Oil Boom in the Americas

Well, at last some of the more liberal media have discovered that you can find and drill more oil outside of Saudi Arabia…

From the NYT, with commentary interspersed:

http://nation.foxnews.com/oil/2011/09/20/nyt-oil-boom-americas

By Simon Romero, NYT

Brazil has begun building its first nuclear submarine to protect its vast, new offshore oil discoveries. Colombia’s oil production is climbing so fast that it is closing in on Algeria’s and could hit Libya’s prewar levels in a few years. ExxonMobil is striking new deals in Argentina, which recently heralded its biggest oil discovery since the 1980s.

So much…

Brazil with nuclear subs? That’s going to make the Americas an interesting place…

Columbia with oil AND drug money? OK… so hope it’s stays somewhat stable…

Argentina? A basket case on and off over the years, with an Exxon deal? Wonder how long before “Nationalization” is in the air? I’d put it at about “1/2 developed fields”…

Up and down the Americas, it is a similar story: a Chinese-built rig is preparing to drill in Cuban waters; a Canadian official has suggested that unemployed Americans could move north to help fill tens of thousands of new jobs in Canada’s expanding oil sands; and one of the hemisphere’s hottest new oil pursuits is actually in the United States, at a shale formation in North Dakota’s prairie that is producing 400,000 barrels of oil a day and is part of a broader shift that could ease American dependence on Middle Eastern oil.

Well, that “Cuban water” is just about 1/2 way from Florida to Cuba right near where the Obama Administration will NOT let our companies drill and in the same oil pool. Guess it’s OK for “Chinese Quality” oil rigs as long as the oil goes to a Socialist Cause or too… Oh, and I’m sure Cuba is comforted by the knowledge that the currents head toward Florida and away from Cuba…

Oil Sands are now “real oil” and Canada is looking for folks to work. The US Shale is gigantic, if we could just get the legal / political stars aligned.

[…]
The hemisphere’s oil boom is all the more remarkable given that two of its traditional energy powerhouses, Venezuela and Mexico, have largely been left out, held in check by entrenched resource nationalism. Venezuela is now considered to have bigger oil reserves than Saudi Arabia, putting it at the top of OPEC’s rankings. If it opened up more to foreign investment, it could tip the scales further in the hemisphere’s direction.

Ah, that Central Planning Efficiency… If ever you wanted an example of how to quash productivity and have greed and avarice crush rather then grow productivity, just look at PEMEX and Venezuela… Every person in Venezuela could be rich were it not for the way Chavez is using oil for political goals rather than going for high production and giving the results to the people.

[…]
Moreover, the Americas still vie for investment with other oil-rich regions, like Russia’s portion of the Arctic Ocean and West African waters. Security concerns like the abduction of oil workers could, as they have in the past, prevent Colombia from continuing to raise output. And environmental and financing questions pose persistent challenges to the rapid growth of the hemisphere’s oil production.

Oh, yeah, all that Russian Oil too…

[…]
While the contamination of water supplies by fracking is a matter of fierce environmental debate, the technology is already reversing long-declining oil production in the United States, with overall output from locations where oil is contained in shale and other rocks projected to exceed two million barrels a day by 2020, according to some estimates. The United States already produces about half of its own oil needs, so the increase could help it further peel away dependence on foreign oil.

Well, technology moving the goal posts; and technology overcoming declines in “easy” fields by exploiting new “hard” fields. Golly… who knew (just because that has been the entire history of oil production…)

We make half our own oil? Really? Wow, more than I thought…

The challenges of tapping Brazil’s new offshore fields, located beneath 6,000 feet of water and salt beds formed by the evaporation of ancient oceans, are even greater. Petrobras, which has ambitions of surpassing ExxonMobil as the world’s largest publicly traded oil company, is investing more than $200 billion to meet its goals.

And were it not for their recent manipulation of investment rules after electing a more activist President, the PBR Petrobras stock would not be in the dumper… but for long term investors, it’s worth watching for a turn on the next election… That $200 Billion, BTW, in the form of US Treasury Bonds traded to them from China in exchange for getting 20 years worth of oil supply locked in. One has to wonder if the PBR stock price has flat lined in part due to a price lock on the eventual production? So don’t expect all that new Brazilian oil to show up in The USA…

“Brazil will become an oil power by the end of the decade, with production in line with that of Iran,” said Pedro Cordeiro, an energy consultant here for Bain & Company, who sees the country’s oil production climbing to 5.5 million barrels a day by 2020.

With a Chinese Sugar Daddy and Nuclear Subs. Well.

Maybe it’s time to learn Portuguese and head south…

[…]
As the United States has cut OPEC imports by more than a million barrels a day since 2007, Brazil and Colombia have emerged as leading suppliers to the American market, surpassing Kuwait.

President Obama visited Brazil in March, refusing to delay the trip even as war was raging in Libya, emphasizing while here that he wanted the United States to be a “major customer” for Brazil’s oil once production climbed at new fields.

Let’s see… we give our money to China for plastic junk made from oil. China gives it to Brazil in exchange for oil. China will want us buying the Brazilian oil why? And will loan us how much money to, literally, burn? Houston, I think we have a China Problem…

Then again, Brazil has a lot of oil, so they might have a little more to sell to us directly. Until China needs it. Or maybe China can lend us some Brazilian oil “At reasonable rates”…

The article goes on from there to talk about biofuels and the “challenges” getting oil produced in the Middle East. (Maybe we can swap Libya to China for Brazil? Heck, we could even toss in an Iraq and a draft choice of Afghanistan or UAE… We could even loan them some Aircraft Carriers to use to protect the waters in the region… Oh, Wait, they are building their own…)

So it’s a good news / bad news story.

It’s good that folks are finally learning that there is a LOT of oil still to be found and produced in the world. The bad news is that China has figured this out long ahead of us and already picked up some choice field positions.

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money, Political Current Events and tagged , , . Bookmark the permalink.

22 Responses to Oil Boom in the Americas

  1. It’s good that folks are finally learning that there is a LOT of oil still to be found and produced in the world.

    This, too, is bad news from their perspective.

    A pity. But even renewable energy is bad news from their perspective, attractive only to the extent that it is unrealizable. As soon as it starts to become plausible, the complaints start.

    Besides the oil business, China and the US have roughly equal production of coal. But China manages to extract their coal and only kill 6,600 workers per year (compared to the US’s 24).

    We operate on entirely different principles, and we are moving closer to having them directly compete, and conflict.

    ===|==============/ Keith DeHavelle

  2. P.G. Sharrow says:

    While in Alaska in the 1970s I was in a bar swapping lies with a oilwell rough neck that had worked on Chevron #7 in the ANWAR just as all drilling there was prohibited. He said that #7 was the oilyest hole that he had ever worked on, over 600 feet of hydrocarbons. For those that might wonder, 6 feet of hydrocarbons is a very good discovery. The well logs were “sealed” as secret information. pg

  3. UninterestingConnections says:

    If ever you wanted an example of how to quash productivity and have greed and avarice crush rather then grow productivity,

    Somehow, I expected you to know the difference between then and than.

  4. E.M.Smith says:

    @All:

    The other thing not talked about is the Alaska Petroleum Reserve:

    http://en.wikipedia.org/wiki/National_Petroleum_Reserve–Alaska

    http://www.blm.gov/ak/st/en/prog/energy/oil_gas/npra.html

    Dribs and drabs of “production” (mostly just enough to get some infrastructure in place if it’s needed to produce in a hurry / war emergency). Massive area and lots of oil. In “reserve”…

    I also find it interesting that around the perimeter of the Arctic there is a large spreading zone… Yet more oil found in geologically active areas…

  5. Jeff Alberts says:

    “Somehow, I expected you to know the difference between then and than.”

    I doubt you’ll be able to effect an affect here.

  6. Scarlet Pumpernickel says:

    ahhahahha I thought oil was running out lololol

  7. Ralph B says:

    PBR? I take it we are not talking about the beer…unless they have diversified

  8. adolfogiurfa says:

    E.M. See what countries in SA have the bigger growths in GDP…

  9. adolfogiurfa says:

    All this while you are engaged in the production of “biofuels” and trying “alternative energies” like Solyndra Gate´s a la Gore

  10. adolfogiurfa says:

    Perhaps you don´t drill because you still believe in “Fosssil Fuels”( though it has been demonstrated that it is not), and want to save some for the future when it would get exausted,.

  11. Jason Calley says:

    @ P.G. Sharrow “The well logs were “sealed” as secret information.”

    Minister Lindsey Williams has been saying for years that the Alaskan North Slope has vast reserves being held off the market.

    His belief (or rather, my understanding of what he says) is that an agreement was made between the US and the oil producing nations, primarily the OPEC countries, that if the Alaskan oil was kept off the market, the OPEC folks would use a percentage of their profits to buy US Treasury Bonds. Now that the US debt has grown so large — and the Middle East oil fields are moving past their prime production — the plan is to crash the US dollar, effectively negating the repayment of the bonds, then bring the Alaskan oil fields online with the price of oil high and the OPEC folks cheated of repayment.

    Is there any truth to his story? I do not know; I put it in the rather large file of maybe-right-maybe-crazy information that the internet is so good at supplying.

  12. E.M.Smith says:

    An I thot U wood understant the idee of a typo an thet some folks make um, and mayB even tha’ old eyes don alays have them glsses on and can’t alway see them tipos.

    U woodn’t B 1 a tham Carpers, wud U?

  13. E.M.Smith says:

    @RalphB: PBR is the stock ticker for Petrobras (and not Peanut Butter.. either)

    @Jason Cally: So who is this Lindsey guy?

  14. Ralph B says:

    Yes I know, but I always think of Pabst Blue Ribbon when I hear PBR

  15. Jeff Alberts says:

    Heh, I think of Patrol Boat, River.

  16. Jason Calley says:

    @ E.M. “So who is this Lindsey guy?”

    Good question — and I am open to any other opinions on this. What he claims is that during the construction of the Alaskan oil pipeline he worked as a chaplain for the employees of the drilling and construction companies, and in the process became something of a confidant and friend with many of the upper executives running the project. he says that he was allowed to sit in on many of their meetings during that period, and that over the years some of the men have continued to advise him on the inside workings of the big petroleum corporations. He has been writing for years that the Alaskan fields are MUCH larger than their publicly released figures, but that the true size has been with held as a matter of national security. I first saw videos of some of his speeches during the first part of 2008 when he was saying that his inside sources had planned an oil price run up to over $100 a barrel and then a drop back to the $40 range. At the time, it sounded rather unlikely to me, but he turned out to be pretty accurate. In his current speeches he is claiming that he has been told to expect a crash of the US dollar before the end of 2012 and that the North Slope oil will be marketed shortly afterwards.

    Anyway, maybe he was just lucky on his 2008 predictions, maybe he is a crank — I am not of a strong opinion yet, and as I say, I would be interested in any feedback from other folk who read these posts.

  17. P.G. Sharrow says:

    @Jason Calley

    Jason; while I have heard of this Idea of using up the easy to get to oil of the rest of the world first before accessing the largest fields that have been put off limits by government actions all over the U.S. I have not discovered credible evidence of such. A maybe. The largest and richest copper mines ever discovered are in Alaska and were closed for WW2 and never reopened. The ore from these ran 40 to 80 percent copper! and were not exhausted. Alaska is a mineral treasure trove and is nearly all locked away from production. WHY.

    In a state of nearly 425,000,000 acres only 800,000 is private. Since the mid 1970s the federal government fights to prevent all development of any kind in the state. Many of the towns are not connected by a road system.There has been little population increase in 40 years. This year the state pays residents $1,175 to live in the state.

    I lived in Alaska for 2 years in the mid 1970s. spent most of my time around and in Prince William Sound. Beautiful country but loooonge winters. 8-) pg

  18. P.G. Sharrow says:

    Ah yes! another hushed story.

    While doing maintaince drilling at the Naval Petroleum Reserve in the Kettlemen Hills a very large new field was discovered, about 5 years ago. After being published. The announcement was removed from the public. The man that brought this to my attention is very credible but we could find no additional information. pg

  19. E.M.Smith says:

    @P.G. Sharrow:

    It’s not a long winter, it’s just a very concentrated spring/summer ;-)

    Remember the NAME of the area. It’s for strategic MILITARY needs. Don’t want the “enemy” knowing where to capture / bomb first…

  20. Jason Calley says:

    @P.G. Sharrow Interesting information, especially the copper mining info. Also, I knew, of course, that most of Alaska is Federal land, but I did not realize just what a huge percentage it is!

    Honestly, if it does, in fact, turn out that massive mineral wealth is being held off the market, my preference would be that it it really was as a result of long term strategic concern. That sort of reasoning would be my preference… but I have reached such a refined state of political cynicism that I do not believe that is the real answer. I think that there are other more likely reasons for withdrawing resources. I think it much more likely that resources would be held off the market so that they could be used as collateral to encourage the purchase of US Treasury Bonds. It is very easy to imagine any of the US administrations of the last half century having some variation of the following dialog. “Well yes, obviously your country wants to be sure that you will be repaid for these bonds! And considering that that is a VERY BIG CHECK that you hold in your hands for us, let me give you a very special reassurance, just between us. We will agree to hold an equivalent dollar amount of resources in reserve as collateral on our debt to you. Timber, water rights, minerals — what do wish to see on the menu?” Certainly for the Japanese, the Russians and the Chinese, being repaid in goods shipped from Alaska would be a reasonable choice for them.

    Just my opinion, and without access to what is certainly very closely held information, no way I see to verify it.

    By the way, I envy you your time in Alaska, even with the cold winters. I once had a friend from Sitka who spoke about home like it was heaven. He finally packed up and back to where he loved.

  21. P.G. Sharrow says:

    Yes. I remember the Summer of “75” fell on a Tuesday in mid July and I had to work! ;-)

    Old Alaskan joke. pg

  22. P.G. Sharrow says:

    Maybe Warren has become a useful old fool. Sometimes people aquire wealth and power without wisdom in its use. pg

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