Brahm

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.

Russia Looks Better on Paper Than in Real Life

Having been part of a "superpower" before, Russia now is not an ordinary emerging or developing country. There are severe anomalies in its characteristics. It is both modern (in education levels, arms industry and power, mining, etc) in many respects as other advanced nations as well as primitive (political institutions and capabilities, infra-structure, industry, standard of living, etc) as are many developing countries. It is not surprising that it looks better on paper than in appearace on a day to day basis as found in its confines.It will be so for a long time, and should not be underestimated or ov er-estimated.

Based on its history and its czarist past, it is expected to protect its national interests, exert influence on its immediate neighborhood, and, when the opportunity arises to its favor, flex its muscles. However, it does not mean that it cannot co-exist peacefully with its immediate neighbours, provided the neighbours don't give it cause to believe ithat its security is being challenged.

Distant powers have to be mindful of this as well, especially if they are not willing to risk their own involvement in direct armed confrontation with Russia. Before they fully become capable, these distant powers or superpowers have to counsel moderation on their proverbial future allies on Russia's borders. In the meantime, these powers should assist these nations in economic development to build internal strength without posing as threat to Russia..

Barron's Banks on $100 Oil

Oil bulls, or should I say radicals, should not forget that even an average size recession will topple consumption of oil substantially, if prices remain at current levels. I bet uncle Ben and others in Wall Street are fudging economic numbers and conditions to avoid the R tag. To all intents and purposes, the US economy is mosgt probably in mild recession at this time. If you exclude the increase in energy related spending of the typical consumer from the GDP numbers over that of '07, you may well find that the numbers representing i2nd quarter '08 GDP are probably about even or somewhat lower than those for 2nd quarter '07.

Last week,for example, the EIA reported that gasoline consumption was lower by 1.8% from last year (?). Nobody can make a rational case that the massive inceease in the price of energy has not or will not change behaviour of American consumers or drivers, especially those at the lower end of the middle class. I have seen changes in behaviour of drivers in the middle and upper middle class on the street I live on. SUV's. common on this street formerly, have been traded away or quite often are found to remain parked for very long periods. The formerly shunned and lowly small cars are becoming fashinable to drive!

So oil bulls, in my view Barrons has something to its argument for at least the immediate period for the short or intermediate term. A 2% drop in consumption over a couple of months in the US will do wonders for the price of oil. Long term though the price of oil is still going to be on uptrend.

Reasons to Love 3-Digit Oil

The energy and global warming conundrum is not going to be resolved by just inventing or resorting to hybrid, electric and smaller automobile vehicles. It really needs "change" and real drastic and fundamental change change in our life-styles in many ways. Smaller and more energy efficient houses, the end of suburbia and distant commuting lifestyles, much more public transit which is affordable, the end of intercity commuting for going to work in an office and related, perhaps mega- and livable towns/cities coming into fashion again, etc and etc. What the American car driver will save by using hybrids, electric, hydrogen and etc and etc would be more than offset by several times by newly affluent Asians and Latin Americans. The American model of lifestyles have to undergo rapid change to save this planet, because that is the basis or ideal which the world at large tends to copy. And, that copying on a mass-scale is marching us all on toward bigger and bigger disasters in all kinds of ways!

1,238 Billion Barrels of Oil Reserves: Is This an Oil Price Bubble?

Hey, people or rather consumers and investors: It is not the end of the availability of oil, gas or what we call hydrocarbons. It is the end of the availability of CHEAP oil and gas. More oil and gas will be discovered or drilled from wells, formations, and seas which are more difficult and costly from the point of view of eccessibility. The second issue, which is as relevant as the first described above, is whether the world in general can afford to consume at a rate as high as that currently being consumed in the US and the other OECD countries. If you are concerned about the expedited rate of global warming, we have witnessed in the last 50 years, the answer will be an emphatic"NO!". No ifs, buts or maybe's to it!

BP CEO: Three Oil Myths

Paul is either missing or ignoring some important considerations in this discussion on supply and demand, just as Tony Haywarfd is. It is true that hydrocarbon is still adequately available for some time to come from below the ground. However, if you qualify this words oil/gas/hydrocarbon with the words "easily accessible" (accessible here as connotations of depth, below the ground, continenetal shelves, from difficult formations, technological problems or limitations, substantially higher costs/investment levels, etc and etc), then the implications become very clear and unpleasant! Then one begins understanding why OPEC, Russia, and many other nations outside OPEC are reluctant to expand their investment substantially in order to lower the price of petroleum. Or to deplete their cheaply available oil from easy formations to exploit at prices they consider as too low. If their reserves are not too large than their reluctance is all the more understandable, especially if they have nothing more in their economy in addition to energy. The behaviour on these counts is not very different than that of the international oil companies. Remember these oil companies were reluctant to invest in the past when they considered the price of oil/gas as too low, or it was too high according to their estimate to be sustainable (EXXON!). Outside the USA and some of the OECD countries oil/gas resources are often conttrolled strictly by the respective Governments, and this is also a consideration which is limiting for exploitation quite frequently.

Russia is a special case, because Russia is paranoid, based on its history following the Cold War, about getting dismantailed as a nation by hostile forces of the West (Chechnya and Dagestan episodes, etc). So it is using the oil and gas spigot as part of its diplomacy and strtegic approach. And one can't blame for this attitude (George Bush I and II, Clinton and to some extent the European Union) used this to try to change thei Russian geography, and its influence in the former Soviet rerpublics, etc. Reagan, Bush I, Clinton tried to stop pielines from traversing through Russia to starve it of inflluence and revenue, etc, etc. Still so under Bush II, if he were able to manage it, as far as pieline is concerned.