In this week's report:

The U.S. just finished a ten year test of "Drill Baby Drill".

The weather forecast may determine if your lights stay on.

China's Demand vs Depletion.

Ever heard of neodymium?

Why doesn't a 34% decline get more attention?

Reuters (April 21^st) "Pemex said Cantarell produced 787,000 bpd in the first three months of 2009, down 34 percent from the same period in 2008 when the field yielded 1.195 million bpd." Cantarell has historically accounted for nearly 100% of the exported volume of oil for Pemex. Does it have to go to zero before anyone gets concerned?

Even though Mexico's oil production was down 7.8% in the first quarter of 2009 compared to the first quarter of 2008 net exports are down even more. According to the Reuters report "The drop in oil production cut oil exports by 14.7 percent to 1.279 million bpd. Mexico exported 1.499 million bpd in the first quarter of 2008, according to government data." Pay attention to net exports, they are all that matters to both Mexico and the U.S.

http://in.reuters.com/article/oilRpt/idINN2148560120090421

Link to this week's Master Resource Report 2009-04-24

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.

In this week's report:

Oil Discoveries and Oil Depletion.

Just how ignorant are Americans on energy?

How many ExxonMobil's would it take to supply U.S. crude demand?

More on water and a must view video.

Javier Blas in the Financial Times

Financial Times (April 14^th) "The International Energy Agency, the western countries' oil watchdog, estimates that spending on exploration and production of oil this year is likely to drop by 20 per cent, double the initial forecast. "Non-Opec project cancellations and slippage out of the 2009-2010 start-up horizon alone stand at 1m barrels a day or more," it says, adding that supply losses could be even bigger as oil companies curtail maintenance in mature fields in the key regions of North America, the North Sea and Russia."

The surprise for the markets will not only be as Javier Blas indicates "that when the economy starts to recover next year it will discover that supply is falling, pushing prices sharply higher" but it will also be the severity and chronic nature of the decline. The discussion of the depletion on page one of this week's report combined with Javier's comments means it could be much worse than even the futures markets believe.

http://www.ft.com/cms/s/0/a2d03e0c-288a-11de-8dbf-00144feabdc0.html?nclick_check=1

(The Financial Times is my number one read each day. If you only have time for one this is it.)

Biofuels – There is much more to it than just CO₂

The Economist (April 11^th) "The ICSU report concludes that, so far, the production of biofuels has aggravated rather than ameliorated global warming. In particular, it supports some controversial findings published in 2007 by Paul Crutzen of the Max Planck Institute for Chemistry in Mainz, Germany. Dr Crutzen concluded that most analyses had underestimated the importance to global warming of a gas called nitrous oxide (N2O) by a factor of between three and five. The amount of this gas released by farming biofuel crops such as maize and rape probably negates by itself any advantage offered by reduced emissions of CO2." Keep this in mind the next time you spread all that fertilizer on your lawn to keep it looking green. You may have just canceled out some of that savings from driving that shining new hybrid SUV. Note: This was covered in the Dec. 21, 2007 issue of this report.

http://www.economist.com/science/displaystory.cfm?story_id=13437705

Trade those Dollars for some real stuff.

New York Times (April 15^th) "Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes." Interesting idea, trade all that paper for natural resources. (Thanks Scott for the link)

http://www.nytimes.com/2009/04/16/world/16chinaloan.html?_r=2&hp

Link to this week's Master Resource Report 2009-04-17

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.

In this week's report:

Was it subprime, hedge funds or an energy spike that pushed the world to the brink?

Mass Market Air Travel and Boeing losing money on 747's?

Lithium in Bolivia and national security?

Flying Car?

Energy Secretary Steven Chu at the 2009 EIA Energy Conference

"I was quite looking forward to hearing from Energy Secretary Steven Chu, so I grabbed a seat up front. Chu started off by saying the DOE is the biggest source of science funding within the government, and that science and technology absolutely must solve the energy issue. The major thrust of his speech was that we must rein in carbon emissions to avoid a climate catastrophe, but he primarily focused on electricity. Chu correctly noted that imported oil has become a huge drain on the economy and that recessions typically follow oil price spikes, but there was otherwise scarce mention of liquid fuels."

Robert Rapier attended the Conference and posted the above comment as part of his report on his R-Squared Energy Blog. Robert is a very bright guy so his comments are worth paying close attention to. He references others who attended in his report this week, each of whom can contribute to understanding where our current Energy Secretary sees the issues.

http://i-r-squared.blogspot.com/

I also recommend taking a look at Dave Cohen's comments on the ASPO-USA web page concerning Secretary Chu's policy positions.

Steven Chu's Energy Miscalculations

http://www.aspousa.org/index.php/2009/03/steven-chus-energy-miscalculations/

The Secretary of Synthetic Biology

http://www.aspousa.org/index.php/2009/03/the-secretary-of-synthetic-biology/

Ad Hoc – Crisis Management will not work in the Peak Oil world that is ahead.

The Sydney Morning Herald (April 10) "The state of play in the oil industry is unsustainable and a critical situation will be reached unless concerted proactive action is taken to address the coming crisis. Unfortunately, if history is any guide, actions will only come once the crisis is upon us." The fact the world will need all the liquid fuel we can get to build out the replacement infrastructure for the declining liquid fuels is a classic catch 22. The sooner policy makers come to grips with this simple reality the better.

http://business.smh.com.au/business/enjoy-the-cheap-petrol-while-it-lasts-20090409-a26l.html?page=-1

Link to this week's Master Resource Report 2009-04-10

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.

In this week's report:

Canadian Tar Sands.

U.S. gasoline consumption.

Oil prices jump 73%

Japan converts from Steel to Lettuce.

"World oil demand this year will average 84.4 million barrels a day, Tanaka said,".

Bloomberg – (April 2, 2009) "The decrease in demand projected for this year is the steepest decline since the 1970s, Tanaka said. The latest IEA report shows a 1.5 percent decline. "It is quite obvious that this economic downturn is one of the worst in 100 years" World demand declines by only 1.5% during the worst economic downturn in 100 years? That should be a clue that the world depends on oil more than anyone seems to understand.

http://www.bloomberg.com/apps/news?pid=20601072&sid=aoX49J3dkqQU&refer=energy

Their guess is as good as any ones.

UPI – (April 3, 2009) "Information from the British Oil Movement tanker tracking company shows exports from the Organization of Petroleum Exporting Countries could fall to 22.15 million barrels per day in the four-week period ending April 18. That is a decline of 960,000 bpd compared with the previous four-week period, the Platts news service reports." The really important point of these reports may not be the volume of oil. The real issue is no one really knows. It is a guess based on such accurate techniques as spies sitting with binoculars looking at tankers leaving ports estimating their loads based on how they ride in the water. In the case of Oil Movements it is based on activity in the spot tanker market. That is right the actual flow of the world's most important traded commodity (water isn't traded) is based spot market estimates and best guesses. Comforting isn't it.

http://www.upi.com/Energy_Resources/2009/04/03/OPEC_export_forecast_down_nearly_1B_bpd/UPI-49071238767856/

Link to this week's Master Resource Report 2009-04-03

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.