SteveB/Colorado

Tight Sands Natural Gas: An Ignored and Promising U.S. Energy Frontier

Well, this is an interesting thread. Unfortunately, Mr. Dar's commentary about a lack of political will in D.C. & public policy hostility is not supported by objective evidence. One only needs to count the leases granted to energy companies here in the West in the past 8 years. Drilling isn't happening; wells are being capped and rigs idled; because we are in a recession and demand is way down.

Joe H. referenced "greenie blowhards" and FlipDog wrote "why are producers punished and 'drill here, drill now." Sorry guys, but you're both guilty of not doing your homework. As of June, 2008, energy companies held over 67 million acres of undeveloped oil & gas leases; onshore, mostly here in the West, and offshore (source: Republicans for Environmental Protection). It's not the environmental lobby stopping production; it's the companies themselves. And the June, 2008 figure comes from just before the recession fully kicked in. My thought is to grant no more leases of public land until the companies get the backlog down below 10 million acres.

Why Obama's Economic Policies Are Failing

The author wrote: "develop domestic oil & gas...." This is easier said than done. As of June, 2008, before the recession hit, energy companies were sitting on over 67 million acres of undeveloped oil/gas leases; onshore, mostly in the West, and offshore (source: Republicans for Environmental Protection). In the last year, many wells have been capped and drill rigs idled due to the recession-caused drop in demand.

Out here, we also continue to hear the "siren song" that developing oil share will solve all our energy problems. There is also the criticism of the Interior Department for not doing more leasing of shale lands. However, there is no economically feasible way to develop that resource. Companies have tens of thousands of shale acres already in hand, between leased R & D acres & their own private land in Colo., Wy., and Utah. The companies are doing little to develop this land and Shell Oil had admitted it will be several years before they know if their current experiments will work.

In short, it's easy to say "drill, baby, drill." But not so easy to make it happen. Perhaps Dr. Morici should have done some additional background research.

Republicans Offer Alternative Energy Bill Heavy on Nuclear, Oil Drilling

I agree with John Gordon. Nuclear should be part of our energy future, but building 100 plants in 20 years?? That isn't realistic. The proposal also overlooks that the US still hasn't solved the problem of nuclear waste disposal.

More drilling could be an answer. But how to get the energy companies to drill what they already have is a barrier. As of one year ago, companies had over 67 million acres of undeveloped oil & gas leases; on-shore, mostly in the West, and off-shore (source: Republicans for Environmental Protection). That was before companies began to cap wells & idle rigs due to the recession. More leasing is not an answer.

Dividend Investors: Running with the Bulls

I am also a follower of Dividend Growth Investors. The point I'm taking from this post by him is that rising dividends are a good sign that the economy may be slowly entering a recovery phase. But, since I need the income, a stock yielding 1% or 2% won't be in my portfolio unless part of a mutual fund.

Political Incompetence Could Drive Up the Price of Oil

Regarding "green shoots" of demand, Mexico is also in production decline. Too much petro profits siphoned off for social programs and also likely due to corruption; not enough profit being reinvested in infrastructure.

Is the air car an updated version of cold fusion? One must wonder.

High-Yield Canadian Royalty Trusts vs. Dividend Growth Stocks

I agree: interesting reading, especially the emphasis on portfolio diversity. I'm not sure, however, that the author is fully up to date on the CanRoys. Following is from the May issue of Leeb's Income Performance Letter (note: Dr. Leeb is historically bullish on energy stocks in general and generally bearish on the CanRoys).

His associate writes, in a review of HTE, "Under a 2006 proposal, Canadian trusts would be taxed like other corporations (at the 31.5 percent rate) beginning in 2011. Trust shares tumbled when the news hit because this would eliminate their major advantage. But other plans have since surfaced including bringing the tax back to 10 percent and not allowing any more trusts to be created."

It would appear that the plan for the big change at beginning of 2011 is not a done deal. Or to put it differently, cooler & smarter minds may yet prevail in Ottawa.

For Konchan, you can recoup some of the Canadian taxes you pay when you file your US tax return by completing form 1116.

Where's the Oil?

Volatility may be an enemy to development. Perhaps that is a reason that as of last June, when prices were at their highest, some 67 million acres of awarded oil & gas leases both onshore, mostly in the West, and offshore, were sitting idle. Yet, there was all the election year noise to "drill, baby, drill." This year, we have big energy crying that Department of Interior won't award leases in oil shale country, even though Exxon & Shell have tens of thousands of undeveloped acres on their privately owned oil shale lands. Go figure.

A California Default

Putting aside all the noise in prior comments about Obama and returning Calif. to Mexico, California to me is a unique quandary. On the one hand, there is what some might call the welfare-handout lobby that insists there be no cuts at all in any social programs. On the other side are the so-called conservatives who refuse to raise taxes to cover even some basic needs & costs. Sadly, not even Schwarznegger can get two such diverse & polarized sides to try for a middle ground.

$200 Oil Is Coming While We Waste a Perfectly Good Crisis (Part 3)

I agree with several posters that it's hard to read through such a wealth of comments. Some things stand out among the comments. One poster referred to eco-terrorists not allowing development of oil shale resources in the Green River Formation. One little problem: there is no proven economically viable technology to extract oil from shale. Chevron & Exxon together own several tens of thousands of acres of oil shale land & are doing exactly nothing with it. Shell advises it will be several years at the earliest before they can determine if their in-situ high heat & freeze wall technology is viable.

Another problem with oil shale production is that it will consume enormous amounts of water and energy. Some say the energy may come from on- site or nearby natural gas. But where will the water come from, in an already arid West? Funny that no one talks about, or even knows about, the 1922 Colorado River Compact and how the water in the already over-appropriated river system gets divvied up. Maybe southern California and the Front Range of Colorado will get dried up some so folks back East can still drive their pickups getting 12 miles per gallon??

Second point mentioned by no one: at the time of very high oil & nat gas prices in June , 2008, energy companies were sitting on over 67 million acres of undeveloped leases on shore, mostly in the West, and off-shore. "Drill, baby, drill" was a fun mantra during the election, but was directed in the wrong place. What is the point of continuing to award leases to energy companies just to see the leases sit and enhance the corporate bottom line? Sort of gives the "market" and "reliance" on market forces to accomplish everything a bad name.

All in all, Mr. Quinn presented a thoughtful article. Not sure I agree with each & every comment. But he still gives a lot to think about. Seems to me that we will need all possible energy options to be in play. Final thought to several: give the "eco-nazis" rhetoric a rest; use of that sort of ugly rhetoric doesn't solve anything.

Banking on Energy (Rather than Currency or Gold)

Intriguing concept; but will be interesting to watch how it plays out in the "political" world. Your comment about our "baroque" military was thoughtful. A recent GAO report noted that 64 of 96 current arms procurement programs are running a cumulative $296 billion over budget. And all this with a military that in the beginning years of the Iraq debacle, couldn't even provide body armor for soldiers.

We also just launched another giant aircraft carrier designed to fight the Soviet Union on the high seas. Oops, they must not have noticed the departure of the Soviet Union via implosion in 1991.

Is the Russian Bear Hibernating?

Jonathan: I agree with your comment about the lack of diversification in the Russian economy. Still the Russian market is too large to ignore. Even though it is way down, I'm still holding a Russia/E. Europe mutual fund. Some of my continuing research indicates the Russian government is slowly "getting it" in terms of the need to have economic under-supports besides oil & gas.

Unemployment Reaches 8.5%; Businesses Gird for Depression

I like ArkansasAngie's comment: "how Republicans pompously and incorrectly wore the fiscal conservative mantle....cutting taxes and spending like drunken sailors is not conservative economics..." At the risk of verbally assaulting an icon, the whole problem of cutting taxes and not cutting spending began with Reagan. It was greatly exacerbated under Bush/Cheney, doing away quickly with Clinton's bequeathed budget surplus.

The author misses one major point in his commentary about spending. A recent GAO report highlighted some 64 of 96 major arms procurement programs are running a cumulative $296 billion over budget. Eisenhower warned about the military/industrial complex decades ago, but we haven't listened. The trick is how to find and create a reasonable defense without utilizing unnecessary weapons systems; $500 toilet seats; and keeping open unneeded bases on the dubious grounds they create sustainable jobs in local economies.

Depression Still Avoidable - David Schmittlein

I'm not quite as optimistic as Cetin H., but I don't believe we are in a "light" depression either. Yes, there is a lot of debt. But who has it? I've read that about 1/3 of homeowners have no mortgage & own their property free and clear. I'm fortunately in that category. Something close to 90% of mortgages are being paid on time. Then there are all the renters. Further, many persons have no car loans or even credit card debt. I use credit cards sparingly and pay the cards off each month. Yes, there is a lot of unemployment in some states. Here in Colorado, it seems mostly in the construction sector which is cyclical anyway. Maybe we do have a lot of something we can do without: media hype.

Expect Oil to Approach $100/bbl Again By Summer

Worth noting is that even with oil at $145 per barrel and nat gas at $13 MMbtu last summer, energy companies were not developing leases. Stats I saw from last June showed only about 1/4 of leases on shore (primarily in the West) and off shore were being developed. I think all the "drill, baby, drill" last election was just a bunch of hype. I agree that the long term trend in prices is up and up. But I would be very hesitant to want a lot of additional leasing until the companies develop what they already have; something like 68 million acres worth.

Why Is Oil Trading at $53 When Supply and Demand Is So Bearish?

Basehitz wrote: "unwillingness to drill for our oil (in the US)." So true. Some stats from last June (source rep.org). "of the federally managed outer continental shelf, 44 million acres of coastal waters have been leased. Only 10.5 million acres are in production. On public lands, mostly in the West, 47.5 million acres have been leased. Only 13 million acres are in production. When congressmen clamor to open more lands and waters for leasing, their constituents should ask them why so many existing leases are not in production."

This was the situation when oil & natural gas prices were at record highs. Yes, we weren't drilling for our own resources. It's hard to drill when companies are stockpiling leases for the corporate bottom line.