ANWR and Offshore Drilling this week.

Energy will hit property values "…expenditures in the Inland Empire have increased to $1,322 a month from $534 a month in 2003."

Wall Street Journal (June 25^th) ~ "Land that was purchased with expanding metro areas in mind has already been hard hit in value," Mr. Sood says. "Sustained higher gas prices could render it effectively worthless." This is just one of the many consequences the U.S. will face with Peak Oil & Gas.

http://online.wsj.com/article/SB121435790491002123.html (WSJ subscription required)

The World Economy needs cheap oil, now there is a thought.

Bloomberg (June 25^th) ~ "The global economy would collapse if oil hit $200 a barrel, said the top energy analyst at Germany's largest bank." Globalization would certainly be in trouble for sure.

http://www.bloomberg.com/apps/news?pid=20601207&sid=am42p9xBTXh4&refer=energy

What if Saudi Arabia goes the way of Nigeria?

Washingtonpost.com (June 25^th) ~ "RIYADH, Saudi Arabia -- Saudi authorities arrested 701 suspected al-Qaida-linked militants in 2008, some of whom planned a car bomb attack on an oil installation, the Interior Ministry said Wednesday." Oil would go through the $200 level in a day.

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/25/AR2008062500530.html

"Gas could fall to $2 if Congress acts, analysts say"

Marketwatch (June 23^rd) ~ "The price of retail gasoline could fall by half, to around $2 a gallon, within 30 days of passage of a law to limit speculation in energy-futures markets, four energy analysts told Congress on Monday." Wow, if it is that easy just do it. I was wondering though; what would happen to demand at $2/gallon. Of course it would explode and the world does not currently have any spare capacity to meet that demand. I guess prices would only up to $2.10 if there is no speculation, yea right!

http://www.marketwatch.com/news/story/gas-could-fall-2-if/story.aspx?guid={2673C102-68E0-41D9-9C9A-10EE2E723948}&dist=msr_13

For an alternative view on speculation check out this article in the Financial Times;

http://www.ft.com/cms/s/0/afe0e50c-4185-11dd-9661-0000779fd2ac.html?nclick_check=1

Link to this week's Master Resource Report 2008-06-27

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.

Page one of this report has a must see graph on future fossil fuel (not just oil) production. On page four there are links to a couple good videos on the current petroleum situation.

With all the noise about offshore drilling here are some Inconvenient Facts.

The Oil Drum (June 12^th) ~ "The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030." [original source – EIA 2007] Have not heard this brought up in the news surrounding offshore drilling. So will offshore drilling provide the impossible goal of "Energy Independence"?

Link to TheOilDrum.com post http://www.theoildrum.com/node/4174

Link to the IEA report http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

Fade to black: Is this the end of oil?

The Independent (June 12^th) ~ "And as prices have kept on breaking records, an ever-growing worry looms in the background, the elephant in the room of the oil price rise: what if they can't produce any more? What if, this time, the oil taps really are running dry?" When you see the graphs on the first page this week it will be very hard to ignore that elephant any longer. That is the problem with being aware of Peak Oil & Gas, you know where the elephant is.

http://www.independent.co.uk/environment/green-living/fade-to-black-is-this-the-end-of-oil-845092.html

"Americans drive 1.4 billion fewer highway miles."

For those who thought there was no downside risk to driving less -Well Guess What?

CNN.com (June 12^th) ~ " Peters expressed concern that the cutbacks have resulted in the collection of fewer taxes on gasoline. Such taxes are funneled to the federal Highway Trust Fund, which gets 18.4 cents per gallon from gasoline and 24.4 cents per gallon from diesel fuel." To quote Bryn Davidson from the Dynamic Cities Project "We may be at Peak Roads." It also may mean the beginnings of peak chuck holes and more crumbling highway infrastructure. Like I queried last week, do your city and state officials get it?

http://www.cnn.com/2008/US/06/18/driving.cutbacks/index.html

I don't want to be an I told you so, but –

"China to Raise Fuel Prices By 17%-18% in Surprise Move."

Wall Street Journal (June 19^th) ~ "BEIJING -- China raised government-set domestic prices for fuel and electricity, responding to increasing shortages at home and growing global criticism that its energy subsidies are fueling global price increases." This will have implications for the global oil market and the Chinese economy. The last major subsidizers to take this action will be the OPEC countries of the Middle East.

http://online.wsj.com/article/SB121388580377088575.html?mod=hpp_us_whats_news (WSJ subscription required)

Link to this week's Master Resource Report 2008-06-20

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.

On June 11^th BP released the BP Statistical Review of World Energy 2008.

Financial Times (June 11^th) Comments by Tony Hayward CEO of BP ~ "Global energy demand growth in 2007 was above average for the fifth year in a row, driven by the fastest period of economic growth since the early 1970s….Yet energy supply has struggled to respond. Production by the Organisation of the Petroleum Exporting Countries fell by 350,000 barrels of oil a day last year." Simply put these conditions plus declining production in OECD countries is why oil is now well over $100/barrel. Over the next few weeks the Master Resource Report and others will be looking carefully at the BP Statistical Review.

Hayward Comments Link - http://www.ft.com/cms/s/0/1384647e-3751-11dd-bc1c-0000779fd2ac.html

BP Statistical Review Link - http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622

This is a more important reason for alternative energy than the price of gasoline for your car!

Financial Times (June 11^th) ~ "You have to ask yourself: Can we live in the future without things like fertilisers, plastics and certain types of polymers?...We do not currently have alternatives for these products … However, we do have alternatives for energy production." The world can no longer justify using natural gas to generate electricity or produce oil from tar sands. It is far too precious for that. Don't believe me? Consider your life without just one of those products made exclusively from natural gas – fertilizer to grow food!!!

http://www.ft.com/cms/s/0/2517cb0e-3751-11dd-bc1c-0000779fd2ac.html

How vulnerable to the risks of Peak Oil is your city? Cities in Oklahoma recently found out.

CNNMoney (June 12^th) ~ Oklahoma City "…ranked last among 50 U.S. cities in a recent study on areas best able to cope with high oil prices." "High gas prices are also causing an increase in demand for public transport in neighboring Tulsa, Okla. Tulsa ranked second to last in the Common Cause study." "You've got people coming out of the woodwork, screaming for more bus service. We get calls and emails daily…" The people who are now screaming about bus service were screaming about what a waste public transportation was in the past. More on page one of the report this week.

http://money.cnn.com/2008/06/12/news/economy/cities_oil/index.htm?cnn=yes

Transportation and the future.

ASPO-USA (June 9^th) ~ "In transportation, at the risk of a slight over-simplification, our transportation planners and engineers, supported by special interests and too much of the public, see the problem as congestion relief and better mobility for the car." Until the reality that the problem to be faced is constrained liquid fuel supplies and not congestion will there be any solution.

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=391&Itemid=91

Link to this week's Master Resource Report 2008-06-13

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.

"Over the last three years, every one dollar rise in world oil prices has fed directly into a 1% rise in transport costs." What does this mean for world trade? The answer will be a surprise on page two of this week's report.

Brazilian Oil Finds May Cost $240 Billion to Develop.

Bloomberg (June 5^th) ~ "Brazil's oil discoveries, including the Western Hemisphere's largest in three decades, may cost $100 billion more to develop than the industry's most costly field"-- " The total exceeds the $136 billion estimate for Kazakhstan's Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years." This is why the petroleum world of Peak Oil & Gas will not be the same as it has been for the last 150 years. These are not the flat plains of Texas, Oklahoma or even the UK North Sea; the production flow rates will not be the same.

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

The only way intermittent power sources can really help is with huge improvements to the U.S. power grid. Example – Wind Power in Texas.

The Independent (June 3^rd) ~ "Thousands of wind turbines in the US are sitting idle or failing to meet their full generating capacity because of a shortage of power lines able to transmit their electricity to the rest of the grid." Without the necessary infrastructure all the cool new wiz bang technology of alternative energy will not fulfill its potential.

http://www.independent.co.uk/news/business/news/texas-wind-farms-choked-off-from-grid-due-to-insufficient-power-lines-838979.html

Not every country is cutting subsidies.

Bloomberg (June 5^th) ~ "Chile's trucking companies will end a three-day strike over rising fuel costs today… Truckers will return to work at 8 a.m. local time after the government agreed to cut a tax on diesel for them by 80 percent." Next will come shortages and then what will the government do? They just stepped on the Peak Oil treadmill with no plan to get off.

http://www.bloomberg.com/apps/news?pid=20601207&sid=at9FLslSMAtQ&refer=energy

Net Exports and Mexico -- a never ending tale of decline.

Reuters (June 4^th) ~ "Pemex Chief Executive Jesus Reyes Heroles said the state-run company's oil exports were headed for an average of 1.40 million to 1.45 million barrels per day over 2008, around 15 percent below a goal set in Mexico's 2008 budget of 1.683 million bpd." See more on page of report.

http://www.reuters.com/article/marketsNews/idUSN0443990520080605

Link to this week's Master Resource Report 2008-06-06

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.