tag:blogger.com,1999:blog-31415271.post6858695205245086591..comments2023-09-22T06:22:50.820-06:00Comments on Ken Chapman: Buffett Not Investing In Oils Sand - Not Yet Anyway!kenchapmanhttp://www.blogger.com/profile/11384045981190810115noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-31415271.post-11081332925521639902008-09-08T12:24:00.000-06:002008-09-08T12:24:00.000-06:00I think you might want to take a look at the Embri...I think you might want to take a look at the Embridge pipeline from Alberta to the West Coast.<BR/><BR/>That's the route of export for tar sands oil to China and the West Coast.<BR/><BR/>Now, tar sands need a lot of natural gas to process, and Canada is at max production. Tar sand expansion needs a new source of energy. Some wild-eyed folks want to build nuclear power plants on top of the tar sands for steam generation... and if you think that's a bit crazy, consider Russia's floating nuclear-powered desalination plants... or don't, it gives one a headache.<BR/><BR/>In any case, the only real source of extra gas for Alberta is Alaska's North Slope (and the Mackenzie valley line, but hey... who will pay for that? Canada?)<BR/><BR/>Warren Buffett's MidAmerican Energy was the original contender for the Alaskan natural gas pipeline in 2006 when Palin came into office.<BR/><BR/>The previous pipeline hit corruption-related snags - it's likely that Stevens and Murkowski were just the tip of iceberg, and MidAmerican backed out over worries about the Buffet-Palin relationship.<BR/><BR/>The letter from MidAmerican's CEO to Palin on their position is here:<BR/><BR/>www.eeo.state.ak.us/agia/PublicApplications/Declined/midamerican_letter.pdf <BR/><BR/>My take is that Buffet is concentrating on distribution, not production, and views the cost-risk production picture as somewhat unfavorable. It's equally possible that the oil majors have production locked up and are not looking to share.<BR/><BR/>The sheer scale of this project means that it will almost certainly run into giant cost overruns.<BR/><BR/>Basically, the current plan is to take North Slope gas, pipeline it to Alberta (transit fees to be collected by ?), use the gas to produce steam to melt the bitumen tar, make heavy crude, and pipeline that to heavy crude refineries in the Midwest and the West Coast, or direct to China to refineries there. Chinese demand is endless - as long as U.S. consumer demand stays high. Madness, isn't it?<BR/><BR/>Crude supplies are drying up, and refineries are tailored to specific grades of crude. Venezuelan supplies are in question.<BR/><BR/>This is a touch-and-go situation on the global oil markets, tight as a drum. Threats of supply interruption send stocks skyrocketing.<BR/><BR/>It's a whole new world. I'm worried that the dinosaurs won't be able to adapt, and will cause a lot of damage on their way down, to tell you the truth.<BR/><BR/>I'm for natural gas, though - but the best option is to take Alaskan North Slope gas, run it by pipeline to Valdez, and from their to LNG tankers and off to Asian and West Coast markets.<BR/><BR/>See Buffet congratulating Palin on becoming Alaska's governor:<BR/>http://www.youtube.com/watch?v=_BGE3cX3ZWQAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-31415271.post-32032207132850978462008-08-25T08:31:00.000-06:002008-08-25T08:31:00.000-06:00Buffett is already invested in ConocoPhillips - no...Buffett is already invested in ConocoPhillips - not an insignificant oil sands player.<BR/><BR/>As for China and the US. The world order is changing. China has a huge trade surplus and caches of foreign reserves - especially US Dollars. China is actually financing the US borrowings to wage the Iraq war.<BR/><BR/>Almost a year ago to the day I did a blog post on this US vulnerability to China. http://ken-chapman.blogspot.com/2007/08/china-is-holding-bush-by-short-and.html<BR/><BR/>As for Alberta and Canada - we are acting like a colonized nation shipping out our unfinished raw material out to the imperialist occupier. The only difference is we have ourselves to blame because we have taken the easy way out of servicing the US market and largely ignore the rest of the world.<BR/><BR/>I'm not surprised by this easy way out appraoch - just dismayed it continues. This is not an anti-American stance at all. It is a multi-market approach I am advocating for Canada.kenchapmanhttps://www.blogger.com/profile/11384045981190810115noreply@blogger.comtag:blogger.com,1999:blog-31415271.post-26780981678013260222008-08-24T22:03:00.000-06:002008-08-24T22:03:00.000-06:00Buffett will probably invest in some company that ...Buffett will probably invest in some company that provides goods and services to the tarsands rather than investing in a tarsands compnay directly.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-31415271.post-32537501093593637322008-08-24T21:04:00.000-06:002008-08-24T21:04:00.000-06:00Ken,I guess one reason I've been watching the Chin...Ken,<BR/><BR/>I guess one reason I've been watching the China-Canada relationship is because of the potential for the US to go belly-up and not be in the mood to buy any oil (although might be in the mood for taking it, if the taking's good...). If the US isn't in the mood to buy it, then at least we could sell it to China if our relationship were better. If the US is in the mood for taking it, I guess China probably wouldn't stand in their way, hmph.<BR/><BR/>What do you make of the US economic situation, speculation that lenders will stop funding the US, and that the US is bound to go into inflationary recession and possibly worse?<BR/><BR/>Do you think it's possible, and if so, where will that put us?Anonymousnoreply@blogger.com