Shale oil
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10 Ways the U.S. Shale Oil Boom has Made North Dakota an "Economic Miracle"
Thanks to the U.S. shale oil boom, some parts of the country are experiencing growth comparable to emerging markets.
The best example of this high-powered economic surge is in North Dakota.
North Dakota is the epicenter of the Bakken shale oil boom. Since 2009, it has had the fastest growth in personal income, tax revenues, jobs and home prices of all the 50 states. The state also has enjoyed both a population surge and the lowest unemployment rate in the country.
According to July 2012 figures from the U.S. Census Bureau, the state's population rose by 4% in just two years - compared to 1.7% for the nation as a whole. The western part of the state, where the Bakken is located, may see its population jump 50% over the next two decades, according to a North Dakota state survey.
For North Dakota as a whole, at the end of 2012 the unemployment rate was only 3.2%. In the 12-county Bakken region of the state, unemployment stood at a mere 1.8%. In Williams County, which is at the heart of the Bakken shale oil boom, unemployment was at a miniscule 0.9%
This is why some have called North Dakota an "economic miracle."
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Why the "Death of Peak Oil" Still Won't Mean Cheap Oil
Today (Wednesday) an analyst from Citigroup became the latest lemming to declare the death of peak oil.
In a report entitled "The End is Nigh," Seth Kleinman says a combination of flattening demand and rising supply will cause oil prices to slide slightly by the end of the decade to $80-$90 a barrel.
But while oil companies have made many large new discoveries over the past few years, including big shale oil finds in North America and Australia as well as deepwater finds in the Gulf of Mexico, that doesn't mean oil prices will fall.
In fact, according to Money Morning Global Energy Strategist Dr. Kent Moors, it's far more likely that oil prices will continue to rise over the next decade.
Moors points out what most other analysts seem to be missing - that all of the new oil finds present many challenges that will add to the cost of extraction.
"None of this new volume is light, sweet crude," Moors said. "The average wellhead costs continue to go up, and that moves its way downstream to processing, wholesale, and retail."
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Forget the Kneejerk Reactions, Oil Prices Are Going Higher
With all of the concern exhibited over Cyprus' problems with banks and China's high-profile billion-dollar solar implosion, the doomsayers are once again predicting an oil price crash.
These guys must really need your money!
Each new geopolitical event is cast as the end of the world as we know it.
The fact is there is nothing on the horizon that will collapse oil prices for one very simple reason.
The prospects for oil prices are increasing, and elevating oil products along with them. Most sections of the U.S. will be testing 2008 gasoline price highs at the pump well before mid-summer.
Yes, we did see a swing down in crude futures during the initial stages of the Cypriot crisis, augmented by some short-lived negative comments on Chinese industrial prospects.
But by last Friday morning, stabilization had occurred and an oversold crude oil futures market began to move back up.
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Oil Companies Hope for New Opportunity in Energy-Rich Venezuela
One of the biggest headlines recently related to oil companies was news of the passing of Venezuelan President Hugo Chavez.
"El Commandante" as he was affectionately referred to by his countrymen, at least by those who approved of his leftist policies, was 58 and succumbed to a lengthy battle with cancer.
Predictably, news of Chavez's passing has sparked ample speculation about what the future holds for Venezuela's oil industry and those oil companies looking to profit from a possible renaissance there.
Venezuela is South America's largest oil producer and an OPEC member. In what may come as a surprise to some investors, Venezuela could be called the Saudi Arabia of OPEC.
In other words, the South American nation is home to about 300 billion barrels of proven oil reserves, compared to about 270 billion barrels in Saudi Arabia. That is according to OPEC's own estimate.
Not only that, but Venezuela is home to the largest natural gas reserves in the Western Hemisphere.
Given those superlatives, it is easy to understand why some Western oil companies are cautiously optimistic about what the future may hold for them in Venezuela.
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Why Bigger Isn't Always Better in the Oil Business
Forty years ago, British economist E. F. Schumacher wrote that "Small is Beautiful" in a famous book by the same name.
The vision champions market approaches that discount the importance of size to results, a philosophy that contrasted the notion that "Bigger is Better."
In bringing the idea of his teacher (Leopold Kohr) to a broader canvass and a wider audience, Schumacher began a debate that has revolved around the impact of technology and market size ever since.
Just last weekend, the debate renewed.
Again it was an English environment, but the subject matter would have been quite unexpected only a few years ago. This time the occasion was our annual energy consultations at Windsor Castle outside London. The debate focused on both size and profitability of oil companies in the development of new fields.
The key lesson: During expanding times in the oil business, like today, small is not only beautiful.
It is also profitable.
And it can be for you as well if you take the time to learn why...
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Chinese Firms Increase Stakes in U.S. Shale Oil Projects
China National Petroleum Corp., the country's largest oil company, is joining a rush of Chinese companies seeking stakes in U.S. shale oil and shale gas projects.
According to Bloomberg News, Chinese energy companies, both state-run and private, are seeking to invest more than $40 billion in U.S. shale energy.
Readers may remember the Chinese oil and gas producer CNOOC Limited's (NYSE: CEO) $19 billion bid for U.S.-based refiner Unocal, which was rejected by federal regulators in 2005. (Unocal later merged with Chevron Corp.)
Although CNOOC was recently able to complete a $15.1 billion purchase of Nexen Inc., a Canadian oil and gas company with assets in the Gulf of Mexico, outright takeovers of U.S. energy assets by Chinese companies are probably still not welcome.
Chastened by its experience with Unocal, CNOOC has not attempted to buy any U.S. company outright.
However, after developing a relationship with Chesapeake Energy Corp, (NYSE: CHK), CNOOC has purchased stakes in specific Chesapeake projects in Colorado and Wyoming.
"They didn't come over here and try to buy Chesapeake," Chesapeake CEO Aubrey McClendon told The Wall Street Journal. "They came over here to buy a minority, non-operating interest in an asset and not take the oil and gas home."
So why do the Chinese want to invest billions of dollars to fund shale oil and shale gas projects in the United States when it won't be able to export the energy products back to China?
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The Next U.S. Shale Oil Boom Could Be in California
The U.S. shale oil boom has hit Texas and North Dakota - and is now looking to take over the Golden State of California.
California's Monterey Shale formation covers 1,750 square miles from southern to central California and is believed to contain more shale oil than North Dakota's Bakken and Texas's Eagle Ford combined.
The potential of the Monterey Shale formation is enormous. According to IHS Cambridge Energy Research Associates, Monterey may hold about 400 billion barrels of oil - roughly half the amount of conventional oil that Saudi Arabia has.
The energy research director at IHS, Stephen Trammel, told CNNMoney, "Four-hundred-billion barrels, that doesn't escape anyone in this [oil] business."
Even if that is an overly optimistic estimate, there is enough recoverable oil there to make it worthwhile.
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The Arckaringa Basin Could Be the Largest Shale Oil Find of All Time
Over the past few days, I have released information on what could be the largest shale oil find ever recorded.
It's located in an area of Australia called the Arckaringa Basin and contains as much as 233 billion barrels (or more) of recoverable shale oil.
That's more than all of the estimated oil in Iran, Iraq, Canada, or Venezuela. And it's just 30 billion barrels shy of the estimated reserves in all of Saudi Arabia.
The discovery at the Arckaringa basin is so big it's already prompting some observers to begin talking about energy independence for Australia, much in the same way Americans did after similar discoveries in the Bakken, Marcellus, Eagle Ford, and Utica basins.
And there is one small company that controls what is shaping up to be the biggest worldwide oil project to hit in decades.
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After Nexen's Buyout, How Should You Play Canadian Oil Sands Stocks?
The purchase of Calgary-based energy company Nexen Inc. (NYSE: NXY) for $15.1 billion by China's CNOOC Ltd. (NYSE ADR: CEO) is the largest overseas purchase ever by the world's second-biggest economic power.
But it will likely be the last time China, or any other country, takes a big chunk out of Canada's oil sands - the world's third-largest proven reserves of crude oil.
That's because after Canadian Prime Minister Stephen Harper approved the Nexen deal in December, he banned further foreign firms' investment in Canada's oil sands and will allow them only under "exceptional" circumstances.
"The government's concern and discomfort for some time has been that very quickly, a series of large-scale controlling transactions by foreign state-owned companies could rapidly transform this [oil sands] industry from one that is essentially a free market to one that is effectively under control of a foreign government," Harper said in December.
"Foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada," he added.
But foreign government control isn't the real problem facing Canadian oil sands companies.
