Brad DeLong's Semi-Daily Journal (2004)

If he promised the price would go down, he lied. I paid $2.19/gallon yesterday (Hawai'i).

It is $2.40/gal for premium unleaded here in Calfornia. I'm glad I have a car that takes regular unleaded, only $2.17/gal.

I understand that the prices will actually remain high no matter what Bandar promised. The price is being driven by demand from Asia, particularly China. They will now start consuming oil like Americans do, it seems.

Look for $3+/gal by the end of the year.

I think even the Saudi's know that Cheney-Bush are not in their best interest. The invisible hand is writing them out of the script os the Family Saud can remain in power for another generation.

I think it is quite possible that if Bush can show the price of gas at the pump has a major drop by, say, October, that will fulfill the condition and give Bush a big boost at the polls. Bush will be able to say that the drop happened on his watch. So did 9/11, but that was the Clenis'(TM) fault.

I think it is quite possible that if Bush can show the price of gas at the pump has a major drop by, say, October, that will fulfill the condition and give Bush a big boost at the polls. Bush will be able to say that the drop happened on his watch. So did 9/11, but that was the Clenis'(TM) fault.

Yes, it's now too late in the year for any fall in the price of gas to have any substantive effect on the American economy before the election.

However, they're only concerned about appearances: the American electorate is not renowned for its attention span.

So if gasoline is $3 by Labor Day, and drops to $2.50 by Election Day, voters will remember only the sense of relief they feel about the 'decline in prices.'

I should have said my $2.19 was for regular unleaded.

Regarding China, I wonder if the auto manufacturers are going to revert/continue their gas-guzzler production at their plants there? I'd think the SUV market would be small compared to the Chevette/Escort equivalent. Anyone know?

The price of oil ripples through the economy over many months in many different ways, not just at the pump. OPEC raised prices last fall, and raised them again this winter. That tells me that the Saudis don't want Bush to win.

In a recent NYT review of Unger's book "House of Bush, House of Saud", Jonathan Tepperman of "Foreign Affairs" defends Bush by arguing that it would not be possible for any US President to put any pressure on the Saudis. Thus Bush's catering to them is really OK and anyone who raises questions is a conspiracy theorist.

It remains true that 9/11 was manned, led, and financed mostly by Saudis, and also that the Saudis have been uncooperative in the investigation of this and all previous attacks on the US by Saudis (Cole, Riyadh, Lebanon), and also that the Bush people have not pushed the Saudis very hard.

The warbloggers don't care. They're too busy making jokes about the French, the Germans, and now the Spanish, and explaining why (because of McGovern 30 years ago) Democrats have no credibility on defense. (As if Nixon accomplished anything).

Is it in the Saudis' power to reduce oil prices? Paul Krugman doesn't think so. Then again, I'm sure we've all already read that column, so I won't repeat it.

It's $2.39 for _regular_ in Portland, OR right now. Of course, self-serve gas stations are also illegal in my state, so gas prices are always higher here.

Zizka,

...and also that the Bush people have not pushed the Saudis very hard...

...and that the Bush family is in bed with Prince Bandar.

The last person one should ask is an analyst for the facts. Yes, the recent price hike has been due to an increase in the percieved risk premium. However oil prices began rising in coordination with two factors - the economic expansion of China and the fall in the value of the US dollar. Remember when Snow inaugerated a weaker dollar policy in order to accomodate a deflation in Greenback's value and reorient the US as a lower cost provider to Europe through a loss versus the Euro?

Now Europe is outsourcing to us, partly as a response to the euro-dollar issue. However the dark side of such a deal is that since oil is denominated in dollars a corresponding fall in the dollar must be matched by a rise in the price of the commodity price. A fall in the dollar directly corresponds to a fall in the purchasing power of oil in euro denominated currencies.

In addition as China expanded its economic growth and consumption to truly stupendous heights, this increased world-wide demand to supply for oil. The risk premium seems at this point to be little more than $3 or so pb US light crude effectively.

If I remember the New York Times article correctly, Saudi Arabia promised the use of certain bases for intelligence operations, certain logistical support, and certain intelligence support for the invasion of Iraq. Needless, to say, nothing about fighting terrorism, or as best I can tell, about keeping oil prices down.

The Saudi's can, at least in the short-run, boost their production, and more importantly, pressure OPEC to raise everyone's quota. If the rampant speculation about the long-term health of their fields is true, it may be contrary their self-interest to do that.

The biggest factor, I suspect, is actually the decline in the dollar versus many currencies. OPEC contracts are denominated in dollars, so they are leaving money on the table in those countries and they're being hurt whenever they buy from the EU or India, among others.

You don't hear the Europeans screaming, because for them it nearly a wash: oil costs more in dollars, but they're paying in Euros that are up 10% in the last year and 33% in the last two years against the buck.

I'm equally sure the Saudi's aren't inclined to do Bush the Lesser any election favors, given how how he screwed up Iraq. Instability there will threaten the kingdom for years to come.

Why rising fuel costs will have negligible effect on fuel economy.

The chart below shows the fuel cost of driving a vehicle for 100,000 miles given $cost/gallon (rows) and fuel efficiency (columns). As fuel efficiency doubles from column to column, the fuel cost will be cut in half. Therefore, the lifetime cost saving (assuming 100,000 miles) is also equal to the amount from column to column, At $2 per gallon, for instance, doubling the fuel efficiency from 20 to 40 mpg would be save only $5000 over the life of the car.

Current technology such as hybrid engines allow greater fuel economy, but have a cost. At $2 per gallon, a car that got 40mpg instead of 20 mpg would only be worth it if the extra cost were less than $5000. If technology to go from 40 mpg to 80 mpg cost $5000, the fuel would have to reach $4/gal to make the purchase worthwhile.

10 mpg 20 mpg 40 mpg 80 mpg
$1 10000 5000 2500 1250
$2 20000 10000 5000 2500
$3 30000 15000 7500 3750
$4 40000 20000 10000 5000
$5 50000 25000 12500 6250
$10 100000 50000 25000 12500

However, increases in fuel mileage increase the supply of fuel and drive down the price (as happened in the early 80s after the CAFE standards kicked in). As some people switch to higher mileage vehicles, it becomes less expensive to drive the gas guzzler. The good citizens that conserve fuel end up subsidizing the gas hogs. This is why, in my opinion, the only real way to keep fuel costs low is through gas mileage standards or a tax on fuel inefficient vehicles that would even the costs. Otherwise, the only sure way to use gas price as a motivator for fuel economy is to raise prices well into the $4-5 range. Prices at that level would have significant negative economic dislocations.

The alternative hypothesis is that the Saudi's are seriously scared of a revolution and are trying to build up finicial reserves in preparation. And for them its irrelevant whether Bush or Kerry is president since neither is going to help them out when the bullets start flying.

Wow,the lying liars got lied to by the lying liars. What a concept!
$2.09 in Honolulu,$2.40 on Maui

"Didn't Prince Bandar bin Sultan promise George W. Bush that the House of Saud would make sure that oil prices were conducive to his reelection?"

No. This has been as debunked as it possibly could have been.

bakho wrote, "This is why, in my opinion, the only real way to keep fuel costs low is through gas mileage standards or a tax on fuel inefficient vehicles that would even the costs."

Another reason to tax *SUVs* is that they obstruct the vision of cars behind them, causing the cars to fall back. This leads to fewer vehicles making it through intersections (which in turn is a big factor behind traffic congestion). IIRC, one analysis claimed that because of this effect, SUVs increase traffic congestion by about 10%.

Wow, Bakho, that was one of the coolest analyses I have seen in some time! Damn, I wish I had studied econ in school instead of biology and medicine. Then I might know something about how the world REALLY works.

Given that the cost of Gas in Europe is about $4-5 per gallon, it explains why they drive fuel efficient cars there, and why we don't here. And, why we should raise the gas tax to make it cost $4 per gallon to encourage efficiency and use the money to subsidize public transportation and alternative fuel sources.

Maybe saudis CAN'T increase production? Remember, many oil companies have overstated their reserves and are now correcting them. Maybe Saudi-Arabian fields are all tapped and can't produce any faster, and in fact, at a dropping rate?

Quick disclosure note : I'm a promoter in the oil industry, currently working on an Australian oil IPO, so energy prices are a subject close to my heart.

This is the word on the street about the sustainibility of Saudi oil reserves

http://www.gasandoil.com/goc/company/cnm41257.htm

This is Saudi Aramco's reply

http://www.saudi-us-relations.org/energy/saudi-energy-reserves.html

Are the Saudi's telling the truth ? I think so. The tech revolution is real in the oil sector, and I think the world has more oil than we think. Sure, it's likely to cost US$20-30 to find and bring to market, putting a floor under prices of US$30 and up, but we've had 30 years worth of oil for the last 50 years or so.

pugeot produces a very good diesel car engine, the milage per gallon is much higher than a petrol engine. Why so few diesel cars?
Ps I unserstand they run well on home heating oil.

Is there a useful link between oil prices and interest rates?

My naive assumption would be that fallinginterest rates should exert strong upward pressure on oil prices through increased value of future consumption, especially related to scarcity pricing, at the same time if anything there ought to be a positive correlation between future demand for oil and future demand for money making for a double whammy. What is the duration of a barrel of oil?

Ian,

Didn't Saudi Arabia recently announce that it is bringing a new field into production this year?

Trying to make good...

http://money.cnn.com/2004/05/10/news/international/saudi_opec.reut/index.htm?cnn=yes

In real terms if the price of oil is $40 /bbl
now, it was about $100 at the 1979 peak and about this $40 level in the mid-1970s.

Oil prices and interest rates have a very strong positive correlation. Part of the causal relation runs from oil to rates but the dominate factor are that the same factors that drive oil up--world growth and inflation -- also drive rates up. The CRB of industrial raw materials index is a great leading index of both rates & oil.

The Saudis simply don't have the production capacity to keep their promise to Bush. The primary reason for the recently announced cuts in OPEC production quotas was to hide this fact.

If you think new drilling technology is going to save them, go to Oman talk to Shell.

The Saudi's can, at least in the short-run, boost their production, and more importantly, pressure OPEC to raise everyone's quota.

Done today.

non economist- actually, Europeans drive a mix of cars, some fuel efficient, some not. The average mpg in Europe is around 40. The EU has been discussing mandating that the new cars AVERAGE about 47 (diesel) and 42 (gasoline). They don't see gas prices pushing up better fuel mileage. Europe provides incentives for purchasing energy efficient diesel to defray the technology cost. For comparison, the US is currently around 25 mpg Avg and dropping.

If US fuel costs were $5/gal, then that would have a huge impact on the trucking industry and the costs of shipping items. It imposes a cost on commuters that they cannot recover. Increasing fuel costs by increasing taxes is a very regressive tax. People will stop driving as much which will have negative effects on tourism. The US does not have the infrastructure in place (alternative transportation) to cushion a fuel price shock.

Autos are expensive medium term investments. It is not possible to dump a gas guzzler purchased last year for a fuel efficient car this year. Fuel efficiency can only be brought in over a longer period of time. As those higher mileage cars come into the system, the price of fuel will drop and make gas guzzlers more affordable. Higher fuel prices will discount the value of gas guzzler used cars, but will not take them off the road.

Yes, it is possible to drive Americans to buy fuel efficient vehicles by raising fuel costs. However, that way has more unpleasant consequences than mileage mandates such as CAFE.

My point is that fuel costs have to go up to very high levels before any incentive kicks in. Once efficiency reaches 40 mpg, fuel has to reach incredibly high prices to make new technology cost advantageous. My point is that CAFE standards are a much less painful approach to fuel efficiency than rapid fuel price shocks.

Would you rather have CAFE standards and try to keep gas below $2.50 per gallon or not have CAFE and pay $5 per gallon? I have an idea where the political consensus might lie.

NYT online this morning. I didn't read the article but it looks like someone has gotten the Saudis on message at last.

To me the major point here should be what I said -- the need to cater to the Saudis (whether it's specifically a Bush problem or not) has enormously distorted the war on terror.

I don't think that we should apply Moore's law to oil. Julian Simon pushed that kind of argument to its extreme -- since there are an infinite number of points in a line, we can never run out of resources. But Julian Simon was loony. That's utopian wishful thinking of the clinically-insane variety. Fourier believed that sea water would become drinkable eventually too.

I have put the Bandar promise to Bush into the not proven category. Something is hardly "debunked" when both parties publicly deny that it happened.

Sourcing for the Julian Simon quote:

Sourcing for Julian Simon

http://gadfly.igc.org/papers/cornuc.htm

I think it's just barely possible that Prince Bandar doesn't like Bush as much as Bush likes Prince Bandar.

How much of the pump price in e.g. Hawaii or Oregon is tax?

I'm finding it curious that Canadian prices are now very close to (some) US prices despite our reputation for piling on the taxes.

In my (atypical) neck of the woods the pump price for regular is now 95 cents Canadian per litre or US$2.61/US gal. But other parts of Canada have prices in the US$2.30 range.

Spencer, thanks for that. It suggests that the supply is only directly a function of current production rather than estimated reserves. Otherwise the time preferences ought to make a big difference.

Obviously my argument relates to long rates and yours refers to short rates so a flattening or inverting yield curve might really be srious news for or from oil prices. Some "in real terms" adjustment is also necessary -- an RPI deflator? or GDP? (I guess I am also ignoring substitution, technology assumptions, adaptive behaviour and the like but I wouldn't have thought they would provide a total counterbalance to what seem obvious effects).

If so I don't know what that says about the market's ability to deal gracefully with the eventuality of the oil supply drying up -- it looks like heads are firmly in the sand at the moment (oil shales no doubt).

Gas is currently about $5.40/US Gallon in the UK.

What does that graph look like with a proper "Y"axis ? I.e. starting at zero.

"The Saudi's can, at least in the short-run, boost their production, and more importantly, pressure OPEC to raise everyone's quota.

Done today".

Watch what they do, not what they say. Watch the production numbers. I don't believe that there is a million barrels per day of excess capacity in the entire system.

Spencer, just looking at production does not give enough information. The important factor is the difference between production and demand. Demand for oil is neither inelastic nor increasing at a constant rate.

With reagards to the price of gasoline (and the graph is only this year) we only reached refinery capacity in 2000 after briefly hitting capacity in the early 80s. CAFE standards were that effective.

Trying to let a free market act on a dwindling commodity like oil is a large scale version of a Beany Baby auction. A certain amount of planning can avoid the tragedy of the commons with our oil resources which is what we are witnessing. Gasoline prices have cycled every year since 2000. Crude prices have an influence, but not as much as one might think by looking at 4 months of data. If gasoline refineries were still over capacity, we would not be seeing this level of price increase.

The ideal energy policy would include a return to CAFE standards and a substantial fuel tax to keep fuel prices moderately high but consistent. When fuel prices vary 10% week to week, pricing other goods and services becomes difficult.

For those of you watching the stock market, anticipate that high fuel prices will take a toll on profits this quarter for companies that have a lot of transportation/shipping costs.

Some thoughts on American Automobile Fuel Consumption. http://fuelconsumption.blogspot.com/

Bakho, shouldn't anticipated future demand for oil let the market prevent the worst of the beany baby kind of effects?

I get the impression that a lot of oil production in fact planned, not for financial or long term effects but for all sorts of expedient motives, like doing favours for the US in the case of the Saudis or to ease budget problems in the case of the UK. Is there a case to be made for the irrationality being at this point, rather than the markets looting the commons?

big al: "Why so few diesel cars? Ps I unserstand they run well on home heating oil."

Diesel freezes (or at least becomes more viscuous) at low temperatures, but I guess they have figured out some additives to counter that which will be phased in during the cold period. I'm sure that's not why there are fewer diesel vehicles; there must be other historical reasons.

In Germany, engine diesel is taxed more than heating diesel, but the law mandates that the latter be colored with a virtually unremovable additive, and (mostly commercial) diesel vehicles are routinely stopped on the road every once in a while to enforce diesel tax evasion. It is said that the mobile test device they use can reliably detect the additive even at very low concentrations, so even adding a few percent of heating diesel to your tank will be found out. Gasoline is taxed significantly more than diesel, as apparently it is more expedient reaching into the pockets of private citizens and small businesses than large transportation companies, who are the vast majority of diesel users.

"shouldn't anticipated future demand for oil let the market prevent the worst of the beany baby kind of effects?"

In a way yes, but the energy infrastructure has a slow rate of turnover. The energy plants built today will still be in operation 40 years from now. That is why it is important today to know what emissions regulations, energy supplies, etc. will be 40 years from now. The energy industry uses sophistochated analyses to arrive at those predcitions. Can you predict what gasoline prices will be next week? let alone 6 months from now or 4 years from now?

You own your car now. Half the population cannot just dump the car they own and buy a new more efficient one. Today's cars cannot be upgraded for better mileage. So we are stuck today with the cars we have. If you have to get to work, then you pay the extra in fuel to get to work. IF you have goods to deliver, you have to pay the extra to deliver the goods.

Because there is a lag time required to respond to new higher energy costs then there will be a period when demand will be much higher than supply. Because the suppliers realize that demand will go down, they cannot justify building new capacity that will go underutilized. Because of the lags in demand and supply response, the pricing will not be stable except in those instances where supply exceeds demand. Once demand exceeds supply, then wild price swings should be expected. The price will rapidly rise, because the market will bear it. As conservation is adopted, the demand will fall and not recover. An industry response to demand will result in overcapacity.

Systems that have rapid responses to supply and demand can move gradually to stable pricing levels. If one adds lags in response to both supply and demand to the model, then prices will fluctuate wildly.

Here's a very long letter I've been trying to spread around the Internet, so far without any results.

To: Severin Borenstein
Subject: Price of Gasoline
Date: Wed, 24 Mar 2004 10:37:31 -0800

I listened with great interest to your appearance on Forum yesterday. It seems from the talk that any talk of a carbon tax or something similar is well and truly dead; only one person mentioned that the priceof gasoline might be too low, and he seemed to be opposed to energy consumption in principle, rather than to be interested in figuring outhow to conserve it. About a carbon or gasoline tax nothing; we seem to be unhappy to pay as much as we are paying for gasoline, but (if we have to pay more) we'd rather the money go to oil sheiks or Texas oil millionaires than to the U.S. government or California. Note Mr. Kerry madly backing away from a 50 cent per gallon tax on gas.

Here's a letter I wrote to Alan Saracevic of the Chron a couple of years ago about this, which I'm sending you unedited. He had advised his readers to sign a pledge to drive less, which provoked my reply. I can't find anything in my letter that I would change, except the price of gasoline, which will always need changing until the country doessomething practical to reduce our energy dependence.

Very Sincerely -- Jonathan Ryshpan

To: Alan Saracevic
Date: Tue, 10 Sep 2002 13:11:22 -0700
Subject: Saving Oil

I was very interested by your article in Sunday's Chron. However, though I agree with the points you make, the article would be better placed in the religion section rather than in business. You appear to appeal to virtue,instead of appealing to interest, which is what articles in the business section should be appealing to.

**Nobody**, neither you nor any of your interviewees mentioned a carbon or energy tax, which would surely bring about the results you and I desire. This is probably because it's not practical politics: nobody benefits from it, except for the common interest ofthe country, and many interests and attitudes oppose it. Conservatives don't like it, since it's a tax; oil and gas companies particularly don't like it because it taxes them; liberals don't like it because it taxes poor people disproportionately; libertarians don't like it because it attempts to tilt the market (as if so many other government policies didn't).

Not many people realize that the tax on gasoline is much smaller than it was 30 years ago, before the first gas crisis. When I was a young man in Wisconsin, I paid 27 cents a gallon for regular, of which 13 cents was tax: about 48%. Now regular sells for about $1.60a gallon, of which 36 cents is tax: about 23%.

Summer before last I took a trip to Scotland and noticed a number of things. Gas is quite expensive: about 50p a liter or about $5.00 a gallon. Everyone drives as much as they seem to want to, though the cars are a little smaller. As near as I can tell, the country is thriving.

One way to sweeten the pill, at least for the liberals. The money raised by a carbon tax should be spent to buy down the sales tax on other items. Anestimate could be made of how much money a carbon taxwould raise; and the sales tax would be lowered so as to reduce its take by that amount. Is this practical politics? Probably not.

BTW: How do you pronounce Saracevic? (Ryshpan rhymes with dishpan.)

Jonathan Ryshpan

Those who have put out the eyes of the people reproach them for their blindness. -- Milton

SW,

New technology (cheap digital seismic reprocessing and frequency-based seismic) may not save the Saudis, but it will help the rest of us find the higher-cost (but still profitable at US$30/bbl) oil in the rest of the world.

Ian

Ian, have you checked the record for new oil/gas fields? It's like WMD --lots of "activity" and hope, but dismal results. You might be right, but not too many people ( Shell as SW point out recently decided to restate their reserves...lower) are betting in your direction.
Nobody mentions the thrifty measure of reducing the speed limits as per '70s. Ah! The good old days of 55 mph. As spencer notes that was when gas was real expensive. And we had responsible government. Today we have tax structures that encourage SUV purchases and may be facing actual shortages of gasoline this summer because...well Prince said..
We are addicted not only to the damn car but to speed, no?

I CAN'T DRIVE 55
Sammy Hagar

One foot on the brake and one on the gas, hey!
Well, there's too much traffic, I can't pass, no!
So I tried my best illegal move
Well, baby, black and white come and touched my groove again!
Gonna write me up a 125
Post my face wanted dead or alive
Take my license, all that jive
I can't drive 55!

So I signed my name on number 24, hey!
Yeah the judge said, "Boy, just one more
We're gonna throw your ass in the city joint"
Looked me in the eye, said, "You get my point?"
I said Yea!, Oh yea!
Write me up a 125
Post my face wanted dead or alive
Take my license, all that jive
I can't drive 55!

Oh, yea!

I can't drive 55!
I can't drive 55!
I can't drive 55!
I can't drive 55!

When I drive that slow, you know it's hard to steer.
And I can't get get my care out of second gear.
What used to take two hours now takes all day. Huh!
It took me 16 hours to get to L.A.
Gonna write me up a 125
Post my face wanted dead or alive
Take my license, all that jive
I can't drive 55!

No, no no,
I can't drive...
(I can't drive 55!)
I can't drive...
(I can't drive 55!)
I can't drive 55!

Calmo,

Africa in general, and Mauritania to be specific,is the obvious example. The East Coast of Africa is also seeing serious work up and down the coast (Eritrea, Kenya, Tanzania, Mozambique, the list goes on).

Mexico is a sleeper - due to the incompetance of Pemex (and the fact no-one else can play there), Mexico has a bunch of oil they can't access, notably in the deepwater Gulf of Mexico (and I am saying it's there by using a secret industry technique called Nearology, because it's everywhere else in the GoM).

On the minus side, it isnt getting produced. On the plus side, it's not going anywhere in a hurry if it isnt drilled.

Wider use of fee-for-service arrangements where Pemex hires whoever to drill it may end up being the compromise. It's notable that Madrid-based Repsol YPF SA, Techint Group of Argentina and Petroleo Brasileiro SA of Brazil have already signed such deals (note none of them are Americans).

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aiCGRvgY.Gcw&refer=latin_america

Then there's Siberia and ex-Soviet Central Asia.

But, yeah, user efficiency has to be a big part of the energy squeeze.

But the thing is, it's a squeeze, not a crunch. We'll just get used to $30 a barrell, then $35, then $40 and so on.

Ian Whitchurch

Calmo,

Africa in general, and Mauritania to be specific,is the obvious example. The East Coast of Africa is also seeing serious work up and down the coast (Eritrea, Kenya, Tanzania, Mozambique, the list goes on).

Mexico is a sleeper - due to the incompetance of Pemex (and the fact no-one else can play there), Mexico has a bunch of oil they can't access, notably in the deepwater Gulf of Mexico (and I am saying it's there by using a secret industry technique called Nearology, because it's everywhere else in the GoM).

On the minus side, it isnt getting produced. On the plus side, it's not going anywhere in a hurry if it isnt drilled.

Wider use of fee-for-service arrangements where Pemex hires whoever to drill it may end up being the compromise. It's notable that Madrid-based Repsol YPF SA, Techint Group of Argentina and Petroleo Brasileiro SA of Brazil have already signed such deals (note none of them are Americans).

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aiCGRvgY.Gcw&refer=latin_america

Then there's Siberia and ex-Soviet Central Asia.

But, yeah, user efficiency has to be a big part of the energy squeeze.

But the thing is, it's a squeeze, not a crunch. We'll just get used to $30 a barrell, then $35, then $40 and so on.

Ian Whitchurch

Is there music to that bakho?
Ian, there was a thread not too long ago here that looked at crude production over the last 20 years and prognosis for the next 20. ( I can't find it at the moment.) You are claiming that this is old information --that we have found ( using top secret Nearology) [can't resist, supplanting not so-top-secret Farology] new fields ( "proven" atleast more proven than Shell's) and don't need to worry.
The (old? atleast other) report said the bulk of the research money was now being spent on getting better yields out of existing fields and developing marginal resources like Canada's Tar Sands. You bring good news and counterpoint to the likes of this:
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=25700
or this:
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=29792
Hope you are right and thanks for the bloomberg link.

Sammy Hagar is an old California rocker. I thought you old Californians would have heard of him. I can't drive 55 is available from your Itunes music store. Great road song.

BTW, Looking at mpg on American cars, the Prius seems to be the only one with better than 40 mpg. It seems that it would be very difficult for American consumers to match European gas efficiency given what is on the market.

Online Casino Directory

Ad praesens ova cras pullis sunt meliora - Eggs today are better than chickens tomorrow (a bird in the hand is worth two in the bush)

I get the impression that a lot of oil production in fact planned, not for financial or long term effects but for all sorts of expedient motives, like doing favours for the US in the case of the Saudis or to ease budget problems in the case of the UK. Is there a case to be made for the irrationality being at this point, rather than the markets looting the commons?

Mens agitat molem - The mind moves the matter. (Vergil)

In hoc signo vinces - In this sign, you will be victorious. (Eusebios)

Ex cearulo - Out of the blue

Ad hominem - Appealing to a person's physical and emotional urges, rather than her or his intellect

Finis coronat opus - The ending crowns the work. (Ovid)

Semper idem - Always the same thing. (Cicero)

Dum excusare credis, accusas - When you believe you are excusing yourself, you are accusing yourself. (St. Jerome)