In the world of oil, about 50 people control what happens. What is going on, right now, is NOT what you may think. Most of it is not making the news.
Indeed, the energy market used to be predictable. But the future of energy and the way oil companies are financing their efforts is changing. There are ‘super shifts’ coming in the oil business – three main ones, in the near future.
The 50 or so people that make up the Inner Circle of energy have some new plans. They control about 90% of the worlds energy markets – and they are making these super shifts happen.
Supershift #1. Chavez of Venezuela soon cuts the U.S. out of $48 trillion worth of oil.
Mr. Chavez sits atop the Orinoco Oil Pool Reserve, about 600 billion barrels of “heavy crude”. It’s estimated at $44 trillion… and he’s already booted Exxon and Conoco, inserting his state run oil company in their place. Right now only the U.S. refineries can handle traditional ‘heavy crude’ like the Orinoco output – but refineries in the Caribbean region, in Jamaica, Ecuador, Trinidad, etc. are gearing up to handle it. This will change the distribution of oil and will obviously impact southern US refining states and their seaports. Once Chavez no longer needs our refineries, he can sell his juice to China, India and else where at will. And oils Inner Circle is going to make this happen. They don’t care about nations or loyalties – profit is their motive.
Supershift #2. China is ponying up $2 billion to tap into Western gas-tech.
Formerly un-reacheable oil and gas reserves are being tapped in the US right now, thanks to technology advances. Some are actually calling it a glut. Just one of the many gas reserves, The Marcellus Shale Pool in the eastern US, is worth about 2 trillion dollars. Sinotec, China’s state run petroleum concern, is working hard to understand how we are getting AT these deposits… so they can apply what they learn all over Asia. Once they catch up on the hi-tech drilling and extraction methods we have pioneered, they can tap into Mongolian, Turkish, Indonesian and other reserves outside OUR current reach.
Oil field Servies companies dealing in hitech drilling and extraction in the US are seeing huge profits right now – and that should continue to skyrocket as China buys their way into the cutting edge oil business.
Supershift #3. Extraction technology unlocks Americas $40 trillion reserves – at last.
California’s conventional production has decreased by almost double digits in recent years – BUT it still sits on 500 billion barrels of hydrocarbon fuel, called the Monterey Shale. Mostly crude oil shale, it has been able to yield only 10% of it’s oil until recent advances. One of these technologies is called Managed Pressure Drilling, first used in 2005. It uses acidized mud and air injection to lift much larger quantities of oil than before, at a cost of only $80 per barrel. It could account for 70 years worth of usage at a fraction of our current import cost… and cut our current tanker imports in half almost overnight. That is a homegrown super shift!
These three shifts will account for some serious changes in our energy future. Many things can happen… who knows, someone may knock off Chavez tomorrow. But these shifts are in the works, right now. The names Orinoco, Marcellus and Monterey Shale are going to become household words, soon enough.
Thanks to Prof. Michael Koors for his comments.