In this week's report:

Mexico, a crisis is brewing south of our border.

Electric vehicles or biofuel vehicles?

Even Southwest Airlines is feeling the pinch.

This is a clear example why everyone needs to understand Peak Oil.

Seattle Times (Aug. 28^th) ~ "Some 30 communities in Illinois are fighting the acquisition of the Elgin, Joliet & Eastern Railway by Canadian National Railway (CNI) because of the increased traffic they expect in their backyards." The shift from trucks to rail for most of our nation's freight is critical to mitigate the impacts of Peak Oil. This is where the population needs both understanding and leadership.

http://seattletimes.nwsource.com/text/2008143376_industryspotlight28.html

The World's number 5 coal producer is setting limits on exports.

Reuters (Aug. 26^th) ~ "Russian coal exporters were told by Deputy Prime Minister Sergei Ivanov to prioritise domestic coal supply for the balance of this year over exports at a meeting held on August 7, coal industry sources said." It is not just oil that has a NET EXPORT problem. Global coal supplies appear set to remain tight and prices high.

http://uk.reuters.com/article/oilRpt/idUKLQ25443320080826

Diesel – Why is it so expensive?

Times of India ~ "The bulk users are the industries as they are heavily dependent on diesel-run generators for their power needs. With load-shedding on, industries and corporate offices are hoarding diesel in a big way. The demand for diesel is about 1,800 kilolitres per day in the city. In the last four days, the diesel consumption has gone up by 40% and the fuel supplying agencies are not able to keep pace with the demand." The diesel problem is really a coal problem for electricity generation. In addition maybe the growth story for India needs another look. This diesel shortage is in the high tech city of Bangalore. Currently freight trucking rates are expected to jump 40% due to the diesel shortages.

http://timesofindia.indiatimes.com/Cities/Power_cuts_fuel_shortage_of_diesel/articleshow/3266873.cms

Link to this week's Master Resource Report 2008-08-29

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:

How much water does it take to produce 1 kg. of beef?

Where are Google and Paul Allen putting their money?

Liquid Natural Gas (LNG) will never be cheap.

Must read in the Financial Times "Foreign fields".

Financial Times (Aug. 20^th) ~ "Alarmed by exporting countries' trade restrictions - such as India's curbs on exports of rice, Ukraine's halt to wheat shipments and Argentina's imposition of heavy taxes on overseas sales of soya - importing countries have realised that their dependence on the international food market makes them vulnerable not only to an abrupt surge in prices but, more crucially, to an interruption in supplies." This is a very good analysis of the situation facing the Gulf States as their populations and economies expand. Given the water inputs discussed on page three of this week's report and the energy requirements of desalination this may be the only option for the Middle East.

http://www.ft.com/cms/s/0/c2bdf0dc-6e50-11dd-b5df-0000779fd18c.html

Mexico's exports decline 2.7% in July

Reuters (Aug. 21^st) ~ "Mexico's crude oil exports fell in July from the previous month as production decreased, state-owned energy monopoly Pemex said on Thursday." Remember all that matters is NET EXPORTS not production. Production was only down 2%.

http://uk.reuters.com/article/oilRpt/idUKN2145651420080821

World Geothermal Power Generation Nearing Eruption

Earth Policy Institute (Aug 19^th) ~ "With fossil fuel prices escalating and countries searching for ways to reduce oil dependence and greenhouse gas emissions, capturing the earth's heat for power generation is garnering new attention." Remember the key is geothermal can provide base load. This will be the key to replacing fossil fuels.

http://www.earth-policy.org/Updates/2008/Update74.htm

Link to this week's Master Resource Report 2008-08-22

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.

Alternative energy projects depend on electric infrastructure improvements.

Seattle Times/AP (Aug. 14^th) ~ "Yet infrastructure projects take a lot of time. AEP announced a plan for a transmission line in West Virginia and Virginia in 1990 that was not finished until last year, due mostly to the regulatory process." All the alternative generation in the world worthless if it cannot be transported to where it is needed. This is why it is so important for policy makers and the energy industry to understand the energy resource constraints the country faces. These problems cannot be managed on an adhoc crisis system.

http://seattletimes.nwsource.com/html/businesstechnology/2008112567_blackout14.html

Oil from the Outer Continental Shelf Moratoria Areas–A Gusher?

ASPO-USA (Aug. 11^th) ~ "We should keep in mind that the term "undiscovered technically recoverable oil resources" means that this oil has not been discovered yet." Since offshore drilling is such a hot political topic right now and both presidential candidates have taken positions on it I suggest reading this commentary on the Association for the Study of Peak Oil & Gas – USA (ASPO-USA) web site.

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=427&Itemid=91

The peak oil crisis: The Washington Post meets peak oil lite.

Falls Church News-Press (Aug. 13^th) ~ "For those who aren't ready to buy into the concept of world oil production going into decline in the next few years, there is a less worrisome subset making the rounds known as "peak oil lite"." Peak Oil Lite is a benign way to begin understanding the crisis that stands before the world.

http://www.energybulletin.net/node/46215

Link to this week's Master Resource Report 2008-08-15

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.

Why don't we hear about speculators driving down oil prices???

Bloomberg (Aug. 6^th) ~ "Crude oil futures fell as low as $117.11 a barrel on speculation a slowing global economy will reduce demand, and after the dollar hit a seven-week high." Wait; shouldn't these speculators be investigated for this? I guess not, $117/barrel oil is still $11/barrel over the average price for 2008 so far. More on this in this week's report.

http://www.bloomberg.com/apps/news?pid=20601207&sid=ayKVqSJFbU2M&refer=energy

"Major discovery from MIT primed to unleash solar revolution"

ABC News (Aug. 2^nd) ~ "Researchers have made a major advance in inorganic chemistry that could lead to a cheap way to store energy from the sun. In so doing, they have solved one of the key problems in making solar energy a dominant source of electricity." Whenever you see this kind of bold headline your skeptic sensors should kick in. This report from MIT was all over the news last week. US News & World Report even attributed the drop in oil below $120 to the news (and I thought it was speculators?). "Oil slipped below $120 at one point today and now overall is down nearly 20 percent from its July high of near $150…..... the drop had everything to do with reports this weekend that MIT chemist Daniel Nocera seems to have discovered a cheap—by a factor of 1,000—and easy way to separate hydrogen from water." For some interesting thoughts checkout The Oil Drum link below.

The MIT page: http://web.mit.edu/newsoffice/2008/oxygen-0731.html

ABC News link: http://abcnews.go.com/Technology/AheadoftheCurve/story?id=5498564&page=1

US News link: http://www.usnews.com/blogs/capital-commerce/2008/08/04/why-oil-really-fell-today--and-could-keep-falling.html

The Oil Drum: http://www.theoildrum.com/node/4378#more

Link to this week's Master Resource Report 2008-08-08

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.

Why don't we hear about speculators driving down oil prices???

Bloomberg (Aug. 6^th) ~ "Crude oil futures fell as low as $117.11 a barrel on speculation a slowing global economy will reduce demand, and after the dollar hit a seven-week high." Wait; shouldn't these speculators be investigated for this? I guess not, $117/barrel oil is still $11/barrel over the average price for 2008 so far. More on this in this week's report.

http://www.bloomberg.com/apps/news?pid=20601207&sid=ayKVqSJFbU2M&refer=energy

"Major discovery from MIT primed to unleash solar revolution"

ABC News (Aug. 2^nd) ~ "Researchers have made a major advance in inorganic chemistry that could lead to a cheap way to store energy from the sun. In so doing, they have solved one of the key problems in making solar energy a dominant source of electricity." Whenever you see this kind of bold headline your skeptic sensors should kick in. This report from MIT was all over the news last week. US News & World Report even attributed the drop in oil below $120 to the news (and I thought it was speculators?). "Oil slipped below $120 at one point today and now overall is down nearly 20 percent from its July high of near $150…..... the drop had everything to do with reports this weekend that MIT chemist Daniel Nocera seems to have discovered a cheap—by a factor of 1,000—and easy way to separate hydrogen from water." For some interesting thoughts checkout The Oil Drum link below.

The MIT page: http://web.mit.edu/newsoffice/2008/oxygen-0731.html

ABC News link: http://abcnews.go.com/Technology/AheadoftheCurve/story?id=5498564&page=1

US News link: http://www.usnews.com/blogs/capital-commerce/2008/08/04/why-oil-really-fell-today--and-could-keep-falling.html

The Oil Drum: http://www.theoildrum.com/node/4378#more

Link to this week's Master Resource Report 2008-08-08

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.

"Oil has dropped 17 percent since its July record…"

Bloomberg (July 29^th) ~ "Crude oil fell to the lowest in 12 weeks as the U.S. dollar strengthened to a one-month high against the euro and on signs gasoline demand may extend declines.." Wow, but the headline didn't mention it is still 21% above the price on January 1^st. Suddenly $120/barrel oil is cheap? $4/gallon gas is a bargain? Check the charts in this week's report to see if this is really the trend.

http://www.bloomberg.com/apps/news?pid=20601072&sid=aaoOx6PwQVj4&refer=energy

Mexico's troubles continue to mount.

Bloomberg (July 21^st) ~ "Petroleos Mexicanos, the state-owned energy company, said oil output fell 11 percent in June from a year earlier as new wells failed to keep pace with a four-year decline in the aging Cantarell field, the nation's largest." The really bad news was that Cantarell production declined 15% year-over-year, the worst rate in 12 years.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aLLrhZOGOD_M&refer=home

Energy Poverty is a real possibility!! "British Gas owner Centrica says it is raising gas prices by a record 35% and electricity prices by 9%."

BBC News (July 30^th) ~ "The move will heighten concern about rising levels of fuel poverty - defined as when a household spends more than 10% of its income on fuel bills." This doesn't include transportation fuel costs which could be another 10% or more. What is the "Energy Poverty" level in the U.S.?

http://news.bbc.co.uk/1/hi/business/7533389.stm

In the Coal Olympics China gets the consumption Gold Medal.

Reuters (July 30^th) ~ "China is facing its worst summer power shortages in four years, because generators cannot source coal supplies or refuse to pay soaring fuel prices while they have to sell their power at unprofitable state-set tariffs." The Chinese government is between that famous rock and a hard place. While it has options, none is going to be easy or necessarily successful.

http://uk.reuters.com/article/oilRpt/idUKPEK9613820080730?sp=true

Link to this week's Master Resource Report 2008-08-01

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.