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To: patron_anejo_por_favor who wrote (24162)	10/3/2000 5:16:54 PM
From: Ken98	Respond to of 436258

Patron, oops, we crossed posts. Yep, continued tightness in refineries. I want someone to create a "NG reserve" for MY heating bills this winter!

To: patron_anejo_por_favor who wrote (24162)	10/3/2000 5:30:18 PM
From: Ken98	Read Replies (2) \| Respond to of 436258

New Simmons Report (partial quote): <<So a decade of warnings went unheeded and today we find ourselves in the early stages of a savage Energy Crisis. But it turns out to be far different crisis than what I originally worried about. I feared we would face an Oil Shock. I was wrong. We are now facing a true Energy Crisis as too many key parts of the world have run out of the ability to increase electricity demand, natural gas demand and petroleum demand. All three prime sources of energy converged into a limit against further growth almost simultaneously. The situation is real. And it is very grave. If any of you read “The Perfect Storm” where a 100-year world-class storm materializes out of nowhere through the convergence of three freak weather systems, our Energy Crisis results from the same phenomenon. All three energy fronts are now colliding with each other. Let me also be perfectly clear. The world has not run out of oil and North America has not run out of natural gas. Moreover, there are still lots of potential kilowatts to create. What we have run short of is any way to grow the supply of each of these energy sources. In the meantime, significant bottlenecks exist which will.3 possibly make it hard to even keep the supply of all three energy sources flat. There is a definite risk that each source could actually decline before any solutions to finally get supply growing again can be implemented. Let me begin putting some details into this bleak picture with a few commentaries on world wide oil supplies. There are only a handful of meaningful new supply projects now underway throughout any of the 40 key countries that keep the world oil supplies in tact. Do not look for a lot of growth in worldwide oil supply from new projects coming on stream. There are not enough projects for this to happen through at least 2005. The big supply question on the oil front is how much capacity is left behind OPEC”s wellhead valves, just waiting for a valve to open before coming on stream. There is lots of speculation about OPEC’s excess capacity. But all guesses are simply guesses. No one really knows the answer and no one will know until it is clear that all the taps are finally on. The guesses still range from as high as 3 million barrels a day to as little as 500,000 barrels a day. But even these numbers often start with a difference of opinion on what the OPEC countries are now producing. I might as well throw my guess into this vacuum. It would be impossible for the world to still have 3 million barrels a day capacity left. The people tossing out these numbers lack the knowledge of what too many key fields are now doing to.4 make these guesses even credible. I worry that the real number is very near the bottom of this range and maybe even below 500,000 barrels per day. But, my guess is simply a guess. North American natural gas has no excess capacity. It disappeared several years ago. What we do have is extremely aggressive decline rates in almost every key production basin making it harder each season to keep current production flat. The electricity business has also run out of almost all existing generating capacity, whether this capacity is a coal-fired plant, a nuclear plant or a dam. The electricity business has already responded to this shortage. Orders for a massive number of natural gas-fired plants have already been placed. But these new gas plants require an unbelievable amount of natural gas. This immediate need for so much incremental supply is simply not there. For all intents and purposes, we are now out of any meaningful energy cushions, not just in the U.S. but virtually throughout the world. This picture is grim enough. But it is merely the tip of the “limitation iceberg.” We have about 120 spare rigs of any type in the entire world which are currently idle. But, shift to any continent and you end up seeing 20 spare land rigs in Africa or 9 in Europe. These are not big rig numbers for significant drilling arenas..120 spare rigs are not many in the first place, but when you look at the quality of many of these rigs, you see many are at the bottom of the food chain and are in terrible shape. It is also questionable whether some of these rigs can even work or can get trained crews to run them.>> simmonsco-intl.com