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San Juan Basin Royalty Trust Message Board

  • birdluck1 birdluck1 Jan 13, 2006 4:28 PM Flag

    COS move (OT)

    For those COS watchers who noticed the big move up by COS today, a possible explanation is the following news:

    Jan. 13 (Bloomberg) -- Japan, which imports about 90 percent of its oil from the Middle East, will study the feasibility of importing oil sands, or heavy oil, from Canada to diversify its sources of energy supplies, a minister said.

    Officials from Japan's trade ministry, refineries and trading companies will begin a visit to Canada tomorrow, Trade Minister Toshihiro Nikai told reporters in Tokyo today.

    Japan, the world's third-biggest oil user, wants to reduce its dependence on a single region for its energy supplies after growing demand from China and India pushed oil prices to record last year.

    Importing oil sands ``can contribute to raising Japan's energy security,'' Nikai said. ``Japan hasn't imported the fuel, but we will strongly promote it.''

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    • I am realtively new to the energy sector but one of the things that always struck me about energy charts is how many show a sudden change in pattern as they go from actual to projected. While many charts continue trends in a relatively smooth way, many reverse trends or greatly accelerate them.

    • Open the window and right click then go to "next page".

    • Do you have any hints for those whose browser will not open this link beyond a title page? I would love to read the whole report. Thanks.

    • Thanks for posting the reference, and for the explanation of the chart on p.6.

      Henry Groppe has appeared on our ROBTv several times and I have been impressed by his knowledge.

      After digesting the various charts and the text I am more comfortable than I have been for some time with my heavily overweight commitment to energy.


    • >>>I suspect it is still easier to get oil from shale and drill where there are known reserves (e.g. ANWR).<<<

      I suspect I may not be around to see the commercial development of oil shale in the US. Any body's guess on ANWR

    • >>>Were you aware that Utilities that use NG are filling up their storage regardless of price before the heating season starts?<<<

      I am reminded of this every time we get our winter bills (Houston hasn't had a real winter for years) from CenterPoint.

      >>>I have been considering LNG investments<<<

      There may also be some investment opportunities in the not too distant future for CNG from Eastern Canada or Trinidad.

    • >>...South Africa (SAS) is currently the only country with a commercial application...

      Given the vast reserves of coal in that country, along with the oil embargoes in effect (outside the spot market) during the 70's & 80's, the South Africans had good reason to spend a great deal on both their SASOL plants (synthesizing oil from coal) and coastal exploration (e.g., SEDCO K oil rig).

      I don't know how to map the incentives such conditions created to where we are right now. I suspect it is still easier to get oil from shale and drill where there are known reserves (e.g. ANWR).

      As a historical aside, I believe the South Africans based their SASOL plants on scaled-up WWII German R&D. I believe the Germans also were having oil supply difficulties near the end of WWII.

      Long SJT

    • Thanks for your opinion. I have considered the demand destruction of NG in the chemical and fertilizer industries, but I think it may be that increased demand from new housing, which is largely heated with NG may offset this effect. There are also many new gas-fired powers plants being built by Utilities. Were you aware that Utilities that use NG are filling up their storage regardless of price before the heating season starts? Most can just pass on the increase in price to customers, so they have no incentive to take any chances of running out of NG during the heating season. With the warm winter so far, this effect has not sustained the high prices that were the effect of the storage buildup, but that is a transitory aberation I think. Next year may be very different.

      I have been considering LNG investments, but the risk of terrorist attacks on LNG terminals and ships is a bit of a worry. Both are very easy to identify and find, though maybe I should worry more about Gulf hurricanes' effect on oil and gas companies. The odds are probably greater of damage there if I were make a rational guess without emotion.

      I hope you keep on giving your input; it is most helpful.

    • I was in attendance for his presentation.

      The chart on p.6 shows the compilation by his group of as detailed of the daily oil, condensate, and synfuels production records for both OPEC and non-OPEC producing countries as were available from 1970 through 2004. In aggregate the average daily petroleum production at the end of the period was about 79 million bpd.

      Groppe, Long, & Littell's (GL&L) forecast for the aggregate daily production by 2015 is about 78.5 million bpd. The EIA (Energy Information Administration, US Dept of Energy)forecast for the aggregate daily petroleum production from the same sources is about 110 million bpd, which Mr. Groppe said (not his exact words) they likely arrived at by projecting the current trend lines. He certainly didn't seem to place much faith in the govt forecast.

    • Based on his presentation, I would be inclined to be a little more heavily weighted on the oil side as its use in the transportation industry is not as easily substituted for as NG for the generation of electricity, etc (see charts 5 & 18). One thing he pointed out that you may already be aware of is the relocation of industry heavily reliant on NG such as chemicals, fertilizer, etc. to take advantage of cheaper foreign sources of NG.

      His forecasts for increased use of nuclear power and LNG for electricity generation may warrant the allocation of a percentage of one's energy portfolio in these areas. Uranium miners, however, have already had a huge runup

      He stated that it will likely be some time before synfuels (i.e. coal-to-liquids) will be a viable alternative to NG/LNG. South Africa (SAS) is currently the only country with a commercial application and I believe he said they are currently in the process of planning or building a pipeline to import NG into the area being served by SAS (was giving one of our members who owns RTK a message to take his profits and run so wasn't paying attention).

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