Tuesday, January 25, 2005

OK, let’s try this again.

After some mild cajoling from a few friends I’ve decided to try blogging again. So what is there to write about?

On the national stage, Bush is asking for an additional 80 billion dollars for his disastrous little foreign venture into Mess-O-Potemia (credit to the Daily Show). This will bring the projected 2005 federal deficit to about 450 billion dollars. (As measured the cheating way which includes adding Social Security tax revenues in rather than keeping them separate in a “lock box”.)

Also apparently torture is common in post-Saddam Iraq and it is routinely administered by Iraqis, Americans, and Brits.

Bush wants to overhaul Social Security, supposedly because he is worried about the impending crisis in paying out benefits – which won’t occur until after 2040.

On the local stage, the fat, ugly, pompous Talmage Heflin is still trying to do in the legislature what he couldn’t do in the polls – that is defeat Hubert Vo. Unfortunately this is the Texas Legislature which was bought and paid for by Tom DeLay, so I worry for Vo.

In Houston, a police officer was convicted of criminally-negligent homicide for shooting and killing an unarmed 14-year-old boy, but was only given probation as a punishment. The amazing thing about this case is that there were any charges at all. In Houston, if you are a cop, you can get away with murder. Literally. It has been proven over and over.

Lastly, lets talk about oil again. My prediction was that 2004 would end with oil over $50/bbl. I missed by a few dollars per barrel. My blogging friend, Webster Hubble Telescope won my oil price prediction contest that started back in August. His guess for the highest daily price for 2004 was $58.97/bbl. The high price on the NYMEX this fall was $55.67.

I don’t know where the price of oil is going this year. It seems to be fluctuating around $50/bbl. However, I do believe that the mid-term price pressure is UP, UP, UP. Within 3 to 4 years we will see astronomical oil prices. Mark my words. International oil companies and national oil companies are not investing at anywhere near the rate necessary to stave off the coming crisis.

Most the international oil companies (Exxon, BP, Shell, Chevron-Texaco, Total, Repsol) are following a strategy stupidly termed “capital discipline”. I call it “scared shitless to make a business decision”. The people running these companies are what I would call “Holocaust Survivors”. They grew up in the oil industry in the late 70’s and early 80’s when the price of oil was soaring and the oil industry was drenched in cash. Then in the mid to late 80’s the bottom dropped out of the price of oil. This low price world lasted for about 15 years. Then around 2000 things started to change again for fundamental reasons – namely that the world’s thirst for oil is exceeding the available supply. Most major energy companies are continuing to invest as if the price of oil will never exceed the mid $20’s. The 15 years these guys spent wandering in wilderness of low prices has shell shocked them into a mindset that they can’t get out of. The first one of the major companies that breaks with the pack and starts investing for a $50/bbl world is going to make a killing.

Sometimes my job in the oil industry feels like shopping in a Soviet Safeway. You are hungry, your pocket is full of rubles, but there is nothing to speak of on the shelves. And what there is doesn’t look very fresh or appetizing. But since we all have to eat we buy the crap that’s on the shelves and convince ourselves that it really is much better than it first looked.

OK, now I feel better. More to come in the near future.

Oh, and just look at this mess. It's about time to clean up this page a bit. Maybe a redesign. Who knows.

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