Michael Fitzsimmons

Why Exxon Should Significantly Increase its Dividend

swiftcreek1: i don't understand, and don't see the relevance of, your acorn comment. you say i have the choice to buy XOM or something. that is obviously true. the point you are missing, and what is not fair (imho), are the shareholders that have held exxon or mobil or XOM for decades and find themselves sitting on very large capital gains, preventing them from selling, while accepting the absolute lowest yielding stock in their peer group (by a longshot, not even close). nothing you wrote changes my mind on this matter. the table above speaks for itself, and XOM is obviously way out of whack on its dividend. wrt to the comment you cut and pasted, i already responded to that in my last post.

swaps: yup, yield is dividend/price, and obviously the stock price is a component. however, just imagine how much more skimpy exxon's current skimpy dividend was when XOM was at $90/share!
yet another reason for XOM to increase the dividend. if the price does happen to go up this year (instead of going down as it has been), the dividend yield will keep shrinking and investors will look at BP or CVX or COP and say, why not?

Michael*WD: i never stated that exxon didn't invest in alternative energy and i never complained about the long term return of XOM stock. what i did say is i wish they'd knock off the algae research and biofuels activity and simple line up behind a proven technology and resource and support natural gas transportation. with respect your dividend increase comment, what i asked in the article was when did they last **significantly** increase the dividend? i cannot remember. thus, the shareholders are stuck with a category low dividend yield, as the chart clearly shows. in the old days, when an oil company had huge profits like XOM in 2008, they would declare a "special" dividend and reward shareholders for their success. nowadays, we not only don't get the "special" dividend, but we get a paltry increase in the amount so they can say "we've increased the dividend for every year since alaska became state" or some such boast. like biofuels and algae, that is simply a distraction from what folks should be focusing on: it's a miserly dividend.

mws: thanks for the support! i think the chart says it all.

TexasTea: well, i certainly didn't suggest XOM go out on a spending spree for questionable assets and incurring debt. what i did suggest is;

1) the dividend yield of the stock is worst in class by a longshot
2) they should divert some of the cash going to stock buybacks and instead reward shareholders with a higher dividend.

Why Exxon Should Significantly Increase its Dividend

Living for dividends: yup, thanks. no one has yet to explain how pumping CO2 into the earth can be done economically or physically (except as XOM is doing in colorado to force out natural gas). even if it can be done, why not start with a fuel (natural gas) that has half the CO2 emissions to begin with?? :)

MJE_PDX: well, certainly it was both the dividend increase and the asset sales to whittle down debt. that said, do you disagree that XOM wouldn't have a similar pop if they increased their dividend substantially to say 3.5-4%? i bet it would, perhaps even more so than COP. with respect to XOM's cash hoard and AAA rating, i am certainly not forgetting it. in fact, those facts merely support my position that their skimpy dividend is way outta whack! i would agree that XOM's main competition is china, but it's interesting to see that as you point out, while china is locking up oil assets around the world, XOM has kept its wallet shut (with the exception of ghana). also, china has access to oil assets in countries that XOM does not (iran and some ruthless countries in africa for example). wrt the dividend and comparison to CVX, if it wasn't for the tax consequences of selling XOM, i'd rather own CVX, its higher dividend, and its outlook for increasing production. note the recent announcement that CVX made that oil production has increased by 40,000 barrels a day this quarter now that their rig in the GOM is up and pumping. there, you're getting a decent (though still comparably low) dividend AND increasing production. why on earth an exxon mobil shareholder would be happy with the current dividend is beyond my understanding. with respect to your $250/barrel oil by 2025, if the U.S. does not adopt natural gas transportation, i $500/barrel is possible when you factor in supply/demand fundamentals with the falling U.S. dollar policy now supported by obama/bernanke (as it was with bush/greenspan). this is a disaster waiting to happen. wrt your comments on XOM waiting out "alternative" energy, there is NO research needed for natural gas transportation - it's has been a proven technology since the turn of the last century, and we are awash in abundant, clean, and cheap natural gas. XOM invested billions in its Qatar LNG program, eyeing the U.S. market as well as asia and europe. however, when the smaller companies discovered the shale assets in the U.S., it must have dramatically altered the financials of the Qater project and XOM's investment there. still, XOM (like COP) executives refuse to jump on the natural gas transportation bandwagon. it's hard to understand since they are american companies, american executives, and they sit and watch america go down the tubes as a result of its addiction to foreign oil.

realold: yes, i am a fan of foreign oil companies. i always have to chuckle when folks talk about emerging market risks (as in brazil) as though there are no risks in the US market! we've seen under bush that the country has turned from capitalism to fascism. we've seen under both greenspan and helicopter ben bernanke that the helicopter of dollars everyone would thought would be dropped on middle class americans that need it, instead were dropped on the most wealthy executives that ran the banks, insurance, and national mortgage markets (not to mention the US treasury) into the ground. add to that, bush doubled the US debt in 8 years, and obama's continuation of these disastrous bush policies, and wha-la, you have gold at $1050/oz and heading, imho, much much higher. i reference malpass's excellent WSJ article in thursday's edition and i agree 100% with his suggestions on how to fix these problems.

optionsgirl: i'm not sure comparing corporate tax rates to oil and gas royalty rates is a valid comparison, although components of the overall corporate tax rate would likely contain royalty rates (at least they should). also needed to be factored in is the currency. as david malpass pointed out in his excellent WSJ editorial thursday, investment fled britain during the 50's and 60's as the pound crumbled. since the U.S. dollar is undergoing similiar systemic weakness today, and there appears no end in sight (as malpass points out, obama is continuing the disastrous weak dollar policy of the bush adminisration), U.S. policymakers would be very wise to take that into consideration when considering future oil and gas royalty rates.

k45: the foreign tax issue is a good point which i neglected in the article. thanks for bringing it up. most ADR owners get these taxes taken out automatically in their brokerage accounts. then they take the foreign tax credit on their US tax return. all that said, and even taking foreign taxes into account, the european oil companies still pay much larger, almost double, the exxon mobil dividend. so, while its certainly valid to identify the foreign tax issue, it does not support exxon's skimpy dividend policy (and you appear to agree with that). when you say exxon's actions give us a more accurate picture of the future of energy than does the media, what does that picture mean when exxon's production in 2008 was down year-over-year even when oil prices were over $145/barrel? does this mean exxon was merely keeping their oil in the ground for later, or, that exxon is having trouble replacing production and reserves? their investment in ghana, for example, was the first large new investment they have made in new oil reserves in years and years (at least that i am aware of). anyhow, i'd be interested in your thoughts and more explanation of your last statement. thx.

longoil: the consolidation issue is very interesting these days. i don't think XOM can do it due to monopoly laws. if it could, i think it would have pounced on COP when the stock collapsed. even with COP's debt load, it's portfolio of assets is very attractive, its low oil cost in prudoe a goldmine (and XOM already operates there along with BP), and COP does produce close to 1.8 million barrels a day. but XOM didn't make a move, because i am sure they think the DOJ would nix it. but the bigger issue is what pickens talked about on CNBC this week: there is a game that the US is not participating in and where china has a huge advantage having state run oil companies. china is going around the world now, and has the cash and organization to buy up oil. the US oil companies lack this financial power and the backing of a country's treasury. now, it was *very* interesting to me that somehow the U.S. government made an investment in brazil's petrobras. how does a "capitalist" country's government do that (again i "wink wink"). that would be a good idea for an article, write about US oil and gas companies to consolidate in order to better compete with china. thanks for the post!

john gordon: you won't be surprised to see my comment that a better and fairer way to deploy their cash hoard would be to aim it at the dividend rather than stock buybacks (at least a *much* larger percentage).

lorddarley: well, i'd much rather pay 15% taxes on a dividend then have to sell shares and pay cap gains taxes. further, their shares held up better last year, no doubt, but as i pointed out in the article they are down -13.5% YTD. as i suspect, this underperformance at a time when oil has recovered from under $40 to $70 is due to the fact that people are searching for yield. the dividend wasn't a big deal when the market was on a tear the last few years. but now, with CD rates under 2%, money market funds near 0%, and bonds very pricey with rates no where to go but higher, again, why would anyone buy XOM when it has so many better alternatives in terms of yield and companies like CVX and BP growing production faster? the argument doesn't hold water, and the stock's underperformance this year proves it.

yellowhoard: i like the foreign oil companies as well. i also like, you guessed it, GOLD.

Why Exxon Should Significantly Increase its Dividend

longoil: i certainly agree with you that exxon's finances are in order, which is one reason to bump the dividend. at the same time, i believe their executives are quite overpaid considering they are barely keeping production at current output, and smaller companies continue to find very large reserves right under their noses. at the same time, how can one not own a company that produces around 4 million barrels a day in an era when worldwide production won't keep pace with worldwide demand? so, we own it, but we just want to get paid a lil bit while holding it.

bindlepete: i can only hope XOM took (and takes) advantage of the low price to execute their buyback. that said, i'd like to see at least half the share buyback money go into the dividend instead.

geologist: i haven't checked your figures, but certainly XOM has greatly appreciated since 1980. at the same time, you pinpoint the problem: long time shareholders in exxon (and mobil) are sitting on a huge tax gain liability. therefore, if they sell, they'll get slaughtered. so they hold. but while they hold, why don't they deserve a competitive dividend? i mean not even close, to their peers. it's not fair to the long-term shareholder who now, more than ever, needs some friggin income!

tom armistead: well, not sure i agree. try to buy some taste great/less filling beer with BP dividends versus XOM's and see which one fills up your fridge first. in other words, the share buybacks don't give you income unless you sell the shares (and get taxed to death). i am not asking them to match BP's yield, but jeez, certainly they should get the dividend somewhere between 3.5% to 4%! even then, they'd still be middle of the pack on dividend yield, but best in the world in operating efficiencies and net income. it just doesnt make sense and isnt fair.

long_on_oil: once i reread my earlier response to you it seemed a bit harsh and directed personally at you, which was not my intent. what i meant was, exxon has done a great job at quelling shareholder discontent about the dividend. it's almost as if the shareholders are too intimidated to even ask XOM to fix what is so obviously a very very unfair dividend policy. i mean look at the chart - why in the world should exxon mobil be dead last in dividend yield when it is the best performer in the entire space in terms of generating cash and net income and has a pristince balance sheet? it's ridiculous! meanwhile, the executives make out like bandits and get their share - and much much more.

Living4Dividends: i guess we'll agree to disagree on petrobras. i don't expect (and dont want) a dividend out of them. i'd much rather they get the drilling done and be in position to cash in bigtime on the next huge oil spike, which will be coming sooner rather than later. i expect the stock to pop bigtime! with respect to returns, have you calculated PBR's return since year 2000? i'll take that anyday! that said, we do agree on XOM, so thanks for your support on the dividend issue.

Dirk: excellent comment, and that is perhaps the only theory that might supports their skimpy dividend policy. that said, there must be thousands or hundreds of thousands of investors who owned exxon (and mobil) stock during the down years and now are sitting on huge cap gains. it's not fair to make them sell shares to get access to money and pay taxes on those gains when a decent dividend may well prevent them from having to sell at all. at the same time, if they raised the dividend, those wanting stock appreciation would get that too. it's a win win situation! just look at the action at conoco recently after raising the dividend to $2/yr. and they have a large debt load. imagine how XOM would pop if the board of directors would simply raise the dividend to say a 3.5% yield. 4% and the stock would have a serious run-up.

optionsgirl: well, i like them both but for different reasons. PBR badly needs investment dollars to get the oil, so they cannot afford to totally diss the shareholders. they would not have been able to issue the bonds on the NYSE so succesfully if money managers were that scared of luna. CNBC just totally mischaracterizes the guy (imho). brazil, while a rising star, still needs investment and they know it. after getting some funding from china and even from the american gov (can you believe that??) they still need more investment money to build out the deepwater infrastructure. they aren't going to screw the ADS shareholders as it would severely reduce their capital when they need it most. that said, if china comes in and just finances the entire thing (which is possible!), then it would become more problematic. i think production growth at PBR is going to be first in class very shortly and remain that way for at least a decade. as far as taxation goes, in general i believe europe has higher royalties and higher taxes. american companies have had it made for decades, which is why BP is america's largest oil producer and STO and RDS have also invested heavily in the GOM. note the recent supreme court decision on the royalty matter (in favor of big oil). at the same time, certainly the atmosphere is changing in america from bush to obama, and the interior secretary is looking at things much more closely. however, obama and chu, by keeping the US addicted to oil and "clean coal" (wink wink), cannot afford to tax the oil companies to death or american oil production will plummet and then we'll be even more hosed than we already are. of course, realistically, all these companies are international in scope and take local tax/royalty issues into consideration wherever they invest worldwide.

Why Exxon Should Significantly Increase its Dividend

luckylenny: to each his own i guess. exxon has the finances to both buy back shares AND pay a reasonable dividend. their currrent dividend is one reason the stock is drastically underperforming the market. as i said in the article, why would anyone buy XOM stock and its paltry dividend when they have many more opportunities for growth in production and a decent dividend yield? XOM's dividend is quite simply hurting the stock and penalizing its shareholders.

longoil: well, Exxon can afford to pay a competitive dividend and keep a pristine balance sheet. every company on that list is able to pay a decent dividend and keep their finances in order, although i would agree that COP's debt level is higher than they or i would like. however, they just announced how they are going to reduce debt by selling some assets, and that is why COP popped (in addition to raising the dividend). Exxon's dividend is simply a joke. investors deserve some income from a company that makes so much net profit. see this is the problem, the somehow have convinced folks like you, and lucky lenny, that they cannot afford to pay you a decent dividend and keep their finances in order. this is simply untrue. they are simply keeping the money for executive compensation. as someone said in my article on STO's policy to pay out 45-50% of net income in dividends, the entire board of directors at STO make less than the CEO of XOM. so, that's where the money is going. why shareholders like yourself are complacent about that gives me a headache, and lets them get away with it.

long_on_oil: well, it will be a very long time before XOM goes out of business, but i obviously agree they can afford and should be paying a higher dividend. unfortunately, as some of these comments show, they have somehow convinced many of their shareholders that they are better off with a low dividend! (?) until XOM shareholders get more demonstrative, and flood the company with complaints, i doubt they will take action. they may not take action anyway as they are arguably the most powerful company in the world.

How Much Natural Gas Remains in the USA?

i am of course biased, but i believe a much better treatment of this subject can be found in this article:

seekingalpha.com/artic...

i have not heard many credible experts say we have "hundreds of years worth of natural gas reserves" (key there is the "s" on the end of hundreds), but i have heard 100 years worth, and would agree with that estimate. further, considering the haynesville shale may well turn out to be the 4th largest nat gas field in the world, and the economic recovery of many other shale regions, and that nat gas production is dominated by small independents (and therefore cannot be controlled as easily as oil), i don't think you'll see big runs in nat gas prices (inflation adjusted) for quite some time. i add "inflation adjusted" to that comment because, at the rate the fed and treasury are working (unconstitutionally) to print US dollars as fast as they can, we're guaranteed to see prices of EVERY commodity go higher in the years to come. all this aside, you won't see natural gas prices off a boom-bust yo-yo until the US does what it should so obviously do to solve the economic, environmental, and national security issues as a result of its 60% addiction to foreign oil: adopt natural gas transportation.

How Much Natural Gas Remains in the USA?

a much better source of information on this subject is Robert Hefner III"s book, "The Grand Energy Transition". i won't repeat the data and logical arguments presented in that book, or refute the lack of same in this article, other than to say natural gas is abundant - in the U.S. and in the world.

How Natural Gas Can Save the U.S. Economy

ripski: and yes, the TVA and coal industry have been very successful in covering up the Kingston disaster and keeping it out of the press. of course, it doesn't hurt to have obama and chu talking about "clean coal" every chance they get. it's an oxymoron and so are those two (removing the oxy).

How Natural Gas Can Save the U.S. Economy

ripski: yeah, i keep reading about lithium supply issues wrt building out a 100% EV. that is another reason i support the nat gas/electric hybrid solution. smaller batteries, clean, a longer range than a 100% EV, and doesn't depend on increasing coal consumption to recharge. i think the nat gas/electric hybrid is simply a no-brainer and i simply cannot understand why environmentalist in this country don't pound the table in support of that vehicle.

pragmistist: well, one thing is for sure: if congress doesn't pass the NATGAS act it will prove there is a conspiracy. they can no longer use the excuse that natural gas is in short supply or expensive. they can't argue it from an environmental perspective. the word is out: natural gas is abundant, clean, and cheap.

Shalegas: good article, and everything i read in it supports the US:
1) replacing coal electrical generation with nat gas generation
2) replacing foreign oil derived gasoline powered transportation with natural gas transportation
you would think that a country that has the economic, environmental, and national security issues the US has as a result of decades of coal and oil subsides would get a clue huh?

How Natural Gas Can Save the U.S. Economy

Elliot: i hate to keep bangin on ya, but you say automakers are rushing EVs to market? is that right? where are they? nope - automakers are rushing *gasoline* cars to market (!) btw: the honda civic GX gets around 200 miles per tank, which is roughly 8 GGE, or 25 mpg (on an energy equivalent basis). but this comes at a 30% reduction of CO2 compared to gasoline with a 100% reduction in the toxic particulates of gasoline. and would be powered by US produced nat gas. you can call this inefficient if you want, but i'll take that in a heart beat (especially with CNG prices at about $1 GGE compared to $2.50 for foreign oil derived gasoline). but what really is inefficient is being bamboozelled into thinking EVs are, at the current time, the total solution when in fact the cars are not here in volume, the supply of materials to make batteries for 100% EVs in sufficient quantity is doubtful, and to recharge them in sufficient quantity prior to a buildout of solar/wind/nuclear and transmissions lines (which just about everyone agrees will take a minimum of 10 yrs, likely between 15-20) means we'll simply burn more coal, which is bad. further, you still have not shown me how your plan will significantly reduce foreign oil imports as fast and as significantly as a natural gas transportation plan. next, if you like the foreign oil derived gasoline version of the Volt, wouldn't a US produced natural gas version be better? lastly, i'd buy the toyota nat gas/electric concept vehicle in a heartbeat, and it wouldn't cost $40k like the volt, maybe $24k. as i said, GM doesn't want to make the Volt in quantity. it's just (another) smokescreen.

pragmatist: i hope you are right about the nat gas act. i'll believe it when i see it. as far as the research bill, what research is needed? NGVs have been around for decades. that's just what $30 million thrown out the window to give lip service to nat gas advocate? but comapre that to obama spending what, $5 billion (with a "b") on "clean coal". how much did congress spend on "cash for clunkers"? 3 billion? i don't think nat gas transportation isn't even on obama and chu's and congress' radar at this point. with all the money being thrown down the toilet, none if it is going toward the real solution: nat gas transportatoin. you are definitely more optimistic than i, but i truly hope you are right.

ripski: why thank you. you liked this article better than:
seekingalpha.com/artic...
?

Bruce: well, i would have thought $145/barrel and $4.50 gasoline would have done it (!) obviously it did not. the psychology now is that gasoline is cheap at $2.50. 5 years ago that would have been perceived as outrageous. the american people are somewhat dim-witted on this issue. that is why *leadership* is so important. that is why chu should be *fired* (obama too, i sure hope he doesn't win a 2nd term...). energy policy should be job #1 in washington, and as far as i am concerned, they get an F-. but again, i have come to the conclusion that they simply aren't trying to solve the problem because to control americans' mobility is to control americans. and that is what they are after. complete and total control. it's the only explanation, and rationalizes the patriot act, the martial law legislation, the executive orders, and the new proposed clampdown on the internet i referenced in the article. if congress and the president (and the "new world order folks") spent as much time trying to solve the foreign oil problem rather than planning how to control things when the problem blows up in our face, the country could solve the problem, remain free, and usher in an era of prosperity the ivy leaguers fear because then they couldn't control it and feed off it the way they are now. haha, i just realized i ranted all over you...sorry, don't take it personal..it just flows out my fingers sometimes.

How Natural Gas Can Save the U.S. Economy

newamericanow: just got around to watching the video you referenced. and yeah, i should have mentioned the vaccination scam too as yet another bush/obamination plan gaining momentum....

How Natural Gas Can Save the U.S. Economy

Trane250: thanks for the comment on railroads. the reason i dont focus on railroads is because it is imperative we solve the gasoline addiction for american cars and trucks. 70% of foreign oil imports are used in the transportation sector and we burn 378,000,000 gallons per day. that obviously must change.

Edvishnu: well said.

mpherson: ahh, the old chicken-n-egg problem of NGV and refueling infrastructure. that is why i feel the Phill is so important. the Phill would enable 2 car families to have one car simply refueled in the garage. if enough Phills were sold, the stations would come. note that majors like Exxon and COP have jettisoned most of their retail gasoline stations. the signs are still up, but they don't own them. they are preparing for government control of gasoline and dont want to be on the front lines when that battle breaks out (imho).

HTLove: i totally agree with you that it is now apparent, without a doubt, that both political parties in the US are completely incompetent and tied together at the navel. either one gives us a S&B's type ivy leaguer bent on "the new world order" with them of course at the steering wheel. china will have something to say about that. regardless, you are correct that we desperately need the american people to demand a 3rd party and i wish like hell i had pulled the lever for ron paul instead of obama. i actually have more respect for bush: he was very bad news, but at least he didn't even try to hide obama. obama is very bad news shrouded and concealing behind an intelligent mind and an engaging personality. so, obama will turn out to have been the more dangerous of the two (imho).

jimbo: totally agree with you washington (see the last couple sentences of the comment directly above). totally disagree with you on the "dangers" and problems you cite with respect to nat gas transportation. more propaganda to dis natural gas. there are many countries across the world that have signficantly adopted nat gas transportation, and there is NO statistical basis for the unsubstantiated claims that nat gas fueled cars and trucks are significantly more dangerous than gasoline fueled cars and trucks. i challenge you to produce a credible study by an independent entity that concludes otherwise.

How Natural Gas Can Save the U.S. Economy

i was wondering why the number of comments was lower than normal this time, and i found out the yahoo feed didn't pick up this article(some bug on their end). anyhow, thanks to those of you who did read it and take the time to contribute a comment (or two).

WayneS: yup, agreed. Carter was the only president to signficantly reduce foreign oil imports (50%), yet the country seems to revere reagan instead and who did the opposite and ripped out the solar panels Carter had installed in the white house. that said, carter was somewhat responsible for the huge shift in electrical generation from nat gas to coal and for believing the exxon exec that US nat gas supply had peaked (instead of hefner who testified to the exact opposite). regardless, your point that the US has no energy policy due to our idiotic elected officials (count obama and chu in this group....) is correct. here is the energy policy the US so badly needs:
thefitzman.blogspot.co...

mc2406: agreed. very sad for a "democractic" country inhabited by so many very intelligent and educated people who know better but can't get congress to enact policies for the good of the many.

ART005: GM just doesn't want to build the volt, period. they are taking longer to build it than their first electric car the EV1. they are pricing it out of range. they are aware of the toyota nat gas/electric vehicle yet based the volt on gasoline. they aren't goint to build it in quantity. the volt is simply another distraction to keep the american public distanced from the real solution: NGVs and NG-electric hybrids (the best techincal and realistic solution, IMHO). and yup, NGVs are much cleaner (none of the particulates of gasoline).

john peterson: well, maybe all industrial users are switching to nat gas, but the biggest and most important are not (i.e. coal based utilities). in fact, in light of the Kingston disaster and the collapse in nat gas prices, they sill want to build MORE coal plants.....but yes, you are correct in that the fundamentals of oil and natural gas mean the traditional "ratio" is toast, and we are entering an era where big oil can no longer conceal the fact that hefner was right all along: natural gas is abundant.

rporter1: perhaps you can convince toyota to build the car. everyone i have contacted at the company has stone walled me -who can blame them, the US gov is stonewalling them!

bertil: thx for the compliments and i agree, the comments by SA contributors are sometimes as good or better as the article (espeically my articles). wrt CLNE, yup, they are making great progress and i fully support pickens and CLNE. that said, simply focusing nat gas on the trucking industry is not going to make the significant reduction in foreign oil imports the country needs. moving 50% of american cars and trucks over to natural gas would reduce foreign oil imports by roughly 6-7 million barrels/day, or, $450,000,000 US dollars per DAY @70/barrels. $1 billion a day at the old $145/barrel high. think about that amount of money staying in this country to feed our energy companies, farmers, and landowners who would receive the royalties instead of foreign oil producers who we then fight in the "war on terror". no-brainer huh?

jimkrow: nice post! and you're right, the majors don't want natural gas transportation because it would essentially mean freedom for the american people. freedom because most of the natural gas in the US is produced by small independent companies, and freedom because a Phill in the garage means americans could fill up at home. is it any wonder that the availability of the Phill is so limited?

baubau: not sure big oil can manipulate nat gas prices. note i explained that COP, BP, and CHK together produce less than 10% of total US nat gas production. nat gas production is dominated by small independent producers. btw, mass transit and conservation is in my energy policy:
thefitzman.blogspot.co...

Trane: thanks for the information, i don't check coal prices or the accuracy of your numbers because it is simply too expensive at any price, even free.

Elliot: ok, so you agree foreign oil imports is a problem. but you still haven't explained how we realistically and significantly reduce foreign oil consumption without using US produced natural gas in the transportation sector. if i may guess at the likely reason you have not done so, is because you, like me, haven't figured out any other way. so, there we are: natural gas transportation is the only domestic fuel that can be scaled up significantly and realistically enough to reduce foreign oil imports over the next 5 years. s, if you agree foreign oil imports are a big problem, then logically the efficiency issue you are focused on must take a back seat to the fact that natural gas transportation is the only way we can significantly reduce those foreign oil imports.

ART005: Elliot is also missing the following:
1) the time it will take to build out solar and wind technologies in order to recharge a significantly # of EVs
2) the time it will take to build out the transmission industry to move the solar/wind power to where it is needed
3) the problem of basic material supplies to make enough batteries for 100% electric vehicles of a significant quantity.
for those reasons, that is why i believe the nat gas/electric hybrid is the best solution for the next few decades. i fully support EVs and project better place, but anyone who believes we can signficantly deploy them over the next decade in significant enough numbers to significantly reduce foreign oil imports is deluded. even if we could get the cars built (and the batteries) it would mean drastically increasing coal consumption, and that is a terrible trade off the environmental "purists" in the US aren't pragmatic enough to acknowledge.

How Natural Gas Can Save the U.S. Economy

billjacobs: GTL adds extra cost and negates one of America's greatest competitive advantages: the 2.3 million mile nat gas pipeline grid that would allow 130,000,000 US cars and trucks to be refueling in their garage with a Phill. we need to move away from expensive dirty solid and liquid fuels and move to cheaper and cleaner and gaseous fuels (nat gas, hydrogen, wind, solar).

isaac: yes, there are a plethora of smaller O&G firms that will probablhy offer higher returns than the majors i listed. that said, listing the majors in my articles get more readers and they usually pay higher dividends. and, when oil goes to $200, how can one not own a company like XOM that produces 4 million barrels a day?

WayneS: well, if you can point me to one time that an XOM executive supported pickens and/or natural gas transportation in a major and public way, i'd love to know when and where. as far as i know, XOM has been completely quiet on this subject which is by default a lack of support. algae instead of natural gas? yeah, right.

nyetnichevo: you are absolutely right. congress has been bought and paid for by oil and coal money since the 1970's. same thing with pharma and AMA. so is there any surprise we have huge energy and health care policy problems? the only solution at this point is for the 50 states to use their right to call for a constitutional convention. we throw out everything but the constitution and bill of rights and start over. three main items i would suggest: term limits, a flat consumption tax, and disolvement of the federal reserve.

How Natural Gas Can Save the U.S. Economy

WayneS: sure, they have the natural gas. the problem i have with XOM, COP, BP and CVX is this: where is their support for natural gas transporation? where is their support for pickens? answer: nonexistent. instead, the talk biofuels (keeps us addicted to liquid gasoline solutions), algae, hydrogen fuel cells - everything but the one obvious solution: natural gas transportation. it just makes no sense to me.

MadHedge: yes, natural gas is much cheaper than coal or oil. this is because coal and oil have external costs not factored in a straight BTU comparison: in the case of coal, the external costs are destruction of the environment and health care costs. wrt oil, the external costs are military - the navy and air force to secure supply delivery around the world, and all branches of the military to fight the oil wars the pentagon/petroleum relationship demands. in both cases, the external costs of banking on the two "wrong" fossil fuels, and ignoring the "right" fossil fuel (natural gas) are bankrupting the country. the governent knows this, but Congress is paid off. thus, we are stuck using 20th century fuels (solids and liquids) and dragging our feet wrt the 21st century fuels (nat gas, wind, solar, hydrogen). you mention the oil/natural gas price ratio. i wrote an article awhile back where i mentioned that the "historical" price relationship between these two commodities has been shattered and will never return to any historical band. there are two reasons for this:

1) crude prices going higher due to worldwide supply not keeping up with worldwide demand
2) natural gas prices going lower to its abundance

so, both factors moving in opposite directions and the ratio is no longer meaningful.

JosephL: thanks for the compliment. i will have to read your articles. i am not as pessimistic about solar and wind as you are. i support them. that said, you are correct in that we have to be realistic in how long it will take to build out the infrastructures in order to be able to recharge a signficantly high number of EVs in order to significantly reduce foreign oil. this is the pragmatism that is lacking in current US energy policy. of course, obama and chu both support "clean coal", an oxymoron if ever there was one.

Elliot: you are against natural gas transportation because it is not efficient enough for you? ok, well, answer me these questions:
1) do you think US addiction to foreign oil is a problem?
2) do you think the US will go under if it keeps importing 60-70% of its oil in an era where worldwide oil supply won't keep pace with worldwide oil demand?
if you agree to 1) and 2), then please tell me how the US will signficantly reduce it oil imports *without* using natural gas transportation. i agree that efficiency is important, but i believe reducing foreign oil imports should be the top priority of the US government at this time. nothing is more important for our economic and democratic future.

JoeH: why thanks joe, that makes two votes (yours and mine) :)

AFlemming: i appreciate your response. my family has owned ExxonMobil stock for decades, i recommend US investors buy the stock. also, i am well aware of the qatari project and i am glad you mentioned it. with the huge investment Exxon has made for the Qatari LNG project, and with the total collapse of natural gas prices due to US on-land shale plays (which Exxon completely missed btw), why on Earth doesnt Exxon CEO Tillerson make some commercials supporting natural gas transportation? why the investment in algae research when you have the natural gas today and no research and investment needed? haven't the executives at Exxon realized after the events of the past year the extremely precarious position the US economy and equity markets are in and the role that foreign oil imports play in worsening that position? sure Exxon, BP, and COP make more profits on oil, but as i mentioned in the article, what good are their US dollar savings and paper stock certificates going to be if the US economy implodes on the next big oil spike? i just don't get it. it disturbs me greatly and it is a shame the men that run these companies can't see the terrible future in store for the US if we keep our cars and trucks running on gasoline derived from foreign oil.

The 'Green' Side of Natural Gas

the two "green" parts to natural gas:

1) it's much cleaner than both coal and oil (gasoline)

2) america has abundant NG reserves and therefore we save "green" dollars that we would otherwise be sending to foreign oil suppliers.

the fact that congress (and obama) cannot see these truths and seriously promote and back natural gas transportation borders on neglect of their oaths of office.