Finance Stock Trading Invest Review 11/26/07
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Energy And Oil Stock Market Industry Analysis (24)
In discussing energy, I wish to bring out the following basic facts that we are experiencing now regarding the future of oil and other alternatives:
A Saudi Oil Minister once told the OPEC members, The stone age ended not because we ran out of stones.
An oil expert once said thoughtfully, The solution to high oil prices is, ironically, high oil prices.
Many experts point out that the Middle East countries are burdened by the oil curse. The rest of the world is no different. Our curse is one of addictive consumption while theirs is single-industry production. Their economies cater to our addiction. We are willing to pay, even with blood.
The dramatic rise in oil prices in recent years is mainly due to long-range demands from China and other populous emerging countries like India and Brazil. It has effectively wiped out the global oil surplus stock. That means the world is now living from day to day on just enough oil production. Any event such as a hurricane, earthquake, terrorism or maintenance shut down will push up oil prices worldwide. The big drop in oil prices since September 08 is only a short-term phenomenon due to fear of a global recession. Once this fear disappears, oil prices will climb back up again.
You can find oil all around, even under your home or your future cemetery. The problem is oil extraction and refining can only operate efficiently on a big scale located near a very large oil deposit. There exist only a handful of such deposits around the world, mostly in the Middle East. Even the North Sea is running out in the near future. So additional oil production will not be enough to ease rising prices. Only nobrainers clamor for drill baby drill!
The oil producers know about this. Have you noticed that they dont call themselves oil companies anymore? They are positioning themselves as energy companies. Even some Middle East oil countries are investing in American solar firms.
Do we have a choice regarding oil? I am afraid not, except for alternatives. Besides rising demand that cannot be met, years of burning fossil fuels have produced global warming with dire consequences. We are now being forced to move away to solar, wind, nuclear and other energy sources. The green movement is quietly taking shape. If the US does not want to assume leadership in this movement, some other countries will. Japan has taken the lead in producing hybrid cars. Germany has made great progress in solar and wind. Frances fast trains run on electricity most of which is generated by nuclear reactors. China is producing millions of electric plug-in bicycles and cheap solar panels for household roofs. Look at General Motors, Ford and Chrysler. They have failed to produce more fuel-efficient cars and have to beg the US Congress for billions of dollars of bailout.
What about bio-fuels? Ethanol is commercially ready as shown in Brazil. The important question is what is it derived from. Ethanol in Brazil is derived from sugar canes after the sugar has been extracted. It is therefore a by-product with no impact on sugar production. In America where corn production is a major industry supplying the world, part of it is diverted to ethanol production as encouraged by government subsidies. In this case, people are forced to choose between food and fuel. What a dumb idea!
Nuclear energy requires high overhead and maintenance, besides the risky disposal of waste products. There is also the safety concern expressed by local residents. Nuclear energy is only viable with strict management.
Coal is the most dirty energy source although there are huge deposits in China and America. A good prospect exists for clean coal technology. The important question is: Will the new technology consume more dirty fuels than the clean coal it is supposed to produce? What will be the net result?
Solar energy stands out as the best source for producing electricity. Every residential or commercial building can be turned into a self-sufficient electricity producer if it has a roof or enough sun exposure. This will eliminate the need for central electricity generation and transmission to end-users. When the plug-in electric cars are available, they can tap into the same solar source. That means solar energy will be indirectly produced for use in transport besides heating, lighting and other functions in buildings. The capture of solar energy depends on the development of cheaper and efficient solar cells and storage batteries. Investments in this area are quietly flowing in. Commercialization is already happening. It may take a few more years before we see a sudden explosion of solar technology.
For further information, please email to stockfessor@comcast.net
i’m liu, 22 years old this year and i just a normal guy with some martial arts skills
I wanted to give an example of using the ADX on short term charts to help understand entry into a play. MBI was a video from yesterday morning that I thought I would use an an example to elaborate on as an example.
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