Search result

About Us Terms Invite a friend Bookmark Contact Us

Join Now Member Login

Search result

Tags - oil

Oil: the hydrocarbon the powers so much crazy talk

June 20, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

When people talk about oil, it turns from a hydrocarbon into a slippery metaphor for, well, just about anything.Consider John McCain, the Presidential candidate who is most sounding like he might kinda of support loosening of the bans that put oil off limits in this country. He’s trying to warm to the oil business but he can’t resist describing the international oil trade as a moral black hole. Consider the closing lines of his speech to oil people that he wanted to put up money for his campaign, as quoted by the Houston Chronicle.<a href="http://www.chron.com/disp/story.mpl/business/5843453.html">http://www.chron.com/disp/story.mpl/business/5843453.html</a>"In effect, our petrodollars are underwriting tyranny, anti-Semitism, the brutal repression of women in the Middle East, and dictators and criminal syndicates in our own hemisphere," he said. "We cannot allow the world's greatest democracy to be complicit in such corruption and injustice." And he’s not much friendlier to traders close to homeMcCain said some Wall Street speculators should be punished for artificially inflating the price of oil; Democrats said McCain's economic adviser, Phil Gramm, carried the legislation as a U.S. senator from Texas that allowed such betting on the price.Well actually it’s not such a recent invention. Farmers were complaining about the evils of the Chicago Board of Trade more than a century ago. So now in the country that has taken futures trading to levels never seen before in history, politicians are starting to sound like Mothers Against Drunk Driving. Consider this from the Oil and Gas Journal online report:    <a href="http://www.ogj.com/display_article/331947/7/ARTCL/none/none/Senate-Democrats-offer-flurry-of-oil-market-speculation-bills/?dcmp=OGJ.Daily.Update">http://www.ogj.com/display_article/331947/7/ARTCL/none/none/Senate-Democrats-offer-flurry-of-oil-market-speculation-bills/?dcmp=OGJ.Daily.Update</a>WASHINGTON, DC, June 17 -- US Sen. Bill Nelson (D-Fla.) introduced a bill late last week that would require all energy commodities to be traded on regulated markets. The measure, S. 3134, was one of four introduced last week by US Senate Democrats aimed at cracking down on energy price speculators. "Clearly, unregulated speculators have bid up oil prices to unbelievable and unacceptable highs. Congress needs to step in. We need to shine a light on all the participants and put an end to excessive speculation and any unlawful market manipulation," Nelson said on June 16. Perhaps they can come up with some sort financial breathalyzer test. Oil markets exist to bet on the price of oil in the future – a totally speculative notion – but please do so in moderation.

Tags: oil politics mccain presidential speculation moral

Airline deal spurred by high fuel costs might exile some frequent fliers

June 20, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

Well frequent fliers for oil companies may feel inconvenienced by Continental Airlines’ decision to join the Star Alliance with the likes of United Airlines and Lufthansa.  The switch is another move by Continental to strengthen its position at a time when fuel price shock is setting off mergers between long-time partners Northwest and Delta Airlines. In his frequent flyer blog in the Chronicle, Houston Departures, Bill Montgomery reports that the alliance switch won’t have any immediate impact on frequent fliers. If they travel on other carriers in the Skyteam alliance, like Delta and Northwest, they’ll still earn miles. But about a year from now, after the change to Star things could change.  His question for frequent flyers is: will Continental move  its first grade upgrade policy in line with United’s less generous standard.<a href="http://blogs.chron.com/houstondepartures/">http://blogs.chron.com/houstondepartures/</a>Right now Continental upgrades its elites when seats are available. Of course top-tier platinum fliers get the upgrades first, but if you're a silver elite flying at an off-peak time, you still have a shot at getting a seat up front. On United, elite members earn certificates when they fly and then can redeem them for upgrades.

Tags: oil politics mccain presidential speculation moral oil jet fuel frequent fliers houston continental united

Life, death and driver training in the oil business

June 21, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

In 2007 87 workers died while working for companies in oil and gas exploration according to companies surveyed in the latest edition of the Oil and Gas Producers annual study.So what’s this mean if you work for a big oil exploration or services company? Oddly enough, more drivers training is a distinct possibility.Overall the safety picture actually looks a little better in this survey – down 28 fatalities from the year before.Once again vehicle deaths ranked number 1, followed by the evocative category, “struck by.”The highest fatality rates, by far, were recorded in Africa and the Middle East. While other causes of death keep sinking, incidents of death while driving remains stubbornly high.Oh but worries are far less for those on the full time payroll. The number of full timers who passed totaled 11 versus 76 contractors.One caveat is that’s not likely the complete picture who deaths and injuries in the oil business. It covers 38 of the big players --- compared to 41 in 2006. Missing are some of the large national oil companies. In 2007 the death rate 3 dead per 100 million hours worked.The bottom line: with deaths due to other causes going down, look for oil companies to obsesses on this stuff. Driver safety programs will continue to spread. And the efforts may go beyond trainers telling employees that backing your car into the space at work is safer.Electronic monitoring of company vehicles to track things like driving faster than the speed limit, and the sudden stops and starts is also likely to spread. <a href="http://www.ogp.org.uk/Highlights/HighPop.asp?hnum=1296&cnum=0">http://www.ogp.org.uk/Highlights/HighPop.asp?hnum=1296&cnum=0</a>

Tags: oil politics mccain presidential speculation moral oil jet fuel frequent fliers houston continental united cars death oil fatalities producers employees companies

Saudi by the numbers

June 23, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

There was an awful lot of oil talk over the weekend. Much of it with the boring feel of stuff said many times before, like King Abdullah blaming these prices on the “selfishness” of the futures markets. He may have a point about traders pushing prices too high but there’s a lot of greed to go around.  So here it is by the numbers from the Wall Street Journal, Houston Chronicle and the BBC: By August the Saudis said their output will rise to 9.7 million barrels a day, up from 9.5 million a day.  But for now, there’s bad news about supplies: Attacks on Nigerian oil production facilities onshore, and more alarmingly offshore, have cut production by 20 percent onshore and 10 percent offshore.  Rising demand means much higher prices, though it may be factored into the market already. For every 1 percent rise in demand, crude oil rises 20 percent according to U.S. Energy Secretary Samuel BodmanFor the year the International Energy Agency is predicting demand up 800,000 barrels a day, nearly 1 percent.  Ultimately much of this run-up goes back to the idea that oil production is close to its peak, if it has not done so. A move the Saudis may help answer that question. Saudi Arabia also promised an aggressive campaign to push its overall output capability to as much as 15 million barrels a day by 2018 from around 11.4 million. To reach its higher goal the Saudi’s are expected to up their spending on maintaining and adding production from more than $60 billion now to nearly $130 billion.  The bottom line: oil prices were up again Monday.

$6.64 a gallon -- the end of life as we know it?

June 25, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

It’s getting easy to be blasé about oil price predictions. At this stage any price now seems possible for a gallon of gasoline.  And there’s no getting around paying more so why dwell on an annoying fact of life?But the story in the Houston Chronicle quoting Amy Jaffe of James A. Baker III Institute of Public Policy on what $200 a barrel oil could do to increase the pump price is worth doing some contemplation, and a little calculation.<a href="http://www.chron.com/disp/story.mpl/business/5854650.html">http://www.chron.com/disp/story.mpl/business/5854650.html</a>If oil reaches $200 a barrel as some analysts have said it could, forget $4-per-gallon gasoline. Think $6.64, according to a Rice University analysis of the link between prices of crude and gasoline. I did some math. The kind they teach in grade school. And since I was riding Metro – it’s a long story to do with a car in the body shop and my son --- I kept it simple by doing the calculations based on $6.50 a gallon.Initially I thought, if you have a 16 gallon tank, a fill up would break $100 -- $104 to be exact, which I’d assume is stunning the first time it happens at least.But then I stated thinking of the cost per mile. I love unit costs. I can even figure out how many meals I can get out of a meatloaf. (It tastes better than you think).In this case the gap between the savings on a fuel efficient car and a gas hog grows truly astounding.At $3 a gallon it’s a difference you can live with to have the leg room and indulge in the fantasy that your SUV will be pulling your boat to the lake soon. At that price the cost per mile is 7.5 cents at 40 miles per gallon and 30 cents per mile at 10 miles per gallon. A wide gap but on a 100 mile trip that’s $7.50 versus $30. The $23 difference seemed painful when gasoline first broke $3, but now looks like a deal.Currently prices are hovering above $4, which means that trip ranges from $10 for the 40MPG care up to $40 for the gas hog – a $30 gap.But at $6.50 a gallon the gap grows really painful. The cost for that trip in the 40 mpg car is $16.25, or nearly $49 less than the $65 cost in the 10MPG vehicle, which at that price can be described as a monster.Given that people are turning away from low mileage vehicles with prices above $4 per gallon, could a $6.50 a gallon  price spur what now seems like extreme behavior, like a riding a bus? After all, even the owner of a car getting 40 miles per mile is paying more than $16 to drive 100 miles, which is a commute for a lot of people in Texas.Suddenly employers would start looking at a four-hour car-trip to visit a client like it’s a big deal.Are you making changes already in your driving life? Do you feeling like your mileage rate at work is covering the real cost of your trips? Is this all to horrible to even think about?

Oil hammers the market, for used cars that is

June 26, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

Stocks hit a low for the year with oil prices up and more bad news about big U.S. companies.The two are tied today because high oil explains low auto sales for General Motors and Chrysler, who were the big losers on unflattering comments about their balance sheets. This Wall Street journal story offered this oft repeated explanation for the auto mess:<a href="http://online.wsj.com/article/SB121449398236007323.html?mod=hpp_us_whats_news">http://online.wsj.com/article/SB121449398236007323.html?mod=hpp_us_whats_news</a>Sales of pickups and sport-utility vehicles have fallen off a cliff the past several months as gasoline prices surged past $4 a gallon. Those consumers who are buying new vehicles are gravitating toward smaller, fuel-efficient cars after years of snapping up bigger rides. So how bad is it if you are trying to sell a big old SUV? Well that’s not so easy to figure. As any used car haggler can testify the value of cars out there is a point of argument. Gas guzzlers should cost less but since paying the Blue Book price is rare, particularly on models where the buyer knows someone is desperate to sell. A telling sign was offered by a recent Business Week story about the woes of auto dealers. Used car sales to budget-conscious consumers were supposed to help dealers when the economy slowed, holding down new car sales. The problem is: what do you do with big old used cars:<a href="http://www.businessweek.com/magazine/content/08_26/b4090058458459.htm?chan=magazine+channel_what%27s+next">http://www.businessweek.com/magazine/content/08_26/b4090058458459.htm?chan=magazine+channel_what%27s+next</a>Consumers are buying smaller vehicles, which generate less profit. And to buy them, Americans are trading in gas-sucking SUVs that are harder to sell than snow tires in August. Earl Hesterberg, CEO of Group 1 Automotive chain, says his dealerships have cut gross profits on used trucks by nearly a third. The vehicles are moving, but used-car profits fell 6% in the first quarter, and overall earnings dropped slightly, to $16.4 million, on $1.5 billion in revenue. Another negative for the day was another reduction in the new car sales forecast by Edmunds.com. But a visit to that site also shows there an upside to $4 a gallon gasoline. Car critics, who typically would worship the powerful brutes from auto makers, now make fun of them. This list predicting which of them will be DOA is food for thought: <a href="http://www.autoobserver.com/2008/06/dead-on-arrival-new-models-that-dont-have-a-chance.html">http://www.autoobserver.com/2008/06/dead-on-arrival-new-models-that-dont-have-a-chance.html</a>The writer warms up with a poke at the new BMW X6 -- “a premium-octane-slurping freak of nature.” A year ago that might have been meant as a compliment.And then he calls a Honda Accord, “Fat, heavy and overstuffed.” Well that’s probably because test driving another Accord is not what gets an auto critic out of bed in the morning.And while he can mock Ford decision to offer the new F-150 with only a V-8, I still figure a lot of them will sell. They are kind of like cowboy boots and a suit. It’s not for everybody but some people have to do it. Though in this case they might oughta wait for a V-6.So what vehicles out there make the top 10 list of dinosaurs?  Don’t answer Hummer please, that’s been taken.

High oil prices yield airline fare doublespeak

June 27, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

Airline fares are getting to be like a bad joke where you have to wait for a long time to get the punch line. Blame that on high oil prices. Some airlines are starting to quote fares on a cost-plus basis – the fare plus the fuel surcharge.Delta is giving new meaning to the phrase rewarding its most loyal customers. The “free tickets” earned by frequent flyers now come with a surcharge. This ranges from $25 for most U.S. and Canadian flights to $50 on international routes. It will take effect Aug 15. <a href="http://news.delta.com/article_display.cfm?article_id=11101">http://news.delta.com/article_display.cfm?article_id=11101</a>And this week British Airway is offering a tantalizing fare to London -- $160 round trip – but there’s a catch. Bill Montgomery, writer of the Houston Chronicle’s blog Houston Departures, points out there’s also a $426 fuel surcharge to pay, and $150 or so in taxes and fees. <a href="http://blogs.chron.com/houstondepartures/2008/06/fare_sale_to_london_and_dont_f_1.html">http://blogs.chron.com/houstondepartures/2008/06/fare_sale_to_london_and_dont_f_1.html</a> This all reminds me of those folks who call and tell you you’ve won a free trip, but to get them you owe a couple hundred bucks for shipping and handling.Granted jet fuel prices are getting ever more punishingly high. And based on his obsessive shopping of fare sales, Montgomery said the $754 round trip cost of the flight from Houston to London isn’t a bad deal. But the $160 rate just totally fails to convey anything like the actual cost.Delta explained its move by noting the cost of jet fuel has nearly doubled and this is just one of many ways to making up for that increase. (In case travelers hadn’t noticed). They said it was a temporary measure, which would be “reevaluated” if energy prices fall.Certainly the reaction of other airlines could also make it temporary but lately fee increases have mostly been embraced by the competition.But frequent flyers include the corporate fliers who will pay fares that would convince a vacation traveler to drive instead, or fly on Sunday morning at 6 a.m. This program could alienate the few people most able to pay up to fly.Since this program takes effect in mid-August it’s time to cash in those miles before the surcharge hits.  Those miles you wanted to use to fly to Hawaii, ehh, maybe Birmingham Alabama in July would be good because it’s going to be hard to find an open seat in the peak summer travel season.It should be noted also that late last year Delta announced it was paring the number of seats available for those booking “award flights” on popular routesOh and as far as Delta is concerned Puerto Rico is an international destination so the fee is $50, but it’s a $25 fee on tickets to Hawaii because it’s one of the 50 states. In the greater scheme of things I guess that all makes sense.

It's official: this is an Oil Price Shock

July 1, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

Well it’s official, we’re being shocked.In the midst of a ho-hum AP energy story – another record a few pennies short of $141 a barrel  – the head of the International Energy Agency announced the world is feeling its “third oil price shock.” <a href="http://www.chron.com/disp/story.mpl/headline/biz/5865186.html">http://www.chron.com/disp/story.mpl/headline/biz/5865186.html</a>Numbers 1 and 2 were in 1973 with the Arab oil embargo and 1979 with the revolution in Iran. To put that in perspective, in 1973 Richard Nixon was president and the number 1 hit was Tie A Yellow Ribbon 'Round The Ole Oak Tree by Tony Orlando and Dawn. In 1979 we had Jimmy Carter and . My Sharona – the version  by The Knack. – followed by an awful lot of discoIn both cases the shocks hit when inflation was a worry, the economy was sluggish and there was a recession ahead – hitting in 1974 and 1991. I’m still hoping next year will be better but there’s so many signs, big and little, that this is far from over that I fear this shock will be with us for a while.Do you think talk that matter doesn’t matter as much as it used to is true, or is that wishful thinking and an actual recession is ahead?

Grim scene in the Arctic offers hope only for screenwriters

July 3, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

No doubt about it, the possibility of getting rich on oil can bring out the bad side in people.First there was the story last weekend from the Associated Press that there’s a 50-50 chance the North Pole will be ice free this summer, “which would be a first in recorded history.”Depressing news for anyone fearing climate change caused by the build up of carbon dioxide in the atmosphere, but it appears it’s also an opportunity for the more belligerent among us.Upstreamonline reports that a Russian General said his country has been preparing for armed conflict over its claim of mineral rights over a large slice of the Arctic Shelf.<a href="http://www.upstreamonline.com/live/article158416.ece">http://www.upstreamonline.com/live/article158416.ece</a>The story, based on news service reports, said this claim for the rich resources there has been disputed by four other countries with territory bordering the arctic -- the US, Canada, Norway and Denmark to be exact.General Vladimir Shamanov, said they’re getting ready for a fight on this one."After several countries contested Russia's rights for the resource rich continental shelf in the Arctic, we have immediately started the revision of our combat training programmes for military units that might be deployed in the Arctic in case of a potential conflict," Shamanov told Sky News. "Wars are won or lost long before they start." All of which sounds surreal. But the stakes really are really high there. This week a geologist from the U.S. Geological Survey estimated the Artic could hold 100 billion barrels of oil. <a href="http://www.rigzone.com/news/article.asp?a_id=63603">http://www.rigzone.com/news/article.asp?a_id=63603</a> The story from Upstreamonline cited estimates that this area could hold 25 percent of the world’s untapped mineral resources. With so little exploration, it's anyone's guess.In trying to think of an upside in this grim scenario --a potential ecological disaster leads to armed conflict -- I can think of only one. This is good news for Hollywood. The reviews I’ve seen of climate change movies conclude that weather driven plot lines just don’t deliver on the Big Screen.But I can see a destroyer captained by Tom Hanks battered by ice bergs and missiles. Or maybe the next Bond movie set in Murmansk. Yeah that’s what I'll pay to see this time of year.Please tell me if I am being too flip and hopeful here.

Try a little openness, Shell finds people appreciate the effort

July 6, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

Sometimes you can communicate just by talking to people. It’s a simplistic way to put it. But it sounds like what Shell Oil Co. gathered from its 50-city tour to discuss energy prices. Chris Bozeman, deputy director of U.S. communications for Royal Dutch Shell, recounted the benefits and lessons learned in a recent speech in Houston.The bottom line, from Shell’s point of view, is that visiting50 U.S. cities over 18 months paid off in the form of a jump in the company’s internal reputation measurement rating. They don't measure to see if it affected sales or stock price, which would be hard to separate from enormous impact of the run-up in the price of crude. But in a sector as political as energy, public sentiment matters.Shell launched the tour as a way to dealing with the bad feelings after Hurricane Katrina, when prices surged in what was “a major reputation crisis” for oil companies accused by irate consumers of profiteering.“I never felt so hated in my life,” Bozeman told a lunch meeting of the Houston chapter of PRSA, which stands for Public Relations Society of America.But when John Hoffmeister, CEO of the U.S. operation decided on a tour to counter those perceptions, and the many misconceptions, she described that prospect as the “scariest thing in the world.” And  there were even skeptics there that said Shell should not try it, but Hoffmeister was not to be deterred.The tour evolved based on some trial and error. Based on Shell’s experience, the old fashioned town meeting still can have an impact. In an era where there’s so much stress on broadcast and online, these gatherings of people invited by Shell proved to the be the most effective element of the tour which also featured speeches and meetings with community leaders, Bozeman said.The company also realized that employees and retirees were a much more effective form of communication than it realized at the start of the tour. Over time Shell ramped up its efforts in the cities visited to brief the army of workers and retirees on the tour and the message the company was sending.It was a gigantic effort, with a battalion of executives involved, outside help, contract workers added to manage the road show and lots of time documenting everything along the way. And it’s not likely to be repeated I the foreseeable future, but Shell is trying to keep up the conversation with a speakers bureau of it employees.Bozeman said other companies need to get out there and tell their story. Will they do it? Well another thing they learned, in addition to the importance of learning to laugh when the unexpected happened, was, “when you raise your profile you are a target.”We’ll see how many CEOs are willing to be so visible. If they did it would help the industry, and create a more thoughtful discussion of energy policy. It’s not enough to rely on the American Petroleum Institute to tell their story.But I just don’t see it happening for the very reason it’s needed – there are a lot of big negatives out there and that makes meetings a scary option.Do you think energy companies should be doing more? If so, what?

Hopes for lower oil prices riding on tankers

July 7, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

The Wall Street Journal added to talk of $200 a barrel crude today with a story and survey on the topic with only about one-fifth of those polled expecting it will get there.I’m clinging to straws on that question. While crude that high would be a fascinating economic experiment, adjusting to that would not be good for the economy – even in Houston where oil isn’t the entire economy – or my retirement fund. Well oil prices did drop on Monday, falling nearly $4 a barrel after traders moved on from last week’s supply worries. But new worries are always there for those looking for ever high prices and that loss shrunk as the day went on.But I’m looking for news that could push it the other way so I’m glomming on to a story from Bloomberg.com about how owners of oil tankers can expect lower earnings on weakening demand for crude oil around the world.<a href="http://www.bloomberg.com/apps/news?pid=20601072&sid=ayUN7uocWiec&refer=energy">http://www.bloomberg.com/apps/news?pid=20601072&sid=ayUN7uocWiec&refer=energy</a><blockquote><blockquote>Earnings will weaken because of a fleet expansion that the International Energy Agency says will ``massively'' exceed growth in cargoes over the next two years. The increase in vessels will combine with the slowest growth in oil demand for six years as the global economy loses steam, driving tanker rates 65 percent lower by 2010, futures contracts show. </blockquote></blockquote>I know that eventually price does matter. China has sharply reduced fuel subsidies which should trim demand.  I just don’t know if crude has to reach $200 before that happens.So am I just pretending this rally is running out of steam.

Nicagagua search for oil creates strange bedfellows

July 8, 2008

0 comments

oil, gas, regulation, politics, Houston, refining, gasoline, beer, wind, alternate energy, policy, economics, bicycles

While Mexico’s production keeps fading as it spurns investment by outsiders, an neighbor is opening up its waters to exploration by U.S. oil companies.Nicaraguan president Daniel Ortega, the Sandinista leader who was portrayed  in this country as the left-wing devil during the Reagan years, has signed off on that most capitalist of institutions – exploration deals with independent oil companies. Upstream.com reports the country is closing in on a second deal to to explore of the Central American country’s east coast. It has approved a deal with New Orleans based MKJ Xploration, which has said it plans to spending $50 million to explore in the Atlantic coast, and it also reports another deal is in the works with Infinity Energy Resources, from Denver. This story in the Latin American Post lays out the history and mixed feelings associated with exploration off the coast. <a href="http://www.latinamericanpost.com/index.php?mod=seccion&secc=1&conn=5306">http://www.latinamericanpost.com/index.php?mod=seccion&secc=1&conn=5306</a>Actually this isn’t the first offshore exploration. Texaco walked away from a dry hole back in the 1978, before the war pushed the country off the list of likely targets for exploration. It’s back, which is testimony to the power of painfully  high oil prices and the economic pressure that puts on poor countries, even ones like Nicaragua that buy subsidized fuel from Venezuela.

Tags: oil politics mccain presidential speculation moral oil jet fuel frequent