Dear Wealth Daily reader:
The players have stepped off the bench.
All the major oil companies, Exxon-Mobil, BP-Amoco, Shell, Chevron-Texaco, are now bracing for the oil bombshell.
Exxon-Mobil’s CEO may publicly state that the "world is awash with oil," but the giant oil company has discreetly hopped on the bandwagon with those predicting the upcoming peak in oil production.
In their report, The Outlook for Energy: A 2030 View, they claim that the peak oil crisis is only five years away.
Hubbert knew about this oil peak 50 years ago! Has it really taken Exxon this long to catch up?
Not really.
The longer you deny the existence of something, the longer you can prepare for it.
Exxon is now the largest company in the world. And that’s not an accident.
So now that all the big boys have publicly recognized peak oil is real and we know for sure that difficult times are ahead, could things get any worse?
You better believe it, especially if you are an American. In fact, America is staring at a nightmare that’s 1.3 billion people strong.
A snake in the grass.
China.
China is sucking the lifeblood out of America.
Canadian Synenco Energy said today that it has sold a 40 per cent stake in the Northern Lights oilsands project to SinoCanada, a subsidiary of China-based oil monster Sinopec Group.
This is the second major oilsands-related project to involve a Chinese company in recent months.
In April, Calgary-based Enbridge announced a future deal with PetroChina, China’s largest oil company. The deal targets about half of the anticipated capacity of Enbridge’s so-called Gateway Pipeline, equivalent to 200,000 barrels a day of oilsands crude.
Only earlier this month the China National Offshore Oil Corp. attempted to buy Unocal, America’s ninth-largest oil company. Fortunately the attack was stopped by Chevron-Texaco who acquired the company first.
An expert from the China National Petroleum Corp. stated that output from offshore oil fields and from western regions will account for more than half China’s total import by 2010.
Very soon Chinese oil consumption will be on par with the US.
So domestic oil production can’t possibly keep up with the present demand. China is currently becoming a major competitor with the US for foreign oil.
In fact, a look at the map of the world shows you how potentially combustible the situation is becoming.
Where are we going to find energy for the future? Is there an alternative?
Experts are telling us, probably not.
Solar and wind energy have failed Exxon-Mobil’s profit test.
Despite the growing popularity of renewable energy sources, top competitors have shied away from investing in solar and wind energy, arguing that the business is viable only with Uncle Sam’s help.
Exxon estimates solar and wind energy demand will grow only on the back of government subsidies and tax breaks.
Take away the handouts, and investing in wind and solar energy is a no go.
Exxon says that even if the economics made sense, solar and wind energy would stand to make up only a tiny slice of the company pie.
And fuel cells. Ha!
After pumping ridiculous amounts of money into the sector with no serious financial return, investors have finally realized that the area poses too much risk.
Next to the man who puts vegetable oil in his car, my favorite neo-energy idea is the grass-burning power station.
The Eccleshall Biomass project has built a ?6.5m power station that will be burn locally cultivated elephant grass and will be able to supply electricity to about 2,000 homes.
Despite the good intentions of these envrio-friendly organizations the fact is that oil and gas will remain the dominant energy sources that keep the world running until…..
……well, you already know.
By Luke Burgess
Wealth Daily’s geopolitical correspondent
