Barron's Banks on $100 Oil

Barron's case for $100 oil by year-end:

• The Saudi's plan (confirmed today) to boost production by 2%.
• A declining rate of consumption as consumers cut back on gas and oil by-products that are becoming increasingly expensive.
• The Fed's pledge to fight inflation could boost the dollar, whose decline was a decisive factor in oil's rise.
• A possible U.S. sale of oil stocks from its strategic petroleum reserve [SPR].
• President Bush's proposal to allow offshore oil drilling off Florida, the East and West coasts, and Alaska, where billions of barrels may lie.

Barron's also makes a slightly more sophisticated argument:

One reason for the strength in crude has been modest U.S. inventories. Bill Klesse, chief executive of Valero Energy (VLO), the largest North American oil refiner, told analysts last month that the inventory data may be misinterpreted as a sign of oil scarcity, though it is more a function of the recent state of the oil market, in which futures prices were below spot prices, giving refiners little incentive to maintain excess supply. If the Saudis sell enough oil to drive down spot prices relative to futures prices, refiners and others will be induced to buy and hold more oil in inventory, he said. The oil market is moving to such a configuration, with the current, or spot price of $135 below the December 2008 price of $136.

Assuming crude does plunge $20-30 a barrel, it says, E&P companies like Devon Energy (DVN), Apache (APA) and XTO Energy (XTO), which have booked hefty gains over the past year, could be in trouble. Majors like ExxonMobil (XOM), Chevron (CVX), ConocoPhillips (COP), BP (BP), Shell (RDS.A) and Marathon Oil (MRO) might hold up better due to their refining businesses and their more reasonable valuations.

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In the same article, Barron's also admits oil "may indeed hit $200/barrel" over the next decade.

So just to make it clear, is "The Saudis could roil the markets with a pronouncement June 22; the dollar could revive or demand could plummet, or all three. And if prices start falling, the downturn could accelerate, sending crude back to $100," a prophetic vision, or a suggestion to short oil based on solid fundamental analysis? Is Barron's calling a top to the "oil bubble" - or just trying to stir the pot?

For those looking to do more research on oil prices and where they're headed, Seeking Alpha's Oil Price page is a great starting point.

Comments

[oregonrain]

Great summary as always. I am just a poor SOB from Oregon. If I really knew I would be sitting in Maui at the moment.

But, right now this smells like a bubble that has not hit the top yet. As people smarter than me have said one of the key elements of a bubble is that they always have fundamentals going their way...to start. Then they get over done.

There still seems to be a lot of this "oil going to $100" out there. So I am thinking that this bubble has a way to go before it pops. Just yesterday as my 20 year old son and I drove to a store he mentioned that he had heard that oil would go down to $100. He never talks about stuff like that.

I want to see all the headlines saying....."oil going to $200" and everyone running around with their hair on fire for a bit longer. I want my "shoeshine boy" (not that I have one) tell me to BUY BUY BUY oil. Then its time to short short short.

I think this Saudi "announcement&quo... is just lip service...they could care less. If they could pump more at these prices I think they would be doing it. I have been convinced reading here that 250,000 barrels a day more (is about what they can really do now ) is not going to move things all that much.

The thing that would make me change my outlook is if the Fed really raises rates soon. That would make me a believer that they want to start the painful process of wring out inflation and that would hit oil hard as the dollar firmed. Right now I do not see them doing that.

So that is the way it looks from out here in the trees.

[SWRichmond]

Expect a coordinated global effort to talk down oil prices. Lower oil serves the best interests of ALL governments. Also expect the evil speculators to be rounded up and broken on the wheel. As I understand it there is now an actual delivery limit in place on NYMEX for silver. Corrupt governments will do whatever they can to squeeze money to where they want it to go and away from where they do NOT want it to go. Free markets.

If the demand destruction that Barron's allegedly expects actually materializes, we will have other things to worry about.

The only question that remains is the one that has begged an answer since this thing began: are "they" still in control of events, or are events in control of "them"?

Looks to me like it's #2.

[SWRichmond]

One more things: The Tech Bubble ran for 5 years. The Housing Bubble ran for 7-8 years. The oil bubble is just a baby. We ain't seen nothing yet.

[dieuwer]

NYMEX will be out of business real soon

[twocentseditor]

Barron's argument loses a lot of credibility when they talk about the Fed's pledge to fight inflation. This is laughable. The Fed creates the inflation. Willingly and without pause; moral or otherwise.

There is an awful lot of talking going on right now with regards to oil and the Dollar. Neither is having much of an effect as of June. US demand has not decreased by even a significant amount, and if we were to see a crash in US demand, our problems would be much larger than oil.

The only problem I see with Valero's CEO assessment is that if he is right, then we should be seeing a glut in the producer areas since refineries aren't stockpiling. We aren't seeing that reported anywhere..

Count on an increase of shenanigans, but unfortunately, I'm dubious of a sustained decrease in prices.

[chris_b]

The Saudi boost has already been shown by many to be a drop in the bucket. China keeps demanding more anyway. Also, this author thinks that oil just pops out of the sea. It's years before drilling off of Florida would have a result. And has he missed the problems in Nigeria lately? The unrest with the 'Iran attack' practice? I think this author is short oil stocks, and is trying to drive them lower. These claims are poorly presented, and poorly researched. Shame on seekingalpha for printing it.

[barnburner]

ah, but it was in Barrons

[sf94127]

All the Saudis have to do is open up the spigot wide for a few months or so and oil prices will plunge. They used to do this to discourage new E&P, alternative energy sources.

[Bill Murray]

I agree with others that oil is going higher. The Fed is hancuffed by the growing (yes, still growing) credit crunch and Saudi talk is just enough to make sure the pot doesnt get too hot causing the frog to jump out. I think there will be sideways movement and then another jump later this summer toward $150. By then, $130 oil will be a way of life so going from $130 - $150 will be "tolerable" as opposed to going from $100 - $150. Did anyone else hear the talks from other OPEC nations saying they would need to cut production to counter act a Saudi increase...? The sad thing is, there most likely is far more oil in the sand than anyone realizes. Think about it, if they were running out of oil reserves, would that be broadcast so the price would jump to $1000 until the last drop was gone???? If the bottom of the well were in sight, they would do everything they could to make sure they got top dollar, including and probably specifically by publicly stating the issue and causing panic. Instead they are hiding their cards and making everyone think the next tank of gas they fill up might be their last.

[omodes123]

--> SWRichmond. We are at the end of the bubble for sure. Crude was $10 a barrel back in Jul-1998. So this is a bubble running for ten years now. It's ripe to pop. Once everyone starts talking about a bubble it usually pops around 3 to 6 months later. Smart money will be selling into strength.

[BrucePile]

On one of Cramer's shows, he presented a table that listed all the times and dates that Saudi Arabia promised to increase production by a certain time and the result. All of these proclamations proved to be false. Cramer called them "serial liars". Even if they would put 500,000 bpd on the market, it likely would be heavy sour crude and would have limited bidding on it from the importers, most of whom have limited refining ability for it. The Saudis are planning to build some new refineries to handle their heavy crude, then sell refined product, which would help with oil prices. But those are not on line yet.

As for what the dollar does, the price of oil has been charted in the other major currencies, and the big climb happens there too (just a little more moderate).

What is really behind the price climb is not total oil production versus demand. It's total exported conventional crude - and this is severely lagging total production and has been falling since '05. As global peak production is approached, a much higher portion of total liquids is unconventional and consumed by the enriched producing nation (see the Export Land Model ELM). This presents two big problems few consider. The unconventional oil (oil sand, shale, deep water) all must be ground up, heated up, or manufactured with massive amounts of fossil fuel as opposed to conventional oil, which traditionally comes spewing out of the ground already made up for us and ready to put into a pipeline! This produces a net energy math problem such that you net only about 1 out of every 3 barrels added from all these sources that have EROI around 3-5. This means it takes 3 barrels of deep water or tar sands oil to replace each barrel of declining conventional crude production! Compound this with the math of ELM, and you have a much sharper decline in net energy supplied than just the total "oil" production numbers indicate. And net exported net energy is what is setting oil prices. This is becoming more and more detached from what has always been considered "oil production", but nobody seems to understand this.

[Brahm]

Oil bulls, or should I say radicals, should not forget that even an average size recession will topple consumption of oil substantially, if prices remain at current levels. I bet uncle Ben and others in Wall Street are fudging economic numbers and conditions to avoid the R tag. To all intents and purposes, the US economy is mosgt probably in mild recession at this time. If you exclude the increase in energy related spending of the typical consumer from the GDP numbers over that of '07, you may well find that the numbers representing i2nd quarter '08 GDP are probably about even or somewhat lower than those for 2nd quarter '07.

Last week,for example, the EIA reported that gasoline consumption was lower by 1.8% from last year (?). Nobody can make a rational case that the massive inceease in the price of energy has not or will not change behaviour of American consumers or drivers, especially those at the lower end of the middle class. I have seen changes in behaviour of drivers in the middle and upper middle class on the street I live on. SUV's. common on this street formerly, have been traded away or quite often are found to remain parked for very long periods. The formerly shunned and lowly small cars are becoming fashinable to drive!

So oil bulls, in my view Barrons has something to its argument for at least the immediate period for the short or intermediate term. A 2% drop in consumption over a couple of months in the US will do wonders for the price of oil. Long term though the price of oil is still going to be on uptrend.

[phillips49]

Let me see if I got this right. The Saudis are increasing world oil availablity by 0.24% (200,000/83,000,000) ( if production doesn't fall of somewhere else like PEMEX or Nigeria) and the price of oil is going to fall by 24%? (32/132). I think I'll stay long on the oil and gas companies. They are going to continue the upward trend interrupted occassionally by hot news flashes that we are awash in oil and everything is OK.

[Alan inHonolulu]

I think I'll continue to stay long my dividend fruitful Canadian Oil and Gas Royalty Trust units. I don't see the Saudi pronouncement of an additional 700,000 barrels added to supply, nor the attempt by the average Americans to reduce oil consumption as being enough to "talk oil down". We didn't get into oil addiction overnight, we won't get out of it overnight. America "needs to go to a meeting".

I'm also long geothermal as a long term solution to base load power demand and a renewable "green" alternative.

[Alan inHonolulu]

Oops! I meant 200k, not 700k. My eyes are getting worse with age. :-)

[SWRichmond]

omodes,

I'd agree with you except this time it's all eyes on the dollar. Everyone's watching; I'm betting that the US politicos will do everything to prevent a deflation, and that means massive reinflation. Not one of them (except one from Texas) has the balls to tell the American people that it's time for pain. If you're buying oil with dollars, this one has a ways to go.

[redbaron]

Cramer had some thoughts on this that I agree with. Here is a link to his video comments in an interview on TheStreet.com:

www.thestreet.com/_yah...

His logic says that gasoline consumption has dropped by 1%, while the price of crude has doubled. Wow! That is really some demand destruction.......or words to that effect. A whole 1%, which is essentially nothing. A whole lot of folks are trying to talk the price of oil down, but I think it is just that....talk. In the meantime, new sources are not coming on-line as fast as old sources are drying up. IMHO

[redbaron]

www.thestreet.com/_yah...

[redbaron]

That link must be too long to copy............go to thestreet.com to see his interview............h... titled it, 'Calling out the oil lies'.

[ari5000]

"Demand destruction" -- people act like this is a given. Everyone can go to a restaurant now and see the empty tables. Or the empty malls. Easy to find cheaper sources of food. Easy to wear old clothes.

I was just visiting New York for a week. Traffic was insane at almost every time of day except 10:30 at night and there were still plenty of cars driving around.

Sorry, but there's no good substitute for the car. Not yet. Not enough to make an impact when the global population is growing fast and sucking up all the extra oil anyway. This world is far too entrenched in oil to impact the reality of Peak Oil. Sure it could go to 100 --- now what do you think traders will do if it dropped that low?

I'd hoard all I could via futures before it went back up to 200/barrel. And so would any other rational investor. Thus -- the chances of a dip of that magnitude occurring, I think, is small.

[sliman]

If there was a TRUE bubble in oil, SUPPLY would have been jumping up with the price spike. Supply has held steady at 85 million barrels a day.

[Romania]

All this talk about the price of oil rising due in part to the falling dollar is a joke. Since 2002, the value of the dollar pegged against a few other currencies has declined about 40%. That translates into about a 65% rise in the price of goods. Right? So, what cost 1.00 back in 2002, should now cost about 1.65. Crude was about $17 per barrel in 2002. 17 times 1.65 is about $28 per barrel. So there is a huge gap that can't be explained by the falling dollar.

On the demand side, I think you have to separate real demand versus speculative demand. Those of us who buy say the USO are not expecting delivery of X number of barrels of oil at some point in the future yet we are executing a trade that exactly resembles that of a true producer or seller of oil who is in fact awaiting the shipping or delivery of a barrel of oil. Those trading with no expectation of delivery are in fact affecting the price of oil. Real demand is actually subsiding on a per month basis this year and over the last few years has been met with adequate supply. It is the speculative demand that is creating the problem. For those of us that can see through the obvious and understand that their are capitalistic forces at work, will appreciate that it is the investment banks and whales that are creating this environment. No bubble can happen without a huge amount of capital. The tech bubble was financed to death and trillions were made and then it burst. The money then rotated into the housing market and then that collapsed. The money has now gone into commodities including oil which will eventually burst. Don't know when, but it will. Morgan Stanley recently upped its date for oil to hit $150 by July 4. How convenient for them as this coincided with Congress recognizing the level of speculation I pointed out above. Legislation will follow to curb it. Also, interesting is that Goldman and Morgan were the only two American investment banks invited to the Saudi Conference today. Wake up everyone. If you are trading in the oil patch, just be nimble and cautious and don't invest your life savings. Don't buy into the story that has been created and invest blindly. Personally, I'm just playing ROYL at this time, which is a natural gas play. Have traded the PDO and FPP's already and may buy some again, but I will do so cautiously.

[Inflation4allnations]

The dollars affect on crude prices are overstated, and what are the Saudis looking to dump on us- more meaningless sour?

www.greenfaucet.net/en...

[toomuchgas]

The Saudi's are just blowing smoke up our ass again. They don't have the capacity to increase production unless you count the heavy oil that no one wants. Stay long the oil companies until it all runs out or Obama nationalizes them.

[elvsinus]

Barron's is bunk. The US consumes approx 28% of the global production. Global production is not increasing with the demand. The $4/gal has barley slowed US consumption. Us consumption is locked to the Auto which is the primary mode of transportation in the US. The infrastructure, not the means to significantly increase production are in place to deflate the cost of oil. IN addition the cost of oil has driven up the cost of coal a major source of power generation. Americans are locked to oil as the primary means to get to work. Ther will be more car pooling, with less time eating out. Discreationary income will be use more to support earnng a living. Retail, Restaurants, theatres, airlines will be the first to suffer, not oil producers.

[hthorse1]

As to offshore drilling having any immediate impact on oil prices - NOT A Chance.
1 - There may not be billions of gallons of oil. No one knows for sure.
Finding out can take years.
2 - If significant oil is found it will take more years to bring out in large quantities.
3 - It doesn't matter how much oil you find if there is no refining capacity. Building refineries will also take years

[Donald E.L. Johnson]

Of course, we were saying a lot of this a month ago. Bubbles burst. Politicians manipulate markets. Speculators rule until they don't. June 23 WSJ.com says Congressional report finds speculators account for 70% of oil futures trading, roughly. NYtimes.com June 23 says Obama has close ties to corn and ethanol producers. Saudis say they'll increase production; China caves and reduces subsidies much earlier than predicted as does India.

If Bernanke and Paulson's jawboning the markets won't depress prices, price manipulation by various consuming and exporting countries' politicians might do the trick.

Institutional investors will sharply curtail their speculating in the futures markets.

[Navivest]

The Saudis have gotten used to the false idea that we have gotten used to higher oil prices and we'll pay whatever. Their attempts to temper rising oil prices so far have been very half-hearted at best. Hopefully, other countries join China soon in reducing and eliminating subsidies.

[decoflair]

I thought at the time gasoline prices rose to $1.00 a gallon that we Americans would do what was necessary to wean ourselves off of the financial strangulation of buying Middle Eastern oil. We became complacent and paid the $1.00 per gallon. Again, I was quite confident that we Americans would bite the bullet and realize that we need to reduce our addiction to Middle Eastern oil when a gallon of gasoline rose to $3.00. I was wrong again! This scenario may be play out in similar fashion. The price for a gallon of gasoline will drop under $4.00. We Americans will be so relieved. Within a year or two, $4.00 will be the accepted base and we will continue with our complacent ways of allowing ourselves to be financially strangled and squeezed of our hard earned money. To paraphrase POGO, we have indeed met the enemy, and it is us!

[Michael Levy]

10 Reasons Why Oil Price Speculation Requires a Change in the Rule of Law by Michael Levy

High oil prices that are governed by the commodity markets are in dire need of common sense law and order. When speculation and detrimental logic and reasoning take central command of human society, the results always turn out to be damaging to the majority, at the abundance of the few. The experts and speculators will argue we need free markets and any interference will take away free trade. Well, in many cases they are correct, however, when it comes to essential commodities of food and energy they are completely out of order. Here are a few reasons why essential commodity markets require new legislation.

1. There has been no shortage of gas at any filling station for the past 10 years yet prices are up 1200% because of futures trading going out more than eight years. Even the Saudi oil minister has recently stated the price of a barrel of oil should be no more than $70.00. Demand from China and India is still far less than that of the USA. The Chinese stock market is down 50% signifying a sharp slow down. This news still is not enough to stop the wild speculators hiking the oil prices.

2. When hurricanes hit Florida many gas stations are closed and there is a real shortage of gas for a few days. However, if a gas station increases its prices they will be prosecuted for price gauging. Therefore, if we take the experts argument that there is a shortage of oil then that still does not give anyone the right to profit from the shortage as this is deemed to be prices gauging. How can the USA governments have double standards and prosecute gas station owners who price gauge and not treat commodity markets in the same manner?

3. Oil is an essential commodity for every day living in the same way as water is an essential commodity. It makes no sense to trade water so why leave oil in the hands of anyone who wants to make a quick buck gambling on prices.

4. Pension and hedge fund managers have invested billions of dollars in oil futures. The futures markets are very volatile, thus, no place for pension funds to risk the money for people who trust them to build future wealth. The fiduciary duty of a pension fund manger is to find reasonable returns with low risk and the commodity markets is not that place.

5. If the price of oil was regulated between $40.00 - $80.00 a barrel, the price could go up and down on supply and demand. This would be fair to everyone, for even when supply was plentiful, the price would not drop below $40.00 which will still give a fair profit to most oil related industries. When oil is in short supply the price would be limited to a ceiling of $80.00 which is more acceptable to world economies.

6. There is a moral issue that greed cannot come before peoples basic needs ... No right-minded, ethical, principled government can allow starvation and financial ruin because of a system of trading that is completely out of control.

7. The price of a barrel of oil effects transport, food supply, industrial production and every part of modern day living. If terrorists wanted to devise a plan to destroy the world. economies what better way than finding a method to allow oil to trade at $140.00 a barrel. Why play a game that makes terrorists and anarchists happy.

8. Goodwill to all people is the credo every democratic country is built upon.$140.00 a barrel oil delivers no goodwill. It only brings hardship and political uneasiness.


9. Noble deeds and fair dealing is the hallmark of success for every truly prosperous person. Since the world is made-up from people, where are the noble deeds and fair dealing in the commodity pits.

10. We are all put on earth to help each other succeed in the pursuit of freedom, liberty and happiness. There is no freedom when people are slaves to greed. There are only liberty takers when oil trades over $80.00 a barrel. And finally financial hardship brings misery and discontent.

The time for change in essential commodity trading is now. To quote a few voices from the past...

“Experience demands that man is the only animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor”_Thomas Jefferson

“For greed all nature is too little.”_Seneca

“It is greed to do all the talking but not to want to listen at all” _ Democritus

“He who is greedy is always in want.” _Horace

[JohnPseudonym]

Oil is in a bull market for the long haul. The charts suggest we have gotten ahead of ourselves, so a pullback is to be expected.

Over the long term of 5 to 10 years the price of oil will continue to rise. there will be up and downs, but if you buy the big dips you will make a fortune.

[Right inSanFrancisco]

Newt Gingrich has a great short video on energy at youtube.com/watch?v=UO....
1. Stop the speculators by releasing some of the strategic petroleum reserve.
2. Develop our resources - drilling; shale
3. Include nuclear in the long range solution.

[Investor612]

A quote from the Barrons' article:

"In the next decade, oil indeed may hit $200 a barrel. But prices could fall to $100 a barrel by the end of this year if Saudi Arabia makes good on its pledge to increase production; global demand eases; the Federal Reserve begins lifting short-term interest rates; the dollar rallies, and investors stop pouring money into the oil market. China raised prices on retail gasoline and diesel fuel by 18% Thursday, in a move that is expected to curb demand."

Hmmm.

IF Saudi Arabia increases production.
IF global demand eases
IF the FED raises rates
IF the dollar rallies
IF investor bullishness on oil cools

That's a lot of "IF's" to making predictions on.

[nakedjaybird]

nakedjaybirdJun 23 02:07 PMWhere have some of you folks been? In "school" maybe???

In the early 1970's we concluded it was going to take hybrid electric vehicles for anything beyond the basic 40-50 mile daily commuter using fully electric cars, when and if he was ready to switch from huge gas guzzlers (we knew this because we built and tested electric vehicles! And, there is a market for both types of vehicles). The shackles have been off for the private sector for 40 years.

We were also growing silicon ribbon and producing solar volataic panels in the 70's. The shackles have been off for the private sector for 40 years.

We have used windmills for long before many of you folks existed. Seems like we know how to make and use all of the components. The shackles have been off the private sector for a long time.

One of the major problems is the selfish consumer. His shackles have been off - he's had some free choices.

Another major problems is we have permitted our Government give our tax dollars to big oil thru tax breaks (research, investestment credits, depleption allowances, and on and on).

WE HAVE NOT DONE THE RIGHT THINGS;

NOT EVEN THE THINGS WE WERE/ARE CAPABLE OF DOING. BUT........... THAT ..........

Didn't stop France from going 80% nuclear.

Didn't stop Germany from going 40% solar.

Didn't stop Brazil from going 60% biofuel.

Didn't stop Switzerland (and many other European countries) from going electrified rails for people and goods, and even electric ferries (they put rubber tired hiway diesel busses on electrified rail cars for certain legs of their journeys).

Didn't stop Europe from building and using small economical cars, nor electric delivery vehicles, etc.

So where has the US been??

I guarantee you, without LEADERSHIP, we will not get there....................

We have had the techonologies; we've had the money; we've had the resoures; we've had our heads somewhere, like where the sun doesn't shine.

AND FOR THAT, THERE IS JUST TOO MUCH EVIDENCE!!!!!!!!!!!!!!...

[Goody]

For 2 1/2 years the Saudi's have been declining oil production at a rate of 6% per year. There peak produciton was at 11,111 barrels per day now even with theiry proposed increase they will only be at 9,700 barrels a day

[Prognostic]

On a per capita basis an American consumes 52 barrels of oil a year -- the highest in the world. Indians consume 1 barrel per person per year and China 2 barrels per person per year.

If the U.S. consumer on the average cuts his consumption by 2% that is equal to 1 (appx) barrel of oil per person per year. That frees up about 250 million barrels of oil per year.

It is the math above that pundits forecast when talking about China and India's demand increase. When the U.S. consumer cuts his consumption the Saudis will choke in their sleep. $100/barrel oil is not optimistic talk -- it is a reality that will happen.

[catbird]

Speculative energy futures trading is said to be 71% of trades and has been feeding upward price levels. This speculative fever can be controlled by having margins for energy and other commodities raised to 100%, both in the U.S. and foreign exchanges. Without cooperation elsewhere, domestic traders would go to other global exchanges.

[PeterSterling]

China is expected to have 140 million automobiles plying its roads by 2020, seven times more than now, fueling demand for transportation infrastructure and services. If you think oil is going to go down in price with all this demand increase, think again.

Here is how America can fix itself up:

www.strategicnine.com/...

The "America First" Energy Plan for safe, secure domestic supplies of Transportation energy.
AMERICAN ENERGY FOR AMERICAN'S: BASIC ELEMENTS FOR AN ACTION PLAN
Proposed Presidential Executive Orders:
Declare an energy emergency and set aside the OCS and ANWR moratoriums and some permitting requirements so as to fast-track various critical new energy developments.
Declaration granting a tax holiday for declared special "American Energy Economic Zones" (AEEZ), see below.
Declaration temporarily eliminating up front oil and gas lease payments, royalties and other imposts, as well as regulatory delays.
Declaration making available $200 billion p.a. in low-cost construction financing guarantees and other incentives for new energy projects in AEEZ areas.
Proposed Government Actions;
1) Cancel the Moratorium on drilling on the US Continental Shelf today.
2) Cancel the Moratorium on drilling on the Artic National Wildlife Refuge (ANWR) 1002 area today.
3) Support the three international waters resources rights Claims made by American Companies to contiguous oil and gas reserves that could be developed without any regulatory lags. (See; strategicnine.com and unoilgas.com ).
4) Put aside most of the timeline and permitting requirements for urgent, identified critical energy projects as listed here in declared "American Energy Economic Zones" (AEEZ) “in the national interest” by creating a fast-track office to evaluate and approve requested leases within 90 days.
5) Allow unsolicited OCS Lease Applications anywhere immediately, grant them on a first-in first granted basis.
6) Enlarge new OCS post-moratorium lease block sizes from the paltry 5 mile by 5 mile area to a more realistic size of perhaps 100 miles by 100 miles in frontier regions.
7) Provide a ten year tax and impost holiday on strategic new oil and gas development projects in AEEZ areas. Offer matching funds for seismic and EM surveys to be repaid from eventual production to get oil flowing sooner.
8) Provide low-cost loan guarantees for development of urgently required new oil and gas project infrastructure in AEEZ areas.
9) Provide low-cost Government guarantees or loans for offshore oil and gas ships and vessels built to work in the US AEEZ areas for the next 5 years.
10) Temporarily exempt approved oil and gas projects within the AEEZ areas from the US Cabotage laws so that projects can more quickly secure production equipment from overseas shipyards.
11) Set Aside Regulatory Delays for projects within the AEEZ areas. Make regulatory bodies set up departments to “fast-track” approval of energy projects to clear hurdles within 3-6 months.
12) Eliminate Frivolous and Mendacious Lawsuit Delays for projects in AEEZ areas: Create a special court to hear energy related cases with a mandate to adjudicate cases within 7 days. Example: the lawsuits currently stopping Shell from drilling off Alaska, partly on the basis that their ships might bump into whales; if applied to the rest of the world’s oceans would cease all shipping and world trade!
13) Provide 250,000 new grants for students to pay for college for future petroleum engineers and geologists, and for technical petroleum production job training programs.
14) Eliminate any royalties, taxes and permitting costs on critical new energy projects in AEEZ areas for ten years, to enable energy companies to spend every dollar of risk capital they have on US drilling, building production equipment, and related expenses, as only holes in the ground will solve the energy problem.
15) For transport; Provide tax and other incentives to build distribution infrastructure and car-truck conversion stations to switch 25% of the US vehicular fleet to compressed natural gas within 10 years. This will lower demand for oil and lower CO2 emissions, and would require approximately 5 Trillion cubic feet (Tcf) per annum of gas.

[AmesTiedeman]

They are wrong. We go to 250.00