Brahm

Natural Gas from Shale: Emerging Plays

Natural gas is perhaps the new frontier now, more than any other form of fossil energy. As you note extensively, shale is going to be too big soon -- almost unimaginable five years ago! Perhaps. has tremendous global warming solution potential in the intermediate term. However, Governments including our US Dept of Energy, appears to be too lethargic about it. Perhaps, the ideology and lack of imagination of Dr. Chu and the likes of others in this present Administration, are the main hurdles in the immediate term.

Excellent brief review! Brahm

Friday Outlook: Commodities, Global Markets

You hit it right this time! Most of the maladies we have been encumbered with can go away with something like the old Glass-Steagle in place again. However, you are also right that this will never happen. We have the best set of politicians (and surprisingly this "people's" administration) and lobbyists on K Street that Wall Street money can corrupt.

Coal: What Happens if It Isn't Cheap and Plentiful?

The debate on coal reserves is somewhat off-track. Coals utilization in the immediate future should be viewed in the context of other fossil fuels and other alternative sources of energy, especially where its use is for power and ransportation applications.

Right now there are legitimate concerns that the availability of gas offers a competitive option to supplant or limit coal's utilization. Natural gas appears to be cheaper and widely available in the US at the least, and when coupled with cheaper combined cycle power plant costs in relation to coal burning (or gasification) technology plants, it does appear that coal's broader utilization in the intermediate future would be not sustainable on wider basis. This is especially true if recent predictions of mounting mining coasts will be realized.

China: Recovery or Just Slightly Improved Data?

Trader Mark makes several ineresting points, and on quite a few provides interesting departures from the usual Wall Street hype and its peculiar tendency to misinterpret data. On China though Mark's observations are astute, though there may be departures on interpretation ofr China's mimicking the Greenspun era philosophy prevalent in the US.

Perhaps, the need for China to act the way Mark has outlined in loosening its fist and its monetary and fiscal policies is the the Communist Party's realization that a painful slowdown of the economy or collapse would trigger widespread revolt and disorder in China among the masses, which the Paqrty may not be able to face easily. At the other end, the Party and Government probably also realize that the spending spree from consumers in the US and Europe is perhaps over for a long time due to dubious retirement prospectss for the majority of Americans as a result of the recent economic tsunami in the West. So what better time to inflate the domestic Chinese economy, infrasatructure expansion, and consumption. Necessary for survival of the Party and the order in the face of constraints on China's exports for years to come. However, habits can't usually be given up easily, and Chinese masses, long trained to be thrifty, may not fully oblige immediaterly. So, my guess is China also will face lower growth prospects (in the 5 to 8% range) for quite awhile, and perhaps some unrest to boot from the working-class masses..

Unintended Consequences of Four Government Policies

In lieu of "mark to market" what should we have so that shareholders and investors are not deceived out of their money, wealth, savings and pensions? Don't tell me to trust the market place which nowadays mean mostly and predominantly scumbugs (or in genteel language the boys on Wall Street and a few others, including the hypers and entitled insiders who gave us the bubbles in '98 and the recent one. The smart money as they call it nowadays are few in numbers and mostly consist of species like these, while the poor investors who usually take the lumps are the majority. But the investor are also part timers or indirect stakeholders because they are too busy earning a living elsewhere. As a result they are easy victims whose pensions and savings plans have gone to the dogs. With the two bubbles in the last ten years, there has been a massive transfer of wealth in this nation from them to the very few. It is as though investing has become a zero sum game, especially with the Government and SEC unwittingly asleep in their jobs!

Exactly How Bad Will It Get?

Is it posible that the comments and analysis provided are unnecessarily harsh and somewhat off-track? December's very low plant operating or production levels may reflect DOW's compulsion to reduce product inventories. After all very high accumulating inventory levels in the face of rapidly falling raw material/energy prices is a drag on the performance of a pet-chemical company.

Obama's 'Aggressive Attitude' Towards China Is Nothing New

Many other nations, save for the US are not habituated to stand idly by. and watch the effects of China's manipulation of the RMB. They do slap on tariffs or bans on selected Chinese importswhich hurt their domestic industries.. The US has proven to be helpless on this manipulation because America has been profligate on its consumption for decades and has accumulated trillions of debt to foreigners/Asians as well as at home.

IBM and Boeing Bring Work Closer to Home - Bad News for Outsourcing?

In this instance, Mr. Schwarz's analysis smacks of the kind of intellectualism which lacks balance and perspective. He alludes to Satyam's fraud as material for probable substantive reason for an American corporation for basing the location of its outsourcing needs to the US. He forgets that the executives of Satyam are sitting in jail even a week or two after disclosure of the fraud. The same fate is enjoyed also by a couple of the partners of the accounting firm of PWc who were responsible for overseeing the accounts for Satyam. If you follow me Mr. Schwarz, this a far cry from what would be the case in the US or a country in Europe. Get the point Mr. Schwarz? Do you know what Indian jail conditions are? No cots to sleep on, except on the hard floor. I will omit a few other gory details for you, hoping that you would sometime have the opportunity to find out more! No countrry club ambience such as those being decried by US executives sent up after long trials while enjoying American bail and justice. Do you know that Madoff and others caught under similar situations for much larger crimes in the US are still free even in their restricted home environment? Please re-think your views on risks for locating outsouricng enteprises vis-a-vis fraud, and come up with the proper views on deterrent issues.

Well, I hope you will also find out more about Indian justice and jails, and I look forward to more balanced pieces from you in future. For my part, I WOULD NOT WANT TO BE EVEN A RAT IN AN iNDIAN JAIL OR BE FACING UP TO SWIFT iNDIAN jUSTICE!.

Gazprom to Ukraine: No Gas for You

The price charged by Russia to W. Europe is based on a formula which is tied to the average price of oil during the period of six months before the commencement of gas delivery period (something like that!). So soon Russia or Gazprom won't be getting the price they have been getting recently for the gas. There will be a big step change of the price from the current price, becausethe price of oil recently has been way down.

World Bank Publishes Procurement Blacklist

The complete list has more than 100 companies which have been sanctioned by the World Bank. Why is this list so short?

You should approach the Bank to obtain the complete list.

Geopolitical Energy: Centered on the Caspian Sea (Part 2 of 2)

Good analysis, but perhaps somewhat skewed in parts. You failed to mention that besides the oil/gas concessions in Iraq for BP, Exxon, Shell and Chevron, the current Iraqi govt has also given concessions to Chinese companies and others. Future Iraqi governments are unlikely to skew their energy policy, especially issues on exploration and production rights, solely in favour of Western companies. Other nations' (state companies) have not been aggressive bidders yet due to fluid and unsettled circumstances in Iraq currently.

As Europe's dependence on Russia and Central Asian energy increases with time, a divergence in approach to Central Asia and Iran will most likely increase between the US and the Europeans. One can see the nuances of this divergence even now.

Celebrating Wealth Destruction

In some ways, it will work!! I agree that the consumption of the rich will not be affected much, but the excesses (rather I would like to use the words boorishness and foolish behaviour as their indulgences in motor-boats, private corporate jets, Riviera, etc) will be somewhat curbed as their bank accounts or weallth funds get siphoned off and look puny.

There will be innovation and saviing. I am sure of that, because when balances get smaller these people need further incentives to make the next million. What could be more incentive than relative poverty to their former balances! And, there will be lots of collateral benefits and windfalls for others on the lower rung of the economic ladder.

It is just like what I say about CEO and management pay. If shareholders are empowered (by the grace of the SEC!) to determine what the pay should be for them, then there will be incentives for CEO's and others on their team to perform the way they should. That is because the majority of sophisticated shareholders have the wisdom to understand that the greatest incentive for CEOs, boards and management to perform is if they realize that their job and pay depend on shareholder approval, and not on crony board members.

Expert: Coal Reserve Estimates Way Too High

In the last sentence of the article the words "and some energy gets lost in the conversion" is highly misleading and understates the issue. The loss is actually about 50%. That is how bad the coal to liquids approach is from the standpoint of greenhouse gases and global warming!

Natural Gas Transportation Is a Win-Win Technology

No option should be excluded. NG is a preferred option as far as I am concerned, and NG engine automobile should not have to be more expensive than a gasoline powered one. If it is now, it is most likely due to low volume sales and related service/distribution or marketing issues for the situation at present. However, there is no firm evidence on reliable supply issues for NG (quantity) on long term basis. No reliable resource estimates are available; hence NG should just be one of the options among others. It is better that way, and let consumers/ markets decide to the level and degree preference or use.

Electric is a complicated issue at this tyime. What is the basis for elctricity genration. NG? It would be folly of an extreme nature. Producing electricity from NG provides generation efficiency at the most of about 60% (using gas-fired combined cycle plants). Loss of 40%!! Tends to nullify the advantages of NG as a greenhouse controller. Then there is cost of (NG use) relating to inefficiency, investment i power plant and tgarnsmission facilities, etc and etc. Unless someone can show that the NG-electricity-electri... engine route is more efficient than an NG fired option car. Tall order!!! Transmission system problems are more easily resolvable than other problems I have indicated, becasuse costs for setting up a grid is not all that formidable an d other issues relatging to decision/regulation are not formidable.

However, begin focussing also on issues relating to storage batteries and the engine required. Current estimates I have seen say that this plug-in electric engine car is about $10K more expensive than a corrwponding gasoline fired car engine car. The public will not be amused of such price differences. That is why I say let all options be available, and we will probably need all for safety, economics/competition, etc and also limitations of fuel supply (NG, oil, environment if coal is one of the options).

The Pickens Plan Changes Its Strategy

The cylinder or space issues for CNG is not a significant issue in the case of CNG fired trucks.. The author's suggestions on liquid fuels, also advocated by many others and Mr. Pickens himself, is in my view a foolish intellectual contribution to the whole idea of global warming or energy independence due to the following reasons and others.

Synthesis of liquid fuels (diesel) involves a thermal efficiency of about 50%. That means it takes about 2 MM BTU of CNG to produce one MM BTU of diesel! This chips off significantly the advasntage for a tacit objective of putting out less carbon to contain global warming. The author should not forget that rather than the volume of the tank it is the weight of the fuel and its BTU density which determines the overall performance (mpg) of the engine, if other issues such as engine burn characteristics, etc remain equivalent for the two fuels. BTU to BTU diesel is much more weighty than CNG!

There is an economic dimension to the issues I have raised. The fuel material input costs, i.e. the cost of natural gas input for diesel, is double that of CNG as a direct firing fuel (low synthesis efficiency!). In other words, the present $6 per MM BTU CNG becomes a $12 per MMBTU input cost for diesel. Add to this plant capital, depreciation, interest on capital borrowed, ROR, etc, you have $16 per MM BTU cost. Quite a lot more than $6 CNG!!! A massive shift to the use of this kind of diesel will roil gas markets, bring gas supply concerns, etc, etc and etc. MY guess is there would be no advantage vis-a-vis oil, especially if OPEC or other oil intersts turn themselves as upsetters of the apple-cart. Competition!!!

There are other profound issues which I will leave you, MR. Pickens and others to think and browse about. But there are there. Without good thinking we may go down a sticky wcket again. Please! Us, little people, and OBAMA does not need another mess on our hands through shoddy thinking and slickness. Please continue the good work with my blessings! And, if you have the energy to do it check it out with me. I am "retired", though, but would not mind giving my inputs