tag:blogger.com,1999:blog-2100054477013501859.post4228726643887231030..comments2023-10-29T06:33:26.576-07:00Comments on Oil Is Mastery: Happy New YearOilIsMasteryhttp://www.blogger.com/profile/13457713647671999890noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2100054477013501859.post-63064544817097633392009-01-02T10:31:00.000-08:002009-01-02T10:31:00.000-08:00OFFSHORE DRILLING: CALIFORNIA AND ABIOTIC OILPubli...OFFSHORE DRILLING: CALIFORNIA AND ABIOTIC OIL<BR/><BR/><A HREF="http://www-tc.pbs.org/newshour/rss/media/2009/1/1/20090101_california.mp3" REL="nofollow">Public Broadcasting's News Hour presented a segment from their science unit on offshore oil drilling last night, January 1, 2009.</A><BR/><BR/>Please take the time to listen (audio only) to the report. The News Hour has a large national audience, the report is interesting for numerous reasons.<BR/><BR/>The report focuses on the conflict between the need to expand U.S. domestic oil supplies and environmental concerns (indicating offshore oil leases are being bid in waters off the Commonwealth of Virginia).<BR/><BR/>First off, we learn that California has 20 offshore drilling platforms producing 65,000 barrels of oil a day. The report quickly notes the <A HREF="http://en.wikipedia.org/wiki/Santa_Barbara_oil_spill" REL="nofollow">1969 Santa Barabra oil spill</A> and recounts the environmental damage from that spill. But the report also provides the offshore oil producers perspective, and that safety has greatly increased, that a billion barrels has been produced off the California coast since the 1969 oil spill with only 850 barrels of oil spilled into the environment.<BR/><BR/>Sadly, the report failed to mention the undisputed scientific fact: <BR/><BR/>"Natural oil oozing out from the seabed makes up nearly half of the oil that spills into the oceans. Now, a new technique that uses freely available satellite imagery can precisely locate and monitor every natural seep on Earth." As posted on the Oil Is Mastery website: <A HREF="http://oilismastery.blogspot.com/2008/12/oil-seeps-now-monitored-by-satellite.html" REL="nofollow">Oil Seeps Now Monitored By Satellite, December 8, 2008.</A> from a New Scientist report. <BR/><BR/>Of course, there are substantial NATURAL oil seeps off the California coast, too.<BR/><BR/>You would think that fact would be relevant to the offshore oil debate and that the News Hour audience would find that relavant information when deciding their position on whether to expand offshore oil drilling.<BR/><BR/>But there is more to the News Hour report: Interestingly enough, the very oil platform that "blew out" in the Santa Barabra Channel in 1969 is still producing oil 39 years later in 2008 (think of that -- 39 years later and the platform is still producing oil).<BR/><BR/>The moratorium on offshore oil was imposed in 1981, so 28 years after all new oil drilling off the California coast stopped, 20 oil platforms still produce 65,000 barrrels a day.<BR/><BR/>(I suspect that new drilling has occured by way of allowing multiple new wells off of each platform "grandfathered" before the moratorium.)<BR/><BR/>That certainly suggests that the source of the oil is not organic detritus derived, but abiotically derived.<BR/><BR/>The report mentions the advancement in offshore oil drilling technology and that many more oil wells can be produced from one oil platform than previously was the case.<BR/><BR/>Each platform can have from 15-18 oil wells fed into the platform, one platform off the California coast has 96 wells feeding into one platform.<BR/><BR/>One platform can produce 4 times the oil than was possible 10 years ago.<BR/><BR/>The technology of offshore oil drilling has advanced more in the last 10 years than in the previous 50 years. The report also mentions that oil can be drilled in over 5,000 feet of water (readers of Oil Is Mastery know oil can be drilled in up to 10,000 feet of water).<BR/><BR/>What was also interesting is that while the environmentalists interviewed spoke of depletion, the reporter never mentioned the word "depletion." I guess it's hard to talk about depletion when the same oil wells are producing at least 28 years later or longer and still going strong.<BR/><BR/>"Fossil" theory was not mentioned either by the reporter or the oil company executives interviewed.<BR/><BR/>All in all, the report seemed favorable to offshore drilling -- reflecting the "facts out at sea" and the enviable safety record of the oil industry since the 1969 oil spill.<BR/><BR/>Now if the report only mentioned all the NATURALLY occuring oil seeps into the ocean the report would have been fairly complete for a 9 minute segment.<BR/><BR/>The report did mention that political opinion has shifted even in the state of California, minus the die-hard enviromentalists.<BR/><BR/>Offshore oil drilling can help rescue California's state budget, which could be over $40 billion in the red this year.<BR/><BR/>Arnold better "Get Smart" and get with the program of drilling off the state of California, and, so too, with the rest of the nation.<BR/><BR/>"Drill, baby, drill!"Anacondahttps://www.blogger.com/profile/05522474791573134808noreply@blogger.comtag:blogger.com,1999:blog-2100054477013501859.post-62565809208282322662009-01-02T08:54:00.000-08:002009-01-02T08:54:00.000-08:002008 -- YOU CAN'T GET SOMETHING FOR NOTHING2008 wa...2008 -- YOU CAN'T GET SOMETHING FOR NOTHING<BR/><BR/>2008 was the year that reminded the financial sector, "you can't get something for nothing."<BR/><BR/>What do I mean?<BR/><BR/>Easy.<BR/><BR/><A HREF="http://oilismastery.blogspot.com/2008/05/even-charlie-munger-makes-mistakes.html" REL="nofollow">Complex financial instruments, derivatives, credit default swaps, collateralised debt obligations,</A> and securitized and bundled home mortgages and other "innovations" were supposed to usher in the era of "no risk" financial prosperity.<BR/><BR/>It didn't turn out that way.<BR/><BR/>The idea of "risk free" economic gain induced a "drunken sailor on liberty" mentality in the financial sector (along with the mistaken idea that globalization had made the business cycle obsolete).<BR/><BR/>The financial sector "took in" the "Trojan Horse" that risk had been banished from the realm (and the gods laughed at their campfire).<BR/><BR/>This mentality along with soaring energy prices up until July (oil at $147.11 a barrel) created an "over-leveraged" financial sector that simply could not withstand any kind of economic contraction.<BR/><BR/>It turns out "risk" is still part of the economic landscape even for the "Masters of the Universe."<BR/><BR/>And business cycles still tug at the sleeve of the U.S. and world economies.<BR/><BR/>Meaning, leveraged debt can mean huge profits in an "up" market, but if one is caught with large amounts of leveraged debt when the business cycle is "down" then one will be stripped of his shirt and lashed with a cat-o-nine-tails.<BR/><BR/>And the U.S. economy can't "float" on unending expansion of debt.<BR/><BR/>Workers can't expand their spending without an increase in income (2/3 of the economy is consumer spending).<BR/><BR/>It's back to basics.<BR/><BR/>Labor and capital need to share in the benefits of productivity increases and the expansion of the economy.<BR/><BR/>Labor can't simply be looked at as something to be "zeroed out" on the bottom line as executives cash in huge bonuses.<BR/><BR/>It's labor that buys all those houses and makes the mortgage payments on time.<BR/><BR/>It turns out the "Masters of the Universe" depend on the well being of the little people who do all the sweating, swearing, and working to support their families.<BR/><BR/>What does "back to basics" mean?<BR/><BR/>There are business cycles even in a "global" economy. Risk has to be calculated and measured and incorporated into business plans. Workers can't be treated as disposable diapers.<BR/><BR/>Finance must be treated as "risky" business, not a sure thing.<BR/><BR/>Leveraged debt works at the beginning of a "up" business cycle or in an industry or company that can increase value substantially.<BR/><BR/>Curtail or reduce debt as the business cycle matures.<BR/><BR/>Nobody is "too big to fail."<BR/><BR/>Including the U.S. financial system if caution is "thrown to the wind."<BR/><BR/>If all the above is remembered and accounted for then the economy will expand again and if the "lessons" are taken to heart then the expansion can be prolonged.<BR/><BR/>Isn't that what everybody wants?<BR/><BR/>Charlie Munger warned of such a possible result, too bad his advice wasn't heeded. It needs to be pointed out the Oil Is Mastery website noted his advice: <A HREF="http://oilismastery.blogspot.com/2008/05/socratic-solitaire-2008.html" REL="nofollow">Socratic Solitaire 2008, May 9, 2008.</A><BR/><BR/>Let's hope for a Happy New Year with lessons learned from a rocky 2008.Anacondahttps://www.blogger.com/profile/05522474791573134808noreply@blogger.com