| From: Big Dog | 12/2/2006 10:46:09 AM | | | | | | Now Hear This!
In cooperation with an esteemed few of the BBR's wonderful, and resourceful, friends I am pleased to announce the Inaugural Voyage of His Bigness' Great Adventure at Sea.
The Boom Boom Boat will call at ports along the Baltic Sea, including Stockholm, St. Petersburg, Oslo and Estonia. Plans are to have a wonderful and mixed group of investors, bidness folks, and dancing girls...well maybe only the first two. In addition, we are going to try and arrange small meetings/presentations from local investment experts at the various ports (to the extent practical).
Some well known names from the BBR room are already "in".
The departure date, from Copenghagen, is June 11, 2007, for ten days, returning to Copenhagen. Mark your calendar now!
More details coming soon...but unlike previous attempts at a BBR get together -- this trip is ON. The question is, how big will the group be.
Be there or be square.
Stay tuned.
Capt. Big |
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| From: ChanceIs | 12/2/2006 11:47:47 AM | | | | | | API Pres Fears New US Energy Tax Policy May Cripple Cos
>>>As always, watch the government. Stay with the stealthy stocks (e.g. small E&Ps and oil service) but be prepared for some general sector, governmentally induced pain. Of course if you are a long term holder, know that the government's foolishness today will only increase your profits later. I like profits today and tomorrow. Pelosi has a bull's eye painted on Exxon and BP.
Truthfully, the intent of the politicians as described in this article is the worst thing possible for the country. If you are an investor, you just got a windfall, if you are in the sector described above.
Memo To Speaker Pelosi:
Before you shackle the the large E&Ps in GOM - who have to be large to bear the huge expense and risk, have you measured the rig flux out of GOM - before you started spouting your nonsense??? Cavaney isn't blowing smoke on this point. Also, what relief was congress planning with respect to the matter immediately below, had it tipped another 20 degrees. Never mind, I know the answer. Had it capsized, NG would have gone to $20 and crude to $85. Instead of imposing $1 billion in windfall profits tax and royalty relief, you would have imposed $2 billion - and probably thrown a bunch of BP executives in jail for intentionally withholding supply.<<<
DOW JONES NEWSWIRES
November 29, 2006 7:30 a.m.
(This article was originally published Tuesday)
WASHINGTON (Dow Jones)--American Petroleum Institute President Red Cavaney Tuesday warned that a Democratic Congress - if it were to follow through with policy plans he believes may cripple U.S. oil companies - could threaten the country's security of energy supply.
Cavaney said he isn't so concerned about the Democratic leadership's stated top priorities of cutting tax subsidies legislated in the 2005 Energy Policy Act or expected expansion of committee oversight. Rather, he is concerned about Democrats' discussion of abolishing royalty relief, re-instituting a windfall tax and changing inventory accounting laws.
House Democrat leader Nancy Pelosi, D-Calif., has said one of her top priorities is to slash $14.5 billion in subsidies given to the energy industry under the 2005 Energy Policy Act. Congressmen Charles Rangel, D-N.Y., and John Dingell, D-Mich., new chairmen of their respective House committees, have said they are planning several investigative and oversight hearings to examine the oil and energy industry in greater detail. The Democrats particularly decry the oil industry's record-breaking profits while energy prices climb to previously unseen levels. Dingell has already called for an oil-and-gasoline price-gouging hearing.
Speaking at the National Press Club, Cavaney said he didn't believe the oversight hearings would reveal any skeletons in Big Oil's closet and that subsidies in the 2005 Energy Policy Act would only deduct a little over $1 billion from his members' balance sheets.
"It's a relatively small amount of taxes that would affect our industry," he said.
But Cavaney said if the government took away additional provisions and incentives to the industry, such as royalty relief, "or tax us more heavily, that's just going to be less investment that's going to be made by these companies."
Pelosi has said that although it's not a priority for the first 100 hours of the new session under Democratic control, repealing royalty relief is an issue she plans to tackle.
Royalty relief, Cavaney said, has helped to increase the amount of oil and gas produced out of the Gulf of Mexico - the biggest producing area in the U.S. along with Alaska - by 50% through re-investment of profits into projects.
"From 1992 to 2004, the U.S. oil and gas industry re-invested more than (their) total net income during that period," he said.
Repealing that relief, or trying to re-institute a windfall profits tax as some Democrats have considered, would not only reduce investment into offshore projects, but also undercut oil and gas companies' competitiveness. Many political pundits believe President George W. Bush would veto any such attempts, but they are less sure about what a Democrat president - if elected in 2008 - would do.
"The more you put onerous legislation and undercut the competitiveness of publicly held companies, the more you are going to marginalize those companies, and make it more advantageous for the national oil companies of foreign governments to end up serving their (own) consumers' needs," Cavaney said.
"I'm not sure in this year or this period of energy security and national security concerns, that makes good sense for a public policy perspective," Cavaney said.
"What you don't want to do is cripple oil and gas to achieve your public policies," he added.
Furthermore, Cavaney said he is concerned about Democrat calls to change inventory accounting laws.
If Congress decides to change the way oil and gas companies account for their inventories, Cavaney said refineries would likely hold less stocks, affecting the amount of supply available at any given time. That is a contradiction, he said, for a widespread call to increase refining capacity in the U.S.
Such a change, would "significantly increase the carrying costs of inventory to refiners...(and) if you double, quadruple their carrying costs, (refiners) are going to hold less inventory."
Cavaney said he would rather be in dialogue with the Democratic leadership to "help come up with some things that will actually help make sure our energy security stays sound."
At the top of his list is an offshore drilling bill. Neither the U.S. Senate - which has proposed a less comprehensive bill - or the House have been able to reconcile their separate versions. This is despite desperate calls from oil and gas companies and the growing sense of urgency to increase domestic production to offset dependence on foreign supplies.
Cavaney said his organization has been pressing the House leadership to allow the Senate version to be passed in the lame duck session. Otherwise, he and other industry heads fear a bill to open up new offshore acreage could take several more years.
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| To: CommanderCricket who wrote (75847) | 12/2/2006 12:45:20 PM | | From: ChanceIs | | | | >>>For all those who think the people closet to action "know" where prices are going, you've got to read this.<<<
Commander - I don't know whether to kiss you or smack you.
First. Thank you for the great insight on Zinc. Kudos.
Now it isn't clear to me whether you wrote the below, or merely copied from some other post. I suspect that it was the latter:
>>>The key flaw of communism is that when prices for goods are set below free market prices, shortages and misery are always the result. I just don't see how anyone can justify futures contracts as a part of the ideal free market. Futures contracts, by definition, lock you in and force you to perform, and are the exact opposite of freedom.<<<
I have to agree about the comment about setting prices below market value. (If you don't believe me, see my recent memo to Nancy Pelosi.)
Now as far as futures contracts locking in and being the exact oppostie of freedom.....well....where do I start:
1) Exactly who holds a gun to a party's head and forces them to enter a contract???
2) Please consult Aubrey McClendon. His stock was trading at $30 a year ago and about the same today vice Edge Petroleum which has fallen by 50%. Aubrey sold his gas forward at nice prices. I see that the price dipped some during the year, and the purchasers may have had some angst looking at the spot market in August (thank you Amaranth). However, Aubrey is plowing those profits back into drilling, and you will be able to purchase 2008 NG from him for $18 instead of $30. Be thankful.
Your comment about the traders not being the best because they are close to the action is extremely well taken. I have never bought a commodity future. Give me credit for that. I am not close enough to the action. I prefer a big slug of corporation between me and the commodity market to dampen out the oscillations - see Amaranth.
I recall well the calamity of Duke Energy's merchant electricity subsidiary, DENA. Back when electric dereg started, all the utilities rushed to set up merchant subs. DUKE through DENA sold a whole bunch of electric power forward from generation plants which they had not yet built. These were to be natural gas fired plants. DENA "knew" that NG was headed lower in '03. Well there was a glut of generation plant, so DENA didn't build their plants. This is not a problem, because one can either buy the forward contract back or buy electric in the spot and deliver it to satisfy the contract. However since DENA knew that NG was dropping going forward. It made no sense to hedge buy buying NG, after all, it was going to drop, and along with it the price of electric because electric in that region (California) mostly comes from NG. So they had sold power forward in a declining electric market, and avoided the expense of a hedge. Brilliant trading move !!!
NOT!!!!
Of course we all knew that NG spiked and electric along with it.
DENA has since been liquidated, and I see that Duke (the parent) is now completely liquidating its NG business.
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| From: ChanceIs | 12/2/2006 5:21:34 PM | | | | | | Bush May End Drilling Ban in Alaskan Bay
Saturday December 2, 4:30 pm ET
By John Heilprin, Associated Press Writer
Bush May Lift Drilling Ban in Alaska's Bristol Bay, Home to Endangered Whales, Salmon Run
WASHINGTON (AP) -- President Bush is deciding whether to lift a ban on oil and gas drilling in federal waters off Alaska's Bristol Bay, home to endangered whales and sea lions and the world's largest sockeye salmon run.
Leasing in a portion of area rich in oil and natural gas ended nearly two decades ago -- while Bush's father was president -- in the outcry after the Exxon Valdez oil spill in 1989.
But with natural gas prices higher, the Interior Department's Minerals Management Service proposed reopening up the North Aleutian Basin. That includes Bristol Bay and part of southeastern Bering Sea.
White House spokesman Scott Stanzel confirmed Saturday the president was considering taking that step.
Environmentalists oppose drilling there because of the potential for oil spills and harm to wildlife. They have speculated in recent days that Bush might allow such drilling before Democrats regain control of Congress in January.
"If the Bush administration decides to allow drilling in Bristol Bay, it will simply illustrate the level to which they will sink to satisfy Big Oil," Carl Pope, the Sierra Club's executive director, said Saturday. "They are willing to risk a valuable, renewable resource like Bristol Bay's salmon fisheries for limited, shortsighted drilling plans."
The Minerals Management Service said in its August proposal that reopening energy development in the basin's federal waters, extending between three miles and 200 miles offshore, could produce $7.7 billion in oil and gas production and up to 11,500 jobs.
Some 200 million barrels of crude oil, about what the U.S. imports every 16 days, are thought to be there. The agency estimates the region could yield 5 trillion cubic feet of natural gas -- a quarter of all U.S. annual production.
Fourteen companies are said to be interested. The agency cited support among more than a dozen local and tribal governments nearby who believe the drilling would boost their economy. Lease payments go to the government.
Despite its fame among fishermen for its rich stocks of salmon, king crab and other seafood, the Bristol Bay fishing region has lost hundreds of millions of dollars over the past decade because of competition from less expensive farmed salmon.
Alaska Native villages also depend on the annual sockeye and chinook salmon runs for protein in their diet.
The commercial fishing industry has plunged into a depression, giving more support to Royal Dutch Shell PLC and other oil companies that have lobbied the White House to lift the offshore drilling ban.
Environmentalists worry about the large populations of migratory seabirds and crab, the imperiled Steller's sea lions and northern sea otters, or the North Pacific right whales -- a population so decimated only about 100 are thought to still exist.
The Minerals Management Service said accidental spills could foul coastal water quality, and the noise and pollution from more ship traffic could disturb or kill seagoing creatures. It said even a large spill probably would harm a small portion of the fish populations, but could pose a serious threat to marine mammals.
The Bering Sea Fishermen's Association raised alarms about protecting the region, as did the Yukon River Drainage Fisheries Association, which said the drilling would threaten the salmon runs.
On Friday, more than 30 people representing fishermen, native Alaskans and conservationists wrote Bush urging him not to lift the ban.
"These protections have been in place because of the great risk to Bristol Bay posed by oil and gas development," wrote representatives of the Alaska Longline Fishermen's Association, Alaska Wilderness League, Sierra Club, World Wildlife Fund and others. "The presidential withdrawal now stands as the last line of defense for this irreplaceable resource."
The southwest segment of Bristol Bay was last open for lease sales in 1988 when the federal government collected more than $95 million. The government bought back the leases after the Exxon Valdez coated Prince William Sound and the waters of south-central Alaska with 11 million gallons of crude.
Congressional protections put on the area in 1989 were lifted in 2003 at the behest of Sen. Ted Stevens, R-Alaska, who said he had been acting at the request of constituents in the region.
Environmental groups said they are confident the new Democratic-controlled Congress would work to restore congressional protections on Bristol Bay.
Associated Press writer Jeannette J. Lee in Anchorage, Alaska contributed to this report.
Interior Department: |
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| To: ChanceIs who wrote (75855) | 12/2/2006 6:33:22 PM | | From: LoneClone | | | | That quote was from Jason Hommel, who is a genius at promoting companies he has been given shares in, not bad at analysing mining companies and markets, and completely incompetent at analysis outside that narrow area of expertise.
At least this bulletin didn't end with his usual "Praise the Lord and pass me your money" salutation.
LC |
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| To: ChanceIs who wrote (75853) | 12/2/2006 8:29:43 PM | | From: Bearcatbob | | | | At my age I have quit worrying about the merits of political idiocy. It is simply time to profit. I am certain the worst of policies will only help small E&P and Canadian companies.
Most likely it is noisy rhetoric that we will be able to trade off of. |
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| To: Dennis Roth who wrote (75849) | 12/3/2006 1:07:16 AM | | From: Researcher | | | | Gas prices hardly affect demand
UC Davis survey says pump costs have to soar a lot before Americans change driving habits
- David R. Baker, Chronicle Staff Writer
Friday, December 1, 2006
Record high gasoline prices haven't made a serious dent in America's demand for fuel, a new UC Davis study suggests.
Soaring prices have prompted Americans to cut back their driving only slightly. Further, drivers changed their ways less during the most recent shocks than they did during the period of skyrocketing gas prices of the 1970s, the study found.
The research will be presented this morning as part of a UC Berkeley conference on gasoline markets. The study concludes that pump prices have to soar significantly more before Americans change their habits, a finding that has big implications.
Economists and politicians have been debating whether raising taxes on gasoline would help cut demand, easing the country's dependence on oil and fighting global warming. The study suggests that only a very large tax -- one so high that it would probably be politically impossible to enact -- could have a significant effect.
"I would advocate for a tax, but I'm also a realist, and I know it would never work," said Christopher Knittel, a Davis economist and one of the report's co-authors. "It's hard to get a 10-cent gasoline tax passed, much less one over a dollar."
The Davis study examined two periods of rising prices: 1975 to 1980 and 2001 to 2006. In each, it examined the "elasticity" of demand -- the amount that gasoline use changes as prices rise or fall.
For every 10 percent increase in price during the late 1970s, demand fell 2.1 to 3.4 percent, researchers found. But in the past five years, every 10 percent price increase drove down gasoline purchases by a mere 0.34 to 0.77 percent.
The findings fly in the face of what some energy economists expected. As gas prices rose to record heights in the past two years, experts reasoned that rising prices would eventually force drivers to cut back on trips and fill up less often.
The prediction came true. But the change didn't amount to much.
Demand for gasoline usually increases 1.5 to 2 percent each year. In January and February of 2006, it actually fell, by less than 1 percent, according to federal data. But then it started rising again, averaging between 0.5 and 1 percent most months.
"It was growing slower, but it was still growing, and considering how much higher prices were, people were really surprised it was even growing at all," said Doug MacIntyre, senior oil market analyst with the federal Energy Information Administration.
Other researchers have found that Americans are making some changes in response to higher gas prices, but the cumulative effect of those changes has so far been limited.
A report released Thursday by Cambridge Energy Research Associates, for example, found that the amount of miles driven by the average American in 2005 dropped for the first time in 25 years.
That decline, however, was less than half of a percent. The report attributed the decline to higher prices as well as the aging of the U.S. population, since elderly Americans drive less than those of working age.
Research showing that use doesn't decline much as prices rise undercuts arguments for higher gas taxes. But gas tax advocates aren't ready to give up on the idea.
Severin Borenstein, director of the University of California Energy Institute, noted that the UC Davis study measures short-term changes in gasoline use based on short-term price increases.
Long-term changes in driving and buying habits are harder to track but matter far more, Borenstein said. And taxes, which stick around year after year, can prompt drivers to make long-term changes, such as buying more efficient cars or living closer to work.
"That's what actually changes auto fleets, housing decisions, political support for mass transit," said Borenstein, whose institute organized today's research conference. "They're right that this is a little piece of that puzzle, but the jump they make on gas taxes is a stretch."
Why the difference in gas consumption patterns between the 1970s and the current period? It could be the result of suburban sprawl, as more Americans buy homes miles away from work.
"We tend to live farther from our jobs now, so if the price of gas goes up, I'm still forced to drive to work," Knittel said. "There's not much discretion."
The difference also could be connected to the rising number of dual-income families. "Now it's two people who can't change their behavior," Knittel said.
Driving ahead
Americans aren't cutting driving much as gas prices rise.
-- From 1975 to 1980, demand fell 2.1 to 3.4 percent for every 10 percent gas price increase.
-- From 2001 to 2006, demand dropped just 0.34 to 0.77 percent.
-- Researchers conclude that only very large gas price increases would cut driving significantly.
Source: UC Davis
E-mail David R. Baker at dbaker@sfchronicle.com.
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URL: sfgate.com |
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