Monday, November 23, 2009
Friday, November 20, 2009
Tuesday, November 17, 2009
Energy Is No Longer Cheap ... If We Are at Peak Oil, What Is Next for Energy? by Mike Farrell aspenIbiz
These are frustrating economic times. Stress and anxiety is high. We all want to know what is happening out there in our economy and the business landscape.
At times there is much conversation around about Peak Oil and high energy prices; and this has been discussed during a recent CNBC series Inside the Oil Trade.
In this blog post I am going to briefly introduce the Peak Oil concept as part of drilling down (no pun intended) on the Energy theme of the 5 Es evaluation framework. And, if we are at Peak Oil what happens next for Energy?
Straight from my previous article, "1 – Energy is no longer cheap. We have reached the point of peak oil … meaning easy stuff to find and drill has occurred. While more oil is being found, it will be very expensive to drill, pump, and distribute to customers so more and more of our budget will be used to pay for energy hence interest in alternative energy sources."
Peak Oil is the stuff easy to find, drill, pump, and transport to customers. With the easy stuff, we have seen oil prices in recent years range from mid teens to approx $150/barrel in 2008.
When we transition to the stuff harder to find, drill, pump, and transport to customers, just image where the prices will go … for sure much hirer than the $50-$60-$70 avg price per barrel over the past few years and the price of gas could increase from an average of $2.50 per gal to way past the $4.50 per gal we experienced in 2008.
If it is twice as hard to get the newer stuff and everything else stays equal, we could see prices at the pump of $7 - $8 - $9 per gallon.
And, many say it was last year’s $4.50 per gal ($150/barrel) that pushed the economy over the cliff and ignited the Great Recession we are now experiencing.
What happens to our economy and way of life when costs at the pump increase to the $7 - $8 - $9 per gal area? It could get ugly.
However, consistent with my theme of increasing our financial literacy to understand and pursue alternative investment strategies, in this article I will build upon the Energy theme of the 5 E-valuation framework I introduced in a previous article.
Work is underway at existing oil fields (in Saudi Arabia, Mexico, the North Sea, and Nigeria) to coax more oil out of these fields. Progress is good however every little bit of more effort to get oil out of these fields adds a little bit to the cost of the barrel of oil.
Here is a brief status as to the efforts underway to find more oil in 3 locations.
1) Brazil – recently announced oil find, the Tupi field, off the east coast of Brazil far out (up to 200 miles) in the Atlantic Ocean provides reserves (estimated to be about 10 billion barrels) about equal to Saudi Arabia. Will require wells in waters up to two mile deep and four – five miles of rock seabed floor. Estimates are that $175B will be needed to build and buy dozens of new drill ships and seagoing platforms, along with many dozens of support and servicing vessels. Will need to lay thousands of miles of pipelines on the seafloor, connecting massive complexes of subsea equipment that will sit atop hundreds of oil wells. Most likely a five year offshore development effort. The Chinese have arrived to finance much of this effort, in return, of course, for oil.
2) Tiber site in the gulf of Mexico was announced in early September and is a totally new find and different from the older, more mature fields of Pemex in Cantarell, Mexico. It is expected to produce over 1 B barrels of oil but it will take many years and a lot of dollars of investment (think alternative wealth creating strategies) … plus the wells are likely to be in water with wells at a world record depth of 35,000 feet. Next steps – approx two years to confirm and validate scope of potential; design and build an offshore platform at approx $1B; drill wells at $50M a pop; and approx $0.5B offshore floating production storage and offloading to tankers, facility. Sources of financing have not yet been announced.
3) Namibia – keep going east in the Atlantic from the find offshore of Brazil mentioned above and you will land on the shores of Namibia, a country on the Southwest Coast of Africa (just west of Botswana and just north of the country of South Africa) with a functioning democracy. This find is in its very early stages and the scope of the find, nor development investment, has been calculated. However scientist, geologists, and petroleum engineers working the area, are calling it a geologic analog to Brazils and expect investment and output to be at least equivalent. Obviously, much more work to be done here in Namibia.
In previous articles I wrote that example of alternative wealth creating strategies included energy assets that are inherently useful like oil rigs … things hard to build, difficult to replace, and costly to substitute … definitely not financial stocks, definitely not retail stocks, definitely not commercial property.
I trust this post and associated articles provide a little more insight as to why investments in energy players, producers, and engineering services represent alternative wealth creating strategies.
The entire article can be found here .
The entire article that describes the 5Es Framework can be found here .
I favor a recent quote from Steve Forbes. Forbes says “obtaining more financial education, and the resulting literacy and empowerment, will open our eyes to alternative wealth creating strategies, and these are the keys to recovery from this ongoing financial crisis.”
As a former engineer with General Dynamics and management consultant at Deloitte … I am on a mission to empower individuals by increasing their financial literacy, improve their ability for personal sustainability, and contribute to the program that has a goal of creating 100 Millionaires by 2012.
Until the next time, I invite you to learn more about me and my various activities by me checking me out at the links below.
Meet me at Facebook :
Follow me on my blog :
Watch me on YouTube : and
Join my venture at aspenIbiz as I pursue alternative wealth creating strategies and generate multiple income streams.
When not traveling for business or pleasure, Mike operates his own internet marketing company and consulting firm from his home in the mountains of Colorado.
Finally, if you are an entrepreneur, a business owner, employed in an 8-5 job, or recently retired, yet still wanting to be plugged-in to the next wave of economic prosperity, you can join me in pursuing the lifestyle you want to live (follow "join my venture" link above) in pursuing opportunities in the Internet Marketing industry.
You can watch my video update of this article here , and here2, and here3 . This update has a 3 part video series.
At times there is much conversation around about Peak Oil and high energy prices; and this has been discussed during a recent CNBC series Inside the Oil Trade.
In this blog post I am going to briefly introduce the Peak Oil concept as part of drilling down (no pun intended) on the Energy theme of the 5 Es evaluation framework. And, if we are at Peak Oil what happens next for Energy?
Straight from my previous article, "1 – Energy is no longer cheap. We have reached the point of peak oil … meaning easy stuff to find and drill has occurred. While more oil is being found, it will be very expensive to drill, pump, and distribute to customers so more and more of our budget will be used to pay for energy hence interest in alternative energy sources."
Peak Oil is the stuff easy to find, drill, pump, and transport to customers. With the easy stuff, we have seen oil prices in recent years range from mid teens to approx $150/barrel in 2008.
When we transition to the stuff harder to find, drill, pump, and transport to customers, just image where the prices will go … for sure much hirer than the $50-$60-$70 avg price per barrel over the past few years and the price of gas could increase from an average of $2.50 per gal to way past the $4.50 per gal we experienced in 2008.
If it is twice as hard to get the newer stuff and everything else stays equal, we could see prices at the pump of $7 - $8 - $9 per gallon.
And, many say it was last year’s $4.50 per gal ($150/barrel) that pushed the economy over the cliff and ignited the Great Recession we are now experiencing.
What happens to our economy and way of life when costs at the pump increase to the $7 - $8 - $9 per gal area? It could get ugly.
However, consistent with my theme of increasing our financial literacy to understand and pursue alternative investment strategies, in this article I will build upon the Energy theme of the 5 E-valuation framework I introduced in a previous article.
Work is underway at existing oil fields (in Saudi Arabia, Mexico, the North Sea, and Nigeria) to coax more oil out of these fields. Progress is good however every little bit of more effort to get oil out of these fields adds a little bit to the cost of the barrel of oil.
Here is a brief status as to the efforts underway to find more oil in 3 locations.
1) Brazil – recently announced oil find, the Tupi field, off the east coast of Brazil far out (up to 200 miles) in the Atlantic Ocean provides reserves (estimated to be about 10 billion barrels) about equal to Saudi Arabia. Will require wells in waters up to two mile deep and four – five miles of rock seabed floor. Estimates are that $175B will be needed to build and buy dozens of new drill ships and seagoing platforms, along with many dozens of support and servicing vessels. Will need to lay thousands of miles of pipelines on the seafloor, connecting massive complexes of subsea equipment that will sit atop hundreds of oil wells. Most likely a five year offshore development effort. The Chinese have arrived to finance much of this effort, in return, of course, for oil.
2) Tiber site in the gulf of Mexico was announced in early September and is a totally new find and different from the older, more mature fields of Pemex in Cantarell, Mexico. It is expected to produce over 1 B barrels of oil but it will take many years and a lot of dollars of investment (think alternative wealth creating strategies) … plus the wells are likely to be in water with wells at a world record depth of 35,000 feet. Next steps – approx two years to confirm and validate scope of potential; design and build an offshore platform at approx $1B; drill wells at $50M a pop; and approx $0.5B offshore floating production storage and offloading to tankers, facility. Sources of financing have not yet been announced.
3) Namibia – keep going east in the Atlantic from the find offshore of Brazil mentioned above and you will land on the shores of Namibia, a country on the Southwest Coast of Africa (just west of Botswana and just north of the country of South Africa) with a functioning democracy. This find is in its very early stages and the scope of the find, nor development investment, has been calculated. However scientist, geologists, and petroleum engineers working the area, are calling it a geologic analog to Brazils and expect investment and output to be at least equivalent. Obviously, much more work to be done here in Namibia.
In previous articles I wrote that example of alternative wealth creating strategies included energy assets that are inherently useful like oil rigs … things hard to build, difficult to replace, and costly to substitute … definitely not financial stocks, definitely not retail stocks, definitely not commercial property.
I trust this post and associated articles provide a little more insight as to why investments in energy players, producers, and engineering services represent alternative wealth creating strategies.
The entire article can be found here .
The entire article that describes the 5Es Framework can be found here .
I favor a recent quote from Steve Forbes. Forbes says “obtaining more financial education, and the resulting literacy and empowerment, will open our eyes to alternative wealth creating strategies, and these are the keys to recovery from this ongoing financial crisis.”
As a former engineer with General Dynamics and management consultant at Deloitte … I am on a mission to empower individuals by increasing their financial literacy, improve their ability for personal sustainability, and contribute to the program that has a goal of creating 100 Millionaires by 2012.
Until the next time, I invite you to learn more about me and my various activities by me checking me out at the links below.
Meet me at Facebook :
Follow me on my blog :
Watch me on YouTube : and
Join my venture at aspenIbiz as I pursue alternative wealth creating strategies and generate multiple income streams.
When not traveling for business or pleasure, Mike operates his own internet marketing company and consulting firm from his home in the mountains of Colorado.
Finally, if you are an entrepreneur, a business owner, employed in an 8-5 job, or recently retired, yet still wanting to be plugged-in to the next wave of economic prosperity, you can join me in pursuing the lifestyle you want to live (follow "join my venture" link above) in pursuing opportunities in the Internet Marketing industry.
You can watch my video update of this article here , and here2, and here3 . This update has a 3 part video series.
Sunday, November 15, 2009
Wednesday, November 11, 2009
Control These Rare Earths and You Control the Energy Technology and Economy of the 21st Century
Rare Earths are several elements on the periodic table that find their way into the alternative energy industry, our aerospace and defense industry, and our modern high-tech lifestyle … without them, none of these industries or lifestyles will continue.
There is a demand-supply imbalance that is creating alternative wealth generating opportunities and this imbalance is being played out between Denver, Western Australia, and the Middle Kingdom.
There is one deposit that is a source of these rare earths in the USA but there are no processing facilities in the USA.
There is a recent find at Mt Weld in Western Australia and this is believed to be the largest rare earth deposit ever discovered on the planet.
The Middle Kingdom produces 95% of the world’s supply of rare earths, has 15,000 scientists and engineers dedicated to work in the world’s most modern rare earth facilities, and has a national goal to achieve “economic superiority” by leveraging these rare earths.
China also recently attempted to purchase both the deposit in the USA and the new deposit in Western Australia.
These practices and investments are putting the Middle Kingdom in the driver’s seat for the energy technology and economy of the 21st century.
The entire article can be found here .
I favor a recent quote from Steve Forbes. Forbes says “obtaining more financial education, and the resulting literacy and empowerment, will open our eyes to alternative wealth creating opportunities, and these are the keys to recovery from this ongoing financial crisis.”
As a former engineer with General Dynamics and management consultant at Deloitte … I am on a mission to empower individuals by increasing their financial literacy, improve their ability for personal sustainability, and contribute to the program that has a goal of creating 100 Millionaires by 2012.
Until the next time, I invite you to learn more about me and my various activities by me checking me out at the links below.
Meet me at Facebook :
Follow me on my blog :
Watch me on my YouTube channel : and
Join my venture at aspenIbiz as I pursue alternative wealth creating strategies and generate multiple income streams.
When not traveling for business or pleasure, Mike operates his own internet marketing company and consulting firm from his home in the mountains of Colorado.
Finally, if you are an entrepreneur, a business owner, employed in an 8-5 job, or recently retired, yet still wanting to be plugged-in to the next wave of economic prosperity, you can join me in pursuing the lifestyle you want to live (follow "join my venture" link above) in pursuing opportunities in the Internet Marketing industry.
You can watch my video update of this article here .
There is a demand-supply imbalance that is creating alternative wealth generating opportunities and this imbalance is being played out between Denver, Western Australia, and the Middle Kingdom.
There is one deposit that is a source of these rare earths in the USA but there are no processing facilities in the USA.
There is a recent find at Mt Weld in Western Australia and this is believed to be the largest rare earth deposit ever discovered on the planet.
The Middle Kingdom produces 95% of the world’s supply of rare earths, has 15,000 scientists and engineers dedicated to work in the world’s most modern rare earth facilities, and has a national goal to achieve “economic superiority” by leveraging these rare earths.
China also recently attempted to purchase both the deposit in the USA and the new deposit in Western Australia.
These practices and investments are putting the Middle Kingdom in the driver’s seat for the energy technology and economy of the 21st century.
The entire article can be found here .
I favor a recent quote from Steve Forbes. Forbes says “obtaining more financial education, and the resulting literacy and empowerment, will open our eyes to alternative wealth creating opportunities, and these are the keys to recovery from this ongoing financial crisis.”
As a former engineer with General Dynamics and management consultant at Deloitte … I am on a mission to empower individuals by increasing their financial literacy, improve their ability for personal sustainability, and contribute to the program that has a goal of creating 100 Millionaires by 2012.
Until the next time, I invite you to learn more about me and my various activities by me checking me out at the links below.
Meet me at Facebook :
Follow me on my blog :
Watch me on my YouTube channel : and
Join my venture at aspenIbiz as I pursue alternative wealth creating strategies and generate multiple income streams.
When not traveling for business or pleasure, Mike operates his own internet marketing company and consulting firm from his home in the mountains of Colorado.
Finally, if you are an entrepreneur, a business owner, employed in an 8-5 job, or recently retired, yet still wanting to be plugged-in to the next wave of economic prosperity, you can join me in pursuing the lifestyle you want to live (follow "join my venture" link above) in pursuing opportunities in the Internet Marketing industry.
You can watch my video update of this article here .
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