epeon

BP Income Statement Analysis for September 2009 Quarter

As I have said many times, I believe oil is a great longterm investment. Its price is determine by worldwide demand, not just US. So, it is somewhat immune to the shenanigans of US politicians. Secondly, BP is a major that pays a good dividend. So, you get paid while you wait for the next oil spike. All good. So, I keep a big part of my portfolio in BP.

What a Portfolio Approach to Climate Policy Means for Your Stock Portfolio

From an economic perspective, investing in alternative energy sources is generally foolish. For example, the cost of electricity generated via wind is about $.18/kwhr which is easily three to four times the cost of electricity generated by coal. There are exceptions, of course, nuclear power being one.

All of these alternate energy scenarios are based upon the premise that government policies will be implemented and maintained while they punish citizens (i.e. voters). Is this really plausible? If you believe this, then alternate energy longterm makes sense. However, if you believe this, why not just invest in China ETFs? They are not about to drink this climate change kool-aid and they will make out like bandits as industry shifts there to avoid this nonsense. Even if the west comes to its senses, China is still a pretty good longterm investment. So, I say, the best alternative play is China ETFs.

Tiber Oilfield Spells Major Upside for Prices

Nothing in your article presents anything I disagree with. Oil prices are, inevitably, going up. It is only a matter of when. This is one reason I like BP very much.

Why Invest in Oil Over Alternative Energy

First, the amortized cost of windpower is currently $.18/kwhr. To put that in perspective, coal is on the order of $.03 to $.05, natural gas is $.07 to $.09. so, using windpower will, at least , double your electric bill.

Secondly, a carbon tax will favor, most of all, nuclear power. Not a bad outcome, but that is what it is.

BP Trending Up

I totally agree. I hae about 30% of my portfolio in BP. I think oil is not going down. People focus on the demand destruction which is true. However, they do not realize that there is a solid 5% per anum depletion in oil supply. This is why the oil industry spend $1 trillion/year to maintain supply. Well, in the last year almost every oil company is cutting. The result is that we are going to get depetion which supports the price of oil.

Also, BP has a nice 6% dividend while you wait.

Crude Oil Demand and the Quick Recovery Hoax

First, the oil majors did not have losses. What they had was a reduction in their earnings. That was pretty inevitable given that oil prices peaked last year. Secondly, as I write this, the price of crude has topped $70/bbl. The oil majors will do fine on that price.

What you do not understand, it seems to me, is that even if deman is flat, there is a 3 to 5% reduction in supply every year via depletion. That is the reason why this industry spends a $1 trillion/year to keep supply flat and not declining. However, that spending has been cut. Which means that in a few years supply willl drop off the table. At that time, we will get another spike.

BP: Emerging Stronger from Recession

I like BP as well. I took a big position this spring in the $45 range. I haven't made much yet, but with almost 7% yield, I can be patient

How High Will the Price of Oil Go?

I agree. My favorite play for oil is BP because of its 7% dividend yield. I do not know when oil is going to spike again, but it will. In the meantime, I collect the dividend.

I do like some energy MLP. My favorite has been ARLP. However, now that it is near $40, I don't see a lot of appreciation. So, I hold it and will write covered calls against it, but I won't invest more into it.

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 5

First, I do agree with much of what you say. I have been buying BP for some time. As you say, good dividend, reasonable safety, and under $40 it represents a very good investment. Oil projects have been greatly cut back. This means that oil depletion will start to degrade world oil production. I feel that within a year we shall see this and in two we will have another oil spike.

Secondly, I like CEL as well (bought 5000 shares at 21.25). Excellent economics, good dividend, excellent cashflow. A very good investment with a good benefit/risk ratio.

By the way, I do like the MRLPs as well. These include the pipelines and ARLP as well. I think coal will be a long term winner. Its economics will overcome the global warming hype.

Is There Enough Natural Gas?

The whole concept of this article is terribly wrong. It is not the government's job to determine how energy is developed and used by our society. Or, is that clause in the constitution one I have forgotten about?

There are lots of sources of energy. The marketplace makes these decisions. If natural gas is truly cheaper then coal then people will build natural gas fired boilers. If we have learned nothing in the last century we have learned at least this: the market does a far better job of allocating resources and picking technology then does a central government bueracract. This is true whether the bueracrat is in Moscow or Washington, DC.

The government will continue to back things like shale oil, ethanol, windmills, solar cells, etc. All of these are sinks for taxpayer money. And, when they are no longer trendy, they will be shut down one by one.

The Slippery Slope of Declining Petrochemical Demand

Market economics. You raise prices, demand goes down. The worst part for Opec is that the west is making structural changes that will be irreversible. In the past, Americans switched to smaller cars which reduced demand. And, when oil went down, everybody bought bigger cars. Now, people are moving to hybrids. Soon, people will go to plug in hybrids. People have gotten burned enough that they do not want to take the risk of being vulnerable to oil prices. Also, governments don't want to be in that position either. So, western governments will subsidize plug-ins which will make a shift to electricity. This will displace oil with lower cost fuels. And, once this starts, it will be irreversible.

Will the Price of Oil Sink Much Lower?

Pretty much true. If oil doesn't go up, the tar sand projects will end. So will a lot of offshore oil projects. However, I am pretty confident that oil is not staying in the 40s.

Energy Financing Is Gone with the Wind

This is, of course, completely expected. These alternative energy projects are marginally economical. They really only make sense with big tax subsidies and even then, just barely. With the cost of conventional fuels dropping, politicians are loosing interest. So, just like oil shale in the 70s and ethanol in the 90s, these trending types of power will slowly perish.

Why "Drill, Baby, Drill!" Does Not Translate Into Effective National Energy Policy

Of course, drilling for oil offshore will not solve America's energy problems. We will, according to most of the studies I read, get about 1 million bbl/day. But, it is a good first step and I would sure rather have that $100 million/day flowing to US companies.

In the longrun we will be moving to electric cars. We really don't need an energy plan by the government. First, five year plans almost always don't work. Secondly, the last government energy plan was based on ethanol. We know how that worked.

The market is moving us away from oil as long as oil is at or above $100/bbl. It is going to happen