bindlepete

Exxon, XTO Deal Could Boost Natural Gas

Exxon knows that " peak oil" is a reality. They also recognize that Climate Change sees Natural gas as a preferable fuel and that we have huge volumes of natural gas available in the shales, geopressured (supercritical connate steam) reserves and other formations.

Further, they have some patents on producing the geopressured reserves. With the sale of European refineries and domestic gasoline stations they have signaled a shift away from oil. Add to this their feeble albeit expensive move into LNG they tell us that natural gas is the big future fossil fuel and that is where they are going.

One problem is the " glut" and low prices. Soon they will be seeking price controls to get the price up as they did in the early 70's. It was then done with " allowables" but soon it will be pure federal price fixing.

Two ways of doing this are 1) Give the Federal Govt. a tax on the fule so they will be able to pay down the deficit on the back of natural gas users. 2) make the case that they need a stable market price to make the investment in drilling and producing the natural gas. This is phony but the Congress are dummies and easily bought so long as they get a payoff. ( contributions and the tax game)

At any rate all of this is good fro Mesa, and Chesapeake and the producing states who will get a bonus in royalties. It is an easy sell and Exxon is not a dummy. Propane will also have to be taxed at the Federal level to make a level playing field.

Only us wood and anthracite burners will escape the new tax.

I can smell this coming in about 2 years time.

Be well and enjoy the holidays. I own a mess of XOM

Global Warming: Investment Implications

Energy demand will continue to increase relative to resources and hence with a declining supply in fossil fuels it is the best bet I can see as an investment.

Now the Federales will certainly interfere with laws and subsidies to one sector over another but I suspect they are going to avoid the overt price controls they have tried in the past other than to skim more taxes off the top.

Hey as I say it is a pretty good bet.

Disclosure: this is where most of my money is riding but I do have a favorite which is PetroBank (Canada PBG.to) with it's low environmental impact heavy oil recovery system THAI. Look it up for fun and profit.

Hey nothing's perfect but as I say it is a pretty good bet.

Investing in the Pickens Plan, One Year Later

Now what the Hell does this mean?

"The UPS study also indicated that CNG trucks require greater use and longer preventive maintenance inspection cycles to contain the otherwise 29% higher maintenance costs in comparison with diesel trucks."

The real opportunity lies in converting natural gas to the liquid methanol and mixing that with 15 % gasoline to produce M-85 auto fuel. For the diesel fuel make dimethyl ether.

Of course this would annoy the oil industry but maybe they can't buy every one forever. The Chinese are into this at a 2 million bbl.a day level and doing it from a much more difficult feed stock, coal.