up with cash to deal with gas flaring from oil facilities.

Anger in local communities at the pollution caused by the gas flaring - along with the inability of local and national governments, as well as oil firms, to provide basic infrastructure in the Delta has prompted protesting youths to regularly invade and occupy vital facilities.

The latest invasion took place on Friday and disrupted production, which is running at well below capacity.

Source: Guardian UK - Shell's future in Nigeria in doubt