Is Oil Getting over?Is Oil Getting over?

This is perhaps the most debated This is perhaps the most debated question of first decade in 21question of first decade in 21stst century.century.

Is Oil getting over?Is Oil getting over?

The debate can be continued foreverThe debate can be continued forever

But let us look at this picture in a little But let us look at this picture in a little different directiondifferent direction

Fact No. 1 www.willyoujoinus.comFact No. 1 www.willyoujoinus.com

This is the website launched by none This is the website launched by none other than Chevron. For them oil is other than Chevron. For them oil is bread and butter.bread and butter.

Take a closer look at one interesting Take a closer look at one interesting sentencesentence

““The era of easy oil is over”The era of easy oil is over”

Chevron has tons of data you and me Chevron has tons of data you and me don’t have. They know stuff about oil don’t have. They know stuff about oil fields and refinaries that you and me fields and refinaries that you and me don’t know.don’t know.

And they are making an unequivocal And they are making an unequivocal statement “The era of easy oil is over”.statement “The era of easy oil is over”.

Imagine an oil selling company starting Imagine an oil selling company starting a website for oil conservation and a website for oil conservation and making such a direct statement making such a direct statement

Can you imagine McDonalds stressing Can you imagine McDonalds stressing importance of healthy food and importance of healthy food and asking you to eat less burgers?asking you to eat less burgers?

Fact No. 2 – No new refinariesFact No. 2 – No new refinaries

http://news.yahoo.com/s/nm/20051028http://news.yahoo.com/s/nm/20051028/bs_nm/energy_chevron_earns_dc/bs_nm/energy_chevron_earns_dc

““On a conference call, a Chevron On a conference call, a Chevron executive said the company would executive said the company would continue to expand its existing refineries continue to expand its existing refineries but did not feel the need to build a new but did not feel the need to build a new refinery from scratch. The company also refinery from scratch. The company also said it expected to announce the said it expected to announce the expansion of a refinery in Korea soon. “expansion of a refinery in Korea soon. “

Chevron stock is all time high.Chevron stock is all time high.

Their profit is all time highTheir profit is all time high

Motorists are guzzling oil all over the Motorists are guzzling oil all over the world. India and China are pushing world. India and China are pushing demands higher.demands higher.

So what stops them from adding one So what stops them from adding one more refinary?more refinary?

““Worldwide expansion of refinary Worldwide expansion of refinary capabilities” ???capabilities” ???

Yeah, right!!Yeah, right!!

Keep in mind that keeping all other Keep in mind that keeping all other refinaries at same level, expansion in refinaries at same level, expansion in one refinary in South Korea by 2% one refinary in South Korea by 2% does qualify in reports as “expansion does qualify in reports as “expansion of worldwide refinary capabilities”of worldwide refinary capabilities”

If more and more people are coming to If more and more people are coming to buy fruit juice in your shop, people buy fruit juice in your shop, people are ready to buy even if you double are ready to buy even if you double or triple the price,or triple the price,

Then why would you not buy more Then why would you not buy more juicers?juicers?

You can find out your own answersYou can find out your own answers

May be Chevron is out of their mind.May be Chevron is out of their mind.

Let us look at what good ol’ British Let us look at what good ol’ British Petroleum is doing. Petroleum is doing.

Another giant, another factAnother giant, another fact

Fact No. 2 -BP investing $15 BN in Fact No. 2 -BP investing $15 BN in alternative energyalternative energy

British Petroleum has invested British Petroleum has invested whooping $15 BN in alternative whooping $15 BN in alternative energy companies and researchenergy companies and research

BP is second largest corporate investor BP is second largest corporate investor in alternative energy, only after GEin alternative energy, only after GE

Investment by BP in alternative energy Investment by BP in alternative energy actually exceeds their investment in actually exceeds their investment in petroleum explorationpetroleum exploration

BP - $15 BN – Alternative BP - $15 BN – Alternative EnergyEnergy

Why would you invest in somebody Why would you invest in somebody elses business more than you invest elses business more than you invest your own business?your own business?

Why would you invest in education of Why would you invest in education of your neighbor’s kid more than you your neighbor’s kid more than you invest in education of your own kid?invest in education of your own kid?

You decide!You decide!

ConclusionConclusion

Is OIL getting over or not is a small Is OIL getting over or not is a small question.question.

Much larger question is “Can OIL Much larger question is “Can OIL business remain profitable for long business remain profitable for long time or not?”time or not?”

You think it will.You think it will.

But for some strange reason, big oil But for some strange reason, big oil giants think it won’t.giants think it won’t.

While you are being fooled in buying While you are being fooled in buying that bigger-than-battle-tank SUV, Oil that bigger-than-battle-tank SUV, Oil companies are quietly switching their companies are quietly switching their businessesbusinesses

Stone age did not end because the Stone age did not end because the world ran out of stonesworld ran out of stones

As Saudi oil minister once famously As Saudi oil minister once famously saidsaid

““Stone age did not end because the Stone age did not end because the world ran out of stones. Oil age will world ran out of stones. Oil age will not end because the world ran out of not end because the world ran out of oil.”oil.”

Gold rush was not over because Gold rush was not over because California ran out of goldCalifornia ran out of gold

Visit any gold pan making company and they will tell Visit any gold pan making company and they will tell you that California still has more than 80% of gold you that California still has more than 80% of gold in groundin ground

Yes, but that gold is finely mixed in sand, very Yes, but that gold is finely mixed in sand, very difficult to extract.difficult to extract.

If you work one hour extracting that gold, and if you If you work one hour extracting that gold, and if you work one hour in McDonalds, then you will make work one hour in McDonalds, then you will make more money in McDonalds.more money in McDonalds.

But gold rush is definitely over.But gold rush is definitely over.So gold rush was not over because gold was So gold rush was not over because gold was

exhaustedexhaustedGold rush was over because gold extraction did not Gold rush was over because gold extraction did not

remain profitable.remain profitable.

If Oil business is not profitable, no If Oil business is not profitable, no matter whether oil is over or not, you matter whether oil is over or not, you will be kicked to switch to another will be kicked to switch to another fuel, fuel,

Unless you are ready to mine, Unless you are ready to mine, transport, refine and pump your own transport, refine and pump your own oil of course oil of course

Technology will save us Technology will save us

I have to give you a point on this oneI have to give you a point on this one

There might be some cracking There might be some cracking breakthrugh tomorrow, and we might breakthrugh tomorrow, and we might extract oil from rocksextract oil from rocks

But what if we cannot?But what if we cannot?

Commercial limitationsCommercial limitations

Technology has some limitations. Technology has some limitations. Nobody invests unless they smell Nobody invests unless they smell profitprofit

Technology has given up on some Technology has given up on some issues. Nobody invests in fuel issues. Nobody invests in fuel injection systems research, because injection systems research, because any further improvement will be so any further improvement will be so miniscule that it is not attractive miniscule that it is not attractive return on investmentreturn on investment

Physical limitationPhysical limitation

Technology has physical limitationsTechnology has physical limitations

E.g. Companies are digging deeper and E.g. Companies are digging deeper and deeper for oil and it takes more energy deeper for oil and it takes more energy to transport deeper oil to surface.to transport deeper oil to surface.

If oil quality goes down and depth If oil quality goes down and depth increases, then you will spend 1 gallon increases, then you will spend 1 gallon of oil to extract 1 galon of oil. That point of oil to extract 1 galon of oil. That point Oil is no more fuel.Oil is no more fuel.

No technology can change laws of physics. No technology can change laws of physics.

Still if you are believing in technology, Still if you are believing in technology, then I have to say,then I have to say,

Boy, your faith in technology is strongBoy, your faith in technology is strong

Stronger than that of BP and Chevron.Stronger than that of BP and Chevron.

In worst case scenario of oil shock, In worst case scenario of oil shock, have you thought of what will be have you thought of what will be resell value of your new shiny SUV?resell value of your new shiny SUV?

Here are most probable three options.Here are most probable three options.$ Junk $ Junk $$ Junk$$ Junk

$$$ Junk$$$ Junk

Chevron is talking Chevron is talking about “what to do about “what to do next”next”

If you are not sure If you are not sure what “next” means,what “next” means,

Go drive your SUV off Go drive your SUV off the cliff.the cliff.

Trust me, that will be Trust me, that will be less painful, less painful, considering your considering your future.future.

Inspite of extra-ordinary demand, Inspite of extra-ordinary demand, extra-ordinary prices and record extra-ordinary prices and record profits, oil companies are thinking profits, oil companies are thinking that oil business is not going to be that oil business is not going to be profitable in long term.profitable in long term.

Why??????????????????Why??????????????????

Wake up and do your own research.Wake up and do your own research.

That’s all I am sayingThat’s all I am saying