This is what happens when you import 100% of your oil!

Financial Times (March 25) ~ "South Korea's soldiers will be asked to make do with only one bath a week while its air force pilots will have to do more training on computers instead of real fighters as record oil prices force the country to slash fuel usage." This reminds me of the recommendation to share your showers at home from back in the 1970's.

http://www.ft.com/cms/s/0/ed98e766-fa0c-11dc-9b7c-000077b07658.html?nclick_check=1

Is this the upside to Global Warming?

March 27 (Bloomberg) ~ "In Greenland, locals hunt reindeer for food and use dog sleds to traverse the ice sheet. Soon they may be working on offshore rigs and counting their money." Even if global warming cooperates it will be more than a decade before any oil would flow from Greenland. So don't start thinking $2 gasoline just yet.

http://www.bloomberg.com/apps/news?pid=20601207&sid=aeu5ZbUSdOkc&refer=energy

Remember it is not just about oil.

Falls Church News Press (March 27) ~ "Thermal power production across the globe is struggling to cope with high prices and shortages of coal, fuel oil and diesel. Several poorer countries have shut down the bulk of their generation capacity as they are no longer able to pay the fuel bills to keep going." Tom Whipple takes a good look at some of the problems facing the world's electrical needs. For some it appears the fossil fuel age may be nearing an end.

http://www.fcnp.com/national_commentary/the_peak_oil_crisis_load_shedding_20080326.html

Link to this week's Master Resource Report (PDF) 2008-03-28

Questions or comments? E-mail me at jim.hansen@kmsfinancial.com or call 206-363-7868 toll free 888-216-4800

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

What exactly are emergency reserves for?

WASHINGTON, March 18 (Reuters) – "Releasing emergency supplies from the U.S. Northeast Heating Oil Reserve would have a short-term effect on lowering record retail heating oil prices, the head of the federal Energy Information Administration said Tuesday." Using "Heating Oil Reserves" to control prices seems the wrong approach. Should they be used to provide emergency supplies when there is an "Emergency" related to supply, not just high prices. http://www.reuters.com/article/bondsNews/idUSN1821841220080318?rpc=401&

Last week it was Northwest Airlines, this week it is United and others.

CHICAGO, March 18 (Reuters) - UAL Corp parent of United Airlines, will shrink its fleet by up to 4 percent this year to combat the skyrocketing cost of jet fuel, the chief executive of the No. 2 U.S. carrier said on Tuesday." There is more on fuel's impact on trucking and airlines in this week's report. Shrinkage and consolidation are two of the options facing the entire transportation sector. The question is will that help.

http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyid=159082+18-Mar-2008+RTRS&WTmodLoc=BizArt-L1-CompanyNews-4

"The U.S. Is Poised to Hit a New Oil Gusher."

Kiplinger, March 17 - "A new black gold rush is under way, this time in North Dakota. The potential payoff is huge -- up to 100 billion barrels of oil. That's twice the size of Alaska's reserves and potentially enough to meet all U.S. oil needs for two decades." Come back to this after reading what Chris Skrebowski has to say about reserves versus flow rates in today's report. Could they really produce over 20 million barrels per day for 20 years? That is more than twice the daily production of Saudi Arabia and twice the all time production rate for the US. It also assumes no growth in US demand over those 20 years.

http://www.kiplinger.com/businessresource/forecast/archive/The_U.S._Poised_to_hit_New_Oil_Gusher_080317.html

Link to this week's Master Resource Report (PDF) 2008-03-21

Questions or comments? E-mail me at jim.hansen@kmsfinancial.com or call 206-363-7868 toll free 888-216-4800

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

There is more than one way to be addicted to oil.

Financial Times 2008-03-10 ~ "Many oil-producing countries cannot afford to let the price of oil drop as the revenue they require to assure macroeconomic stability at home continues to increase, a new report by PFC Energy, a leading oil consultancy, reveals, writes Sheila McNulty in Houston." This short piece in the Financial Times makes it clear that the US is not alone in its addiction to oil. Our suppliers are just as hooked. One other point, I think that if you only subscribe to one newspaper it should be the Financial Times. http://www.ft.com/cms/s/0/605387a4-ee44-11dc-a5c1-0000779fd2ac.html

Northwest Airlines to Risk Manage Fuel Cost With SuperDerivatives

"Rising fuel costs continue to be one of the biggest challenges to Northwest Airlines and the airlines industry as a whole. We searched for a derivatives platform that would enable us to evaluate various hedging strategies and option valuation for FASB 133 accounting," said David Zanussi, Managing Director of Fuel Management, Northwest Airlines." I sure hope this goes better for them than the derivatives worked out in the subprime mortgage market. Somehow I don't think it will. More on airline fuel costs in this week's report on page 2.

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080311005871&newsLang=en

Shell Oil "A National Dialogue on Energy Security:"

Just because they are a big international oil company doesn't mean what they have to say isn't worth listening to. If you take the time to read this report from Shell do it within the context of a much broader view of energy than just petroleum. Remember they do have an agenda. (20 page PDF)

"The Myth: We're running out of oil. The Reality: Oil resources are out there, should we choose to develop them." True, but remember the flow rate will not be the same!

"The Myth: Alternative fuels are a "magic bullet." The Reality: We believe in alternative fuels – but not in magic." The scale of our petroleum use is huge; petroleum will be with us for decades to come.

http://www-static.shell.com/static/us-en/downloads/energy_security/pdf/shell_final_report.pdf

Link to this week's Master Resource Report (PDF) 2008-03-14

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Questions or comments? E-mail me at jim.hansen@kmsfinancial.com or call 206-363-7868 toll free 888-216-4800

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.

The hunt for a scapegoat continues.

Financial Times 2008-03-05 ~ "No question the high price of gasoline has hurt economic growth here," Mr Bush said in his most outspoken criticism of the oil cartel. The US president warned that for Opec it was a "mistake to have its biggest customer's economy slow down . . . as a result of high energy prices". The fundamental underlying premise is that there is plenty of production capacity and they are just holding out on us. If that premise is wrong and we have not taken steps to deal with it we are all in real trouble.

http://www.ft.com/cms/s/0/d0ece0be-ea57-11dc-b3c9-0000779fd2ac.html

The doubling of the price of coal worldwide will have more of a direct impact on economies outside the US than oil has. Remember China derives 80% of primary energy from coal.

The Guardian 2008-03-05 ~ "Coal, for so long the Cinderella of fossil fuels, is suddenly not just in demand but in desperately short supply. The world's biggest producers and exporters are struggling, and the price of imports to Europe has doubled to almost $140 (£70.5) per tonne over the past year" While everyone has been focused on oil he big problems may come from coal and natural gas. It is not just about oil it is about the Master Resource "Energy".

http://www.guardian.co.uk/environment/2008/mar/05/fossilfuels.energy

"NAFTA's legacy: the worst agreement we ever signed."

globeandmail.com 2008-03-05 ~ "Canada now exports 63 per cent of the oil it produces and 56 per cent of its natural gas to the U.S. And because of NAFTA's proportionality clause, Canada is legally obliged to continue exporting the same proportion of our oil and gas forever even if we face a shortage." Take a minute to read this article and consider your opinion if you were Canadian. The NAFTA treat is probably doomed in its current form, when maybe the only question.

http://www.theglobeandmail.com/servlet/story/RTGAM.20080305.wcomment0306/BNStory/Front/home

Link to this week's Master Resource Report (PDF) 2008-03-07

Disclaimer

This publication is dedicated to the education of readers and is an information service only. While the editor is licensed to offer investments and investment advice, the information provided herein is not to be construed as an offer to buy or sell securities of any kind, is the opinion of the author and not endorsed by KMS Financial Services, Inc. It is possible at this or some subsequent date, the editor and/or affiliated parties may own, buy or sell securities discussed in this newsletter, or based upon information provided in the newsletter, or contrary to information provided in this newsletter. The information provided has been obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. We make every effort to provide timely information, but cannot guarantee specific delivery times due to factors beyond our control.