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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Umunhum who wrote (91263)	9/28/2007 2:44:06 PM
From: Fiscally Conservative	Read Replies (1) \| Respond to of 206131

That is one heck of a position! I gather there are no Bears lurking in your neck of the woods.

To: Umunhum who wrote (91263)	9/29/2007 7:24:42 AM
From: elmatador	Respond to of 206131

ENERGY MATTERS: Greenspan Grapples With 800-Lb Oil Gorilla NEW YORK (Dow Jones)--Here's some rational exuberance about high energy costs from former Federal Reserve Chairman Alan Greenspan: the rally in crude oil prices could have been a lot worse. The bad news is that still higher prices lay ahead. While the Organization of Petroleum Exporting Countries blasts speculators for driving crude oil prices to record highs, Greenspan, in his new book "The Age Of Turbulence," salutes deep-pocketed investors for their role in tempering what would have been an even greater surge in prices. "Their activities speeded the necessary price adjustment that moved some crude oil from OPEC reserves to aboveground inventories of the developed world," Greenspan writes. "...Without the buildup in inventories owing to speculation, the world would surely have eventually experienced a far more precipitate and severe oil shock than actually occurred." Greenspan, an icon of the global economic scene for the past 20 years, is back in the spotlight scarcely before financial markets got used to him being gone, and his book casts further light on his pretty extensive grasp of energy issues. Taming the "800-pound gorilla" of dependence on Middle East oil that threatens to "bring world economic growth to a halt," Greenspan says, may necessitate what many view as a politically difficult solution: the imposition of a sizable U.S. gasoline tax. He faults OPEC members for failing to invest enough in crude oil infrastructure to meet rising demand. "With the exception of Saudi Aramco, none of the OPEC national oil monopolies has professed a desire to contain oil-price increases by expanding crude-oil capacity," Greenspan says. Instead, OPEC members "seem most concerned that excess capacity will bring down prices and the huge revenues on which they have come to depend for domestic political purposes." Saudi Arabia's Oil Minister Ali Naimi is often called the Greenspan of oil, because his comments are deciphered for clues on the oil-production policy of the world's largest oil exporter and the de facto OPEC leader. While not exactly dishing dirt, Greenspan writes of Naimi's concerns when the pair met in May 2005 (when oil prices were near $50 a barrel as against $83 a barrel now). Naimi, Greenspan says, "was clearly uncomfortable with measures the U.S. was proposing to restrain oil consumption and, by extension, OPEC oil revenue. "He is acutely aware that if oil prices rise too high, consumption could be permanently lowered as major world consumers shift their emphasis to petroleum conservation." Higher Demand, Higher Prices After the oil-price shock of 1973 consumer behavior changed, with a dramatic shift to fuel-efficient cars, the former Fed official wrote. In the coming years, Greenspan sees plug-in hybrids and electric cars making a dent in demand for transportation fuel, citing the staggering statistic that one out of every seven barrels of oil consumed globally daily is burned on America's roads by automobiles and trucks. Heavy trucks on U.S. roads, by themselves, use as much oil each day as Germany. He gingerly weighs forecasts for future oil demand released by the U.S. Energy Information Administration and the International Energy Agency, which call for global oil demand growth of around 1.3% to 1.4% annual between 2005 and 2030. There's enough oil in the ground to meet 2030 demand of 116 million barrels a day, up from 84 million barrels a day in 2005, he says, but isn't convinced that OPEC will provide about half of the needed extra oil, as the IEA expects. "Too many things have to go right to achieve the IEA's and EIA's benign vision of 2030 - a balancing of world oil supply and demand with real oil prices only modestly higher," he notes. "I cannot forget how wildly wrong the U.S. Department of Energy was in its 1979 forecast of $150-a-barrel oil in 1995 (in 2006 prices)." Higher Gasoline Prices Needed Greenspan cut to the chase with an obvious solution to spiraling oil prices: U.S. oil consumption must decline and one way to achieve that would be to impose a gradually increasing gasoline tax. "I come very reluctantly to taxes as an alternative to accomplish what competitive markets could do," he says. "Significantly higher gasoline prices" are needed to spur use of alternative fuels, Greenspan says, adding that corn-based ethanol can play only a limited role, while cellulosic ethanol from switchgrass or agricultural waste seems to hold greater promise. Sparks flew after first word of Greenspan's comment that: "The Iraq war is largely about oil." He later told the Washington Post that he didn't mean to imply that the U.S. was seeking to wrest control of Iraq's oil fields, but rather that Saddam Hussein need to be stopped or he would have tried to gain control of the region's vital oil. "Projections of world oil supply and demand that do not note the highly precarious environment of the Middle East are avoiding the 800-pound gorilla that could bring world economic growth to a halt," he says. (David Bird is senior energy correspondent for Dow Jones Newswires). Source: David Bird, Dow Jones Newswires; 201-938-4423; david.bird@dowjones.com