U S Dependance Oil Arab Oil Diminishes As Canada Comes Online

[Realistbear]

http://story.irishsun.com/p.x/ct/9/id/7fcd...8a80d6f705f8cc/

Canada has become the biggest exporter of oil to the United States with the re-opening of a pipeline from Alberta to Oklahoma.

Crude oil from Alberta's tar sands began flowing this week from the Calgary, Alberta-based Enbridge Corp.'s facility through a 650-mile stretch of steel from Chicago to Cushing, Okla.

For years the pipe, which used to be owned by BP, carried Gulf of Mexico crude to northern markets, but as the Gulf supply dwindles, the crude is flowing in a different direction, the Houston Chronicle reported Saturday.

The line has an initial capacity to transport 125,000 barrels of oil a day, but can be expanded easily, the report said.

Exxon Mobil is also working on a pipeline reversal that would bring Canadian crude down to Gulf Coast refiners instead of flowing Gulf oil north to Midwestern markets.

Canada outranks Mexico, Venezuela and Saudi Arabia as oil exporters, and will likely double its oil production in the next decade, thanks to production from the oil sands.

Canada has the 2nd highest reserves in the world and much of it is controlled by US companies. The US also has massive reserves in Alaska which are so far protected by environmentalists. All of this bodes well the for US $ IMHO. Leaves less room for Brown to feed the debt mountain by lowering the rates to keep his "miracle economy" afloat until he gets to number 10 (he thinks).

[Karen]

I all ready believed Canada was the largest exporter to the US.

Goes to show what I know.

[Realistbear]

We could see some interesting economic shifts over the next few years as oil wealth switches up north. I recently switched some investments into Canada and so far they are outperforming the US and Europe. Arab domination of oil is fast eroding with Russia being the largest holder of reserves, I believe. Europe and the UK will become totally dependent on imports which does not bode well for the economy. Recession in the UK is on the cards and with it goes HPI. At last!

[clv101]

I all ready believed Canada was the largest exporter to the US.

Goes to show what I know.

It is and has been for years... this article is a triviality.

[tonification]

The £ has been a petro-currency for the last 25 years from the North Sea.

These tax revenues have been crutches on which Britain pulled herself up after the 1970s. It will be interesting to see how we survive without it.

The dwindling of this resource will seriously affect our trade deficit and the value of the GBP.

[Realistbear]

The £ has been a petro-currency for the last 25 years from the North Sea.

These tax revenues have been crutches on which Britain pulled herself up after the 1970s. It will be interesting to see how we survive without it.

The dwindling of this resource will seriously affect our trade deficit and the value of the GBP.

Oil is the Achilles heel. Without it we only have high house prices to keep the economy afloat. It amazes me that sterling is holding up above historical norms of the past decade. Perhaps the Forex boys believe the VI spin that house prices never go down?

[Pluto]

Oil is the Achilles heel. Without it we only have high house prices to keep the economy afloat. It amazes me that sterling is holding up above historical norms of the past decade. Perhaps the Forex boys believe the VI spin that house prices never go down?

Sterling has held because the USD is so weak in relation to it. I think the city knows of interest hikes are on the way, and sterling is factoring that in right now.

Those wishing for lower interest rates are dreamers. There is no way interest rates are going down, and my prediction is for interest rates to hit 10% before this cycle is over. Yes, that's 10%. Inflation is getting worse, much worse. Forget what the government spin is; look what is happening at grass roots level.

Yesterday DANA Tier one auto, filed for chapter 11 bankruptcy in the USA. In their filings that said skyrocketing material costs were one of the factors and the inability to pass them on their customers.

Dana are not alone. Every manufacturer in the UK and USA is complaining about rising utilities and raw materials.

Bottom line..these costs will filter down to the consumer very soon, and inflation will hit 3-4-5+ %.

Edited March 4, 2006 by Pluto

[Realistbear]

Sterling has held because the USD is so weak in relation to it. I think the city knows of interest hikes are on the way, and sterling is factoring that in right now.

Those wishing for lower interest rates are dreamers. There is no way interest rates are going down, and my prediction is for interest rates to hit 10% before this cycle is over. Yes, that's 10%. Inflation is getting worse, much worse. Forget what the government spin is; look what is happening at grass roots level.

Yesterday DANA Tier one auto, filed for chapter 11 bankruptcy in the USA. In their filings that said skyrocketing material costs were one of the factors and the inability to pass them on their customers.

Dana are not alone. Every manufacturer in the UK and USA is complaining about rising utilities and raw materials.

Bottom line..these costs will filter down to the consumer very soon, and inflation will hit 3-4-5+ %.

The IR cycle certainly looks that way. When you consider that US rates have risen more than 400% over the past couple of years without dampening HPI until very recently there is a lot of headroom left as Bernanke will be as willing to sacrifice the bubbles on the Coasts as Al was for the well being of the nation as a whole. In any event, I doubt the Fed cares what happens to house prices in the short terms as crashes tend to find their level within 2 to 3 years and everything is back to normal again. What is interesting is that US dependence on Arab oil is diminishing very rapidly with friendly neighbours to the North and South (Mexico, Venzuala) more than willing to fill any vacuum. We also havbe to factor in the US's own oil reserves in Alaska and California whjere environmentalists still hold sway (because the US has not felt a need to start tapping those sources yet).

I think you are right about IR ghoing much higher than present levels. The Fed will probably go to 5.5% by year end and there is no way Gordon can maintain 4.5% and keep sterling afloat. It will be intertesting to follow the ECB's moves as they are in a difficult position with so much imbalance in the EU. Ireland has hyperinflation and Italy is tanking making a uniform IR hard to apply. What a mess!

[Pluto]

The IR cycle certainly looks that way. When you consider that US rates have risen more than 400% over the past couple of years without dampening HPI until very recently there is a lot of headroom left as Bernanke will be as willing to sacrifice the bubbles on the Coasts as Al was for the well being of the nation as a whole. In any event, I doubt the Fed cares what happens to house prices in the short terms as crashes tend to find their level within 2 to 3 years and everything is back to normal again. What is interesting is that US dependence on Arab oil is diminishing very rapidly with friendly neighbours to the North and South (Mexico, Venzuala) more than willing to fill any vacuum. We also havbe to factor in the US's own oil reserves in Alaska and California whjere environmentalists still hold sway (because the US has not felt a need to start tapping those sources yet).

I think you are right about IR ghoing much higher than present levels. The Fed will probably go to 5.5% by year end and there is no way Gordon can maintain 4.5% and keep sterling afloat. It will be intertesting to follow the ECB's moves as they are in a difficult position with so much imbalance in the EU. Ireland has hyperinflation and Italy is tanking making a uniform IR hard to apply. What a mess!

I'm not sure Venezuala is friendly to the US, and the Mexican people want to stop their government from exporting oil as it's a resource they want to keep for themselves. The Federal Reserve in the USA does not care about house prices as HPI is very regional in USA. Most of the Midwest don't even know prices of housing has gone up! Many areas of the rustbelt have actually seen reductions. It's mainly to eastern and western seaboards and Florida with HPI like the UK, and of course Vegas (but nothing makes sense there anyway).

No, Gordon's miracle is soon to become everyone's nightmare. The HPI in the UK is not regional - it's everywhere. Everyone is going to feel 10% interest rates like a sledgehammer on the head. There's no escaping.

Like I said earlier look at grass roots level.

Employment

Material Costs

Retail Sales

Utilities

It's nothing short of a disaster.

Oh and by the way. When interests rates hit 10+% no one here is going to want to buy a house. Even when they're 50% cheaper.

Edited March 4, 2006 by Pluto

[Realistbear]

I'm not sure Venezuala is friendly to the US, and the Mexican people want to stop their government from exporting oil as it's a resource they want to keep for themselves. The Federal Reserve in the USA does not care about house prices as HPI is very regional in USA. Most of the Midwest don't even know prices of housing has gone up! Many areas of the rustbelt have actually seen reductions. It's mainly to eastern and western seaboards and Florida with HPI like the UK, and of course Vegas (but nothing makes sense there anyway).

No, Gordon's miracle is soon to become everyone's nightmare. The HPI in the UK is not regional - it's everywhere. Everyone is going to feel 10% interest rates like a sledgehammer on the head. There's no escaping.

Like I said earlier look at grass roots level.

Employment

Material Costs

Retail Sales

Utilities

It's nothing short of a disaster.

Oh and by the way. When interests rates hit 10+% no one here is going to want to buy a house. Even when they're 50% cheaper.

I think you are right. We are STRs through a job move from the US back to the UK and probably have enough to buy a house without a mortgage so IR won't matter too much. Nevertheless, I am somewhat of a campaigner for social justice and have a great deal of sympathy for the FTBs who are suffering under Gordon's "Miracle Economy." My overall impression of Gordon's run as Chancellor is that it has been an unmitigated disaster for the nation. Yes, people have "more" but they have paid a terrible price for it in the form of debt and a burned out economy. It may be "NuLabour" to some but I see the same old something for nothing policies that have always marked Labour. A lot of people disliked Maggie because she was perceived as being harsh and uncaring but at least she knew value for money and would never have conned the people into believing riches come from debt like Gordon has succeeded in doing.

I hope David "Scotty" Cameron has what it takes to turn this country around because the last thing we need is more "Miracles" coming from Downing Street.

[clv101]

The £ has been a petro-currency for the last 25 years from the North Sea.

These tax revenues have been crutches on which Britain pulled herself up after the 1970s. It will be interesting to see how we survive without it.

The dwindling of this resource will seriously affect our trade deficit and the value of the GBP.

A rough estimation of costs reveals that importing 100 billion cubic metres of gas at 2pence/kWh would cost £22bn at today’s prices and importing 680 million barrels of oil at $60 per barrel and $1.75=£1 would cost £23bn at today’s prices.

Replacing North Sea extraction with imports would add £45bn to trade deficit and all that does is maintain transport and the existing gas use. Tax receipts from North Sea operations would also fall. Further expenditure will be needed if nuclear and coal are also to be replaced.

Trade deficit in 2005 was: £47.6bn.

[Realistbear]

A rough estimation of costs reveals that importing 100 billion cubic metres of gas at 2pence/kWh would cost £22bn at today’s prices and importing 680 million barrels of oil at $60 per barrel and $1.75=£1 would cost £23bn at today’s prices.

Replacing North Sea extraction with imports would add £45bn to trade deficit and all that does is maintain transport and the existing gas use. Tax receipts from North Sea operations would also fall. Further expenditure will be needed if nuclear and coal are also to be replaced.

Trade deficit in 2005 was: £47.6bn.

At least we do have massive coal reserves and technology has finally solved the emissions problems. Oil from coal is also now viable. I took up a minority shareholding position ( ) in UK Coal recently as this seems to be a potential growth area as NS Oil and Gas dries up. The UK may have to get used to a lower standard of living in the years ahead which does not bode well for the world's most expensive house prices (in relation to earnings). My sister is buying a house in France and properties there are about 1/4th of what we pay.

Edited March 4, 2006 by Realistbear

[Pluto]

I think you are right. We are STRs through a job move from the US back to the UK and probably have enough to buy a house without a mortgage so IR won't matter too much. Nevertheless, I am somewhat of a campaigner for social justice and have a great deal of sympathy for the FTBs who are suffering under Gordon's "Miracle Economy." My overall impression of Gordon's run as Chancellor is that it has been an unmitigated disaster for the nation. Yes, people have "more" but they have paid a terrible price for it in the form of debt and a burned out economy. It may be "NuLabour" to some but I see the same old something for nothing policies that have always marked Labour. A lot of people disliked Maggie because she was perceived as being harsh and uncaring but at least she knew value for money and would never have conned the people into believing riches come from debt like Gordon has succeeded in doing.

I hope David "Scotty" Cameron has what it takes to turn this country around because the last thing we need is more "Miracles" coming from Downing Street.

The miracle was for the BoE to turn up the printing presses to warp speed. Simple really, flood the streets with cash make every one feel better off. Price of commodoties including housing rockets. People with these commodoties feel richer and spend more money that does not exist. The merry go round goes faster and faster, until...some folk want to cash out and get off the wheel.

That's where we are right now.

Trade deficit in 2005 was: £47.6bn.

That's disgusting for a country the size of GB.

[Guest horace]

At least we do have massive coal reserves

We had considerably more reserves before Thatcher. Thanks to her we have very little now.

horace

[Realistbear]

We had considerably more reserves before Thatcher. Thanks to her we have very little now.

horace

They are still there--apparently "300 years" worth. A lot of investment headed that way now that coal is viable in the light of $60bbl oil prices. Before the oil hikes coal was a loser and Art Scargill very nearly destroyed the country.

http://www.housepricecrash.co.uk/forum/ind...showtopic=23040

Edited March 4, 2006 by Realistbear

[Guest horace]

They are still there--apparently "300 years" worth. A lot of investment headed that way now that coal is viable in the light of $60bbl oil prices. Before the oil hikes coal was a loser and Art Scargill very nearly destroyed the country.

If that is what you want to believe but besides the lost coal reserves Mrs T destroyed the fabric of many communities.

horace

[FTBagain]

A word of caution on the Canadian Oil Sands. The oil is like tar, apparently, and for every three barrels you dig out you only get one barrel of useful product.

It may be possible that this will improve with time, but such is the demand for oil, we may simply use it all up before the new technologies are developed.

[Realistbear]

A word of caution on the Canadian Oil Sands. The oil is like tar, apparently, and for every three barrels you dig out you only get one barrel of useful product.

It may be possible that this will improve with time, but such is the demand for oil, we may simply use it all up before the new technologies are developed.

The US and the UK have a penchant for "gas guzzling" SUVs so we could start saving oil by taxing these anachronistic behemoths off the road (unless you actually need one for your farm!).

Edited March 4, 2006 by Realistbear

[The Masked Tulip]

Is not the Queen one of the largest land-owners in Canada?

[FTBagain]

The US and the UK have a penchant for "gas guzzling" SUVs so we could start saving oil by taxing these anachronistic behemoths off the road (unless you actually one for your farm!).

Yup! Agree. I also find quite intimidating when i am out about town in my wheelchair. If I cross the road (usually at lights) I know the numpty behind the wheel cannot see me. Of course, the said numpty could be driving on the pavement as I often see them do. Hate them!

[malco]

http://story.irishsun.com/p.x/ct/9/id/7fcd...8a80d6f705f8cc/

Canada has become the biggest exporter of oil to the United States with the re-opening of a pipeline from Alberta to Oklahoma.

Crude oil from Alberta's tar sands began flowing this week from the Calgary, Alberta-based Enbridge Corp.'s facility through a 650-mile stretch of steel from Chicago to Cushing, Okla.

For years the pipe, which used to be owned by BP, carried Gulf of Mexico crude to northern markets, but as the Gulf supply dwindles, the crude is flowing in a different direction, the Houston Chronicle reported Saturday.

The line has an initial capacity to transport 125,000 barrels of oil a day, but can be expanded easily, the report said.

Exxon Mobil is also working on a pipeline reversal that would bring Canadian crude down to Gulf Coast refiners instead of flowing Gulf oil north to Midwestern markets.

Canada outranks Mexico, Venezuela and Saudi Arabia as oil exporters, and will likely double its oil production in the next decade, thanks to production from the oil sands.

Canada has the 2nd highest reserves in the world and much of it is controlled by US companies. The US also has massive reserves in Alaska which are so far protected by environmentalists. All of this bodes well the for US $ IMHO. Leaves less room for Brown to feed the debt mountain by lowering the rates to keep his "miracle economy" afloat until he gets to number 10 (he thinks).

There is a little factual challenge in this article. 125,000 barrels per day is only about 0.5% of US oil consumption. They can increase the flow ten-fold and it's still trivia. Canada's tar sands are difficult to exploit because you need a lot of heat to extract the stuff and make it useful. With steady investment - including nuclear plant to provide the heat - it may be possible to produce 2-3mb/d oil ten years from now. That's enough for Canada, it's nothing for the US. Canada is not in the top ten of the world's oil exporters, by the way, I have no idea why the article suggests otherwise.

The Alaska oil field yet to be exploited would produce at most 2mb/d oil in ten years' time if they started now. Again, that's nothing when set against decline in domestic US fields, and known declines in Mexican oil production. The US has no way out but dramatic cuts in consumption. But given how wasteful they are, they could probably halve oil consumption without real pain. The US currently imports a staggering 12million barrels of oil per day. That is a seventh of all oil production, or nearly the exports of Saudi and Russia put together.

The largest exporter in the world is Saudi, by a huge margin, after which comes Russia, then Norway, then Iran. None of these countries has been able to increase production much in the last couple of years and of course, all of them have increasing domestic demand, which reduces that available for export. This point is most pertinent for Saudi, with it's rapid population growth of disgruntled folk, who will need to be duly fed cheap cars and cheap petrol just like everywhere else to keep them pacified.

But I see Britain as facing a very grim future. US oil production has decline only very slowly, but North Sea oil and gas production has already fallen by half since peaking about five years ago. How are we going to pay for our energy when we can only just hold our own as it is? Answer.... drop the pound. I can honestly see us all driving around in Bubble cars in ten years' time, just like back in the 1950s.

[Smurf1976]

Bottom line with coal is most of it is still in the ground just as it was 20 years ago. Shutting the mines has made it a very expensive proposition to get it out of the ground, but it's not undoable as long as the price is high enough. Was still an absolutely stupid idea to shift to gas for power generation in the first place though.

[Guest Bart of Darkness]

I can honestly see us all driving around in Bubble cars in ten years' time, just like back in the 1950s.

Or Sinclair C5s might make a comeback.

Or electric/solar powered rickshaws.

[The Masked Tulip]

Bottom line with coal is most of it is still in the ground just as it was 20 years ago. Shutting the mines has made it a very expensive proposition to get it out of the ground, but it's not undoable as long as the price is high enough. Was still an absolutely stupid idea to shift to gas for power generation in the first place though.

Those bloody Polish miners flocking over here...

I think the mentality of "My father was a miner, his father was a miner, I am a miner and I want my son to be a miner!" has almost disappeared in Wales - Thatcher saw to that!

I doubt that thousands of young Welshmen will wish to give up their air-conditioned 'do nothing' Public Sector jobs in Wales - nearly 7 in 10 Welsh people are employed by the Public Sector - to go back down the pits.

Having said that, the rugby teams would improve dramatically if they open up the outside-half factory again!

[clv101]

But I see Britain as facing a very grim future. US oil production has decline only very slowly, but North Sea oil and gas production has already fallen by half since peaking about five years ago. How are we going to pay for our energy when we can only just hold our own as it is? Answer.... drop the pound. I can honestly see us all driving around in Bubble cars in ten years' time, just like back in the 1950s.

Here's a graph of UK primary energy, oil, coal, gas, nuclear, everything. We used to be a net energy exporter, not anymore:

See article here: UK Energy Gap