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beigledog, with the size of my watch lists, I beat myself up everyday on "opportunities lost", wish you wouldn't bring it up! LOL!
BIPH should dump BSX, too much baggage, IMO.
Boston Sci receives FDA warning
By Val Brickates Kennedy, MarketWatch
BOSTON (MarketWatch) -- The U.S. Food and Drug Administration has warned Boston Scientific it that its Quincy, Mass.-based shipping facility has been found to have serious quality-control problems.
In a letter dated Aug. 10, the FDA said that a recent inspection of the plant had revealed "serious regulatory problems" involving distribution of the company's implantable Vaxcel Low Profile Infusion Ports, Taxus drug-coated coronary stents, and Symmetry balloon dilatation catheters.
The agency, which posted the letter on its Web site Tuesday, said it had conducted the inspection from March 28 through May 20.
In particular, regulators said that Boston Scientific (BSX: news, chart, profile) had distributed batches of the products in question to hospitals despite the shipments having been put on hold due to suspected defects.
Boston Scientific was not immediately available for comment.
The Aug. 10 letter was in response to earlier correspondence with Boston Scientific over the matter, in which the company stated it was committed to improving its quality-control system at the plant. The FDA's letter went on to criticize the company for not providing details or evidence on how it plans to institute change.
"You must promptly initiate permanent corrective and preventive action on your quality system," the FDA wrote in its letter.
"You should know that these serious violations of the law may result in FDA taking regulatory action without further notice to you," the agency added. "These actions include, but are not limited to, seizing your product inventory, obtaining a court injunction against further marketing of the product or assessing civil money penalties."
Shares of Boston Scientific fell 4% to $26.04 in midday trade.
Analysts were mixed on Tuesday as to the gravity of the situation.
"While these regulatory issues are unfortunate, Boston Scientific has had a relatively good track record when it comes to quality control, even in the context of last summer's Taxus recalls," Morgan Stanley analysts wrote in a note Tuesday. The group has an equal-weight rating on the stock.
"Overall, we do not view the issues contained in the warning letter as having a material financial impact on the company over the next three to six months unless Boston Scientific fails to respond appropriately to the FDA's concerns," the Morgan Stanley analysts added.
Analysts at RBC Capital Markets, who have an outperform rating on the stock, agreed. "We do not think the warning letter suggests that Boston Scientific is plagued by any intractable regulatory or quality-assurance problems," they wrote, pointing out that all medical-device companies receive such letters from time to time.
KeyBanc Capital Markets analyst Robert Goldman was more wary.
"While warning letters are commonplace, a two-month inspection is rather long, in our opinion, and does suggest FDA concerns," said Goldman, who has a hold rating on the stock. "We need to speak with Boston Scientific to better gauge this situation."
Looks like the boys are trying hard to clean up the RB board, suggestion, leave the "old" stuff completely and turn all posts to present FASC biz or lack of. Rehashing old feelings in a "gentlemanly way" is going to get nasty again, leave it alone, IMO.
BABB, interesting little OTC company. Has been quietly paying a nice dividend, only about 7 million OS, low P/E, has finally started going up over a buck. I don't think they have any plans to leave the OTC, just a small franchise company. Was in and out several times over the past couple of years, out now.
http://finance.yahoo.com/q?s=babb.ob
USGL getting nailed today. Watching for a bottom on that one which could be under a buck sometime down the road, IMO.
Waitedg, Yahoo shows a low of 0.41 for IDCO yesterday.
http://finance.yahoo.com/q/hp?s=IDCO.OB
Sam, sandwiches and fried chicken.
beigledog, got me, Google doesn't come up with anything on Pan Osprey Golf Apparatus Co. Taiwan company maybe?
LU, buy and hold?
"Lucent Technologies, by my models, is 73.4% undervalued, making its fair value $10.98. The weekly chart profile is neutral, suggesting the stock is in a trading range. The low end of the range should be between my weekly value pivots at $2.76 and $2.92. (A value pivot is a value level that did not hold on weakness and is now acting as a magnet as buyers and sellers battle for control; a value level is a price at which my models project that buyers will emerge.)"
http://www.thestreet.com/_yahoo/comment/richardsuttmeier/10239105.html?cm_ven=YAHOO&cm_cat=FREE&...
OT: Plastics from corn....Hey! How 'bout corn puffs for packaging instead of styrofoam! Snacks in your UPS packages!
Metabolix and Archer Daniels Midland Have Formed Joint Venture to Commercialize Biodegradable Plastics Made from Corn
Metabolix, Inc. and Archer Daniels Midland Company (ADM) announced today that they have entered a strategic alliance with the purpose of commercializing a new generation of high-performance natural plastics that are eco-friendly and based on sustainable, renewable resources. Through the alliance, the two companies are planning to establish a state-of-the-art 50,000-ton production facility and a 50/50 joint venture to manufacture and market natural PHA polymers for a wide variety of applications, including coated paper, film, and molded goods. Natural PHA polymers are produced using a fully biological fermentation process that converts agricultural raw materials such as corn sugar into a versatile range of biodegradable and compostable plastics.
Under the agreement, ADM will obtain exclusive manufacturing rights and certain co-exclusive marketing rights to Metabolix proprietary PHA technology, which is protected by over 130 issued and pending US patents. The agreement provides that Metabolix will receive upfront and milestone payments for transfer and scale up of the technology. The agreement also provides for royalty payments and profit sharing by the joint venture partners.
“This agreement is a major advance toward our goal of making an array of renewable, eco-friendly alternatives to traditional petrochemical plastics widely available to the global marketplace,” said Jim Barber, Metabolix’s President and CEO. “ADM is a world leader in industrial fermentation, and we are delighted to combine Metabolix’s groundbreaking technology with ADM’s global strengths in agricultural products processing, fermentation, and logistical networking.”
"As part of our continued expansion into the production of environmentally friendly biobased products, we are delighted to partner with Metabolix and enter into the next generation of polymer technology," stated G. Allen Andreas, Chairman and Chief Executive of ADM. “We believe that ADM's large scale fermentation capabilities are a perfect fit for Metabolix's patented technology. Together, we will move forward to produce renewable, biodegradable polymers at a cost which will allow their widespread incorporation into consumer products and meet the growing demands of the global market."
PHAs are a broad and versatile family of natural plastics that range in properties from rigid to highly elastic, making them suitable for films, fibers, adhesives, coatings, molded goods, and a variety of other applications. While stable to even hot water, they will biodegrade in aquatic, soil and composting environments, and even under anaerobic conditions, once their use is over. They are made using a proprietary process developed by Metabolix that converts renewable and sustainable agricultural raw materials through a fully biological fermentation process.
The Black Bubble, Scott Kramer
Monday August 22, 3:30 pm ET
Controversial Texas oil analyst Matt Simmons recently announced that oil could very well reach $100 a barrel. He is quoted as saying, “We could be at $100 by this winter. We have the biggest risk we have ever had of demand exceeding supply. We are now just about to face up to the biggest crisis we have ever had.” When looking for a bubble always watch out for superlatives such as “ever.” But before scenes from “Mad Max” start permeating your every waking thought, and before you run out to the garage to make sure grandpa's shotgun is still there, take a deep breath.
“In crowds it is stupidity and not mother-wit that is accumulated.”
Gustave Le Bon
Wow! As traders, comments like this instinctively create an excitingly romantic mental imagine of us clicking a button to purchase crude oil call options, only to watch them take off l! ike a rocket with the next stop being early retirement. We flash forward 5 years and picture that Ferrari or Yacht. We imagine what it will be like having our grandson sit on our knee in front of a huge glowing fireplace as we spin yarn of the olden days and how we had the foresight to buy oil at $65 or $80. Boy does the greed factor kick in! But that is what a bubble is: massive greed stepping on the shoulders of greed. People building castles in the sky and not caring about the economic laws of supply and demand. One even rationalizes playing a bubble while knowing what they are doing is wrong. The thinking is something like, “I know I shouldn't buy a stock at 300 times earnings; however, I just know there is a fool out there who wants to pay 350 times earning tomorrow.”
The really amazing thing is that no one seems to learn the lessons of the previous bubble, but rather curiously appear to jump in to the current phenomena, hoping to make back the losses! incurred from the previous one. Perhaps they believe the old axioms “ lighting never strikes twice” and “this time it is real.”
One of the more notorious and memorable bubbles was the Dutch Tulip Craze that occurred in Holland during the 17th Century. It is also a less sensitive subject to discuss than the NASDAQ bubble, which burst in 2000 and continued to deflate for 2 years until the index lost about 80% of its value.
A virus termed “mosaic” infected a small portion of the tulip bulbs. Though the disease was not harmful to the tulip, it did result in the affected bulbs exhibiting bizarre flame-like colors and patterns. As this condition was rare, it resulted in collectors coveting infected bulbs, thus the limited supply and healthy demand forced prices higher with every passing day. During the last phases of the obsession (roughly 1634-1637), most of Holland became struck with Tulip-Mania.
Everyone from nobility to gardeners began to rationalize investing in the bulbs as a smart investment, and ! the continuously rising prices seemed to justify these as smart investments. Eventually things got so out of control with demand that a single bulb could command as much as $80,000 converted into today's U.S. Dollars. At the peak in January 1637 there was a twenty-fold increase in the price of bulbs.
Much like how people could rationalize taking equity out of their homes at 7% to invest in NASDAQ stocks in the late 1990s, many 17th century people in Holland sold their homes, thinking that a few bulbs would net them two homes in a few months' time. Eventually the laws of gravity took affect and what was once a market with only buyers became a market with only sellers.
Realizing the potential catastrophic affect a crash would have on an economy focused on one product, the Dutch government stepped in made a public statement declaring that there was no reason why the price of tulips should fall. Not surprisingly, government reassurances didn! 't work as hoped, so the government stepped in and guaranteed the pric e of tulip bulbs at 10% of the high price. Not long after that tulips fell through the government's floor price, which nearly bankrupted Holland's government.
Other notable bubbles beginning/end
South Sea Bubble
Panic of 1837 in US
1847 – the bursting of the UK railway bubble
Financial Crash of 1873
1927- Bubble in US high-tech stock termed Lindbergh Bubble
Black Monday – Stock market crash of 1987 (October)
1989 (mini-crash) – Sparked by the failed buy-out of UAL
January 2000 -2002 – The Mother of All Bubble – NASDAQ/DOT.COM bubble bursts sending the NASDAQ DOWN ABOUT 80%
St! ock market crash of 1929 (Examples of prices below)
RCA $505 to $2 ½
GE 396 ½ to $8 ½
Montgomery Ward 137 7/8 to $6 ½
The above is a small list of bubbles, and there are countless others I could have included. The interesting thing about bubbles is that they usually occur relatively shortly after the sting from the previous one has just worn off.
Reasons Why the Oil Bubble Can Pop
One reason why bubbles form is that many good arguments can be made for “why this time things are different.” Generally speaking, as a whole, the public is not crazy. The media sells people on the best or worst case scenarios. For the last 70+ years people have heard reports from so-called specialists about how there is only so much oil in the world, and eventually it has! to run out. Yet if you look at the predictions the specialists have m ade about when the last drop of oil will be pumped out of the ground, you notice that every couple of years the date gets extended out a few more years.
Since the first man was chased by a saber-tooth, we've devised ways to get ourselves out of a bind or be forced die. It is called Social Darwinism. About 1,000 BC, man invented the bow and arrow for this reason, and you don't see many saber-tooths in the wild anymore. Technology has always provided man with the solutions to his self-created problems. And technology will continue to do so. Better refining techniques, off-shore drilling, etc. have all been designed to overcome oil supply problems.
A more immediate solution of high oil prices will likely come voluntarily from man. When fuel prices at the pump get pricey enough, people will stop driving to work and begin to take public transportation. Families will cut back on the long drives to the countryside on weekends and opt to go to a matinée instead. Peop! le will chose to work from home more, and corporations will help provide incentives to do so. People will begin to car pool more. The federal government, which currently collects over $53 Billion a year in fuel tax may be forced to lower said tax in order to stave off a recession. People will turn in their Hummers for the modern day equivalent of the Ford Pinto.
Certainly oil can still run up a little more, making it more tempting with each advance to want to get in on all fun. That is the hook. Besides, it takes a long time for all really big fools of the “greater fool theory” to hop on the trend. Keep in mind that crude oil has risen 16% in the past three weeks alone. At $3, $3.25 or $4 a gallon, people will cut back.
All the cutting back of petroleum use will result in an increase supply of gasoline, which will have the direct result of lower prices at the pump. The laws of supply and demand may be slow; however, Alfred Marshall's mi! croeconomic laws do work well. Simply speaking, if it gets too expensi ve, people won't buy it. When no one buys a vendor's product, said vendor must reduce the price in order to get rid of the inventory. Besides, if that doesn't work, we can always start a war in the Gulf to fix the problem. In conclusion, don't get sucked in to this black bubble. The money will be made on the downside, not the upside.
Predictions? Oil will likely hit $50 a barrel before you see it at $72 (let alone $100). I am, however, waiting to see a little more greed.
Scott Kramer
Staff Writer and Trading Strategist
Optionetics.com ~ Your Options Education Site
scott.kramer@optionetics.com
DNE insiders have filed to sell a lot of shares, is it because they expect a big spike?
http://finance.yahoo.com/q/it?s=DNE
markrhead, DNE looks like a perfect cup/handle to me. Long handle, but that could mean it's ready to take off especially if the fundamentals are improving. Thanks for the rec.
TRCPA, with my "agenda", you guys may panic if I stop showing up! LOL!
Sorry folks, you can erase the posts, but it doesn't change the fact, this is done, stick a fork in it.
EGLF news at 4:00, may be a mover this week.
http://www.investorshub.com/boards/read_msg.asp?message_id=7453765
Huggums, 4:00 PR from EGLF, could be movin' this week.
Element 21 Signs Exclusive Manufacturing License With Pan Osprey Golf Apparatus Limited
Monday August 22, 4:00 pm ET
IRVINE, CA and TORONTO--(MARKET WIRE)--Aug 22, 2005 -- Element 21 Golf Company (E21) (OTC BB:EGLF.OB - News) announced today that it has entered into an exclusive manufacturing agreement with Pan Osprey Golf Apparatus Co, Limited.
After extensive talks and testing of Element 21's unique scandium metal alloy, the parties have agreed to an exclusive manufacturing agreement that will see Element 21 providing the raw materials with which Pan Osprey will manufacture a full line of clubs under the E21 brand name. In exchange for significant knowledge transfer of working with this advanced metal alloy, Pan Osprey has agreed that it will only manufacture scandium metal alloy clubs for Element 21, and will be constrained from using this alloy for any other third parties applications.
Initial tests conducted by Pan Osprey demonstrated the superior characteristics of the scandium metal alloy as compared to titanium and composites, and convinced the Chinese manufacturer to agree to this exclusive manufacturing contract.
Pan Osprey will manufacture a full line of clubs with proprietary designs from Element 21's design labs. The lineup will include Drivers, fairway woods, and a full range of irons, wedges, hybrid clubs, and putters. The entire lineup has many innovative design features that go well beyond the use of the exotic scandium metal alloy and will deliver unprecedented feel, accuracy and distance for golfing enthusiasts regardless of their level of play.
Dr. Nataliya Hearn, president and CEO of Element 21 Golf, stated: "Pan Osprey is an excellent fit as our primary supplier. Our proprietary scandium metal alloy requires advanced expertise in the manufacturing process and a considerable transfer of manufacturing know-how. Pan Osprey's 35 years of manufacturing experience in the high-end golf equipment industry assures us of an excellent final product. Our primary concern in choosing a manufacturing partner was the need to ensure that we had a reliable and experienced collaborator with a vision to radically improve the performance of golf equipment."
About Element 21: Element 21 is relying on its experience working with advanced scandium metal alloys to introduce this unique space-age material to the golf industry. Scandium alloys were originally developed for applications in aeronautics; MiG series fighter jets and leading edge missile applications, as well as the International Space Station.
Scandium metal alloy clubs represents the first new innovation in material composition of golf clubs to hit the industry in decades. Scandium not only provides significant increases in distance, but more importantly, added accuracy and consistency. Due to their advanced composition, coupled with numerous design innovations, these clubs will offer improved feel while reducing shock transfer to the player's hands.
Media members interested in testing shafts or the E21 Scandium Performance System clubs for an editorial review or receiving further information please contact:
The Media Group
Joe Wieczorek or Bart Henyan
(847) 956-9090
joe@themediagroupinc.com
barthenyan@hotmail.com
Statements in this release, other than statements of historical fact, may be regarded, in certain instances, as "forward-looking statements" pursuant to Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934, respectively. "Forward-looking statements" are based on expectations, estimates and projections at the time the statements are made that involve risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. There can be no assurance that such statements will ever prove to be accurate and readers should not place undue reliance on any such "forward-looking statements" contained herein.
Contact:
Contact:
Element 21 Golf Company
(800) 710-2021
http://www.E21Golf.com
Investor Information
949-480-9697
investors@e21golf.com
More on coal: Headwaters (No. 58. Fortune Mag pick)
There are few commodities in shorter supply these days than oil and cement. We can all thank China for that. Now imagine a public company that offered potential solutions to both of these shortages. Sounds like an interesting investment, right? Well, that’s why Headwaters is such an intriguing little stock. "They have an incredible patent portfolio," says Alan Norton, co-manager of the Hancock Small Cap Equity fund. "From what we can tell, the technology is all very solid, though there is some execution risk."
Headwaters gets its $774 million in revenue from two main businesses: a construction-materials unit that generates most of the cash flow and an energy-technology division that generates much of the excitement. The construction business sells siding, stucco, concrete, masonry blocks, and stone veneers—all benefiting from the building and remodeling boom. It also sells something called FlexCrete, a concrete alternative that substitutes fly ash (a waste byproduct of coal burning) for traditional cement.
Right now, Headwaters’ energy business is heavily dependent on federal tax credits that can be earned for converting coal refuse into synthetic fuel. In the near term that’s a problem, as the law authorizing the tax credits is set to expire in 2007. Longer term, however, CEO Kirk Benson has high hopes for his energy business, even if the tax credits are not renewed (and it’s still possible that they will be). The dual sources of Benson’s optimism: Headwaters has one technology—already generating revenue in China—that converts coal into diesel fuel. It has another that helps convert heavy oil and oil sands into high-quality synthetic crude.
Couple the abundance of coal in the U.S. and of oil sands in Canada with today’s $65-a-barrel price of crude oil, and you’ve got near-perfect conditions for Headwaters. "The mid-30s is the tipping point where these alternative fuels and the incentives to invest in them really kick in," says Norton. So even if oil prices pull back sharply, Headwaters’ technologies remain economically viable.
"The other issue," says Norton, "is what may come out of any future energy legislation. I think it’s clear that this country needs to develop more internal sources of energy. We have the largest deposits of coal in the world. Given a lot of their technologies, we feel Headwaters is in a pretty strong position."
http://finance.yahoo.com/q?s=HW&d=t
Good news! PDEN up 69,898.81 percent!!!!!!
Bad news is only 1800 shares traded! LOL!
http://finance.yahoo.com/q?s=pden.pk
Are they making any progress on separating the nano tubes from the non-nano clay? Do they use little nano-bots?
OT? The Breaking Point
"Bush did not even raise fuel-efficiency standards for passenger cars. When a crisis comes -- whether in a year or 2 or 10 -- it will be all the more painful because we will have done little or nothing to prepare for it."
By PETER MAASS
Published: August 21, 2005
The largest oil terminal in the world, Ras Tanura, is located on the eastern coast of Saudi Arabia, along the Persian Gulf. From Ras Tanura's control tower, you can see the classic totems of oil's dominion -- supertankers coming and going, row upon row of storage tanks and miles and miles of pipes. Ras Tanura, which I visited in June, is the funnel through which nearly 10 percent of the world's daily supply of petroleum flows. Standing in the control tower, you are surrounded by more than 50 million barrels of oil, yet not a drop can be seen.
George Steinmetz
Oil Runs Through It...for Now: Shaybah, one of Saudi Arabia's oil fields, which all told can produce 10.5 million barrels of oil a day. The Saudis say they can boost production to 12.5 million barrels a day, or 15 million, or more. But there is a limit to how much you can ask of the earth, and it is fast approaching, some experts say.
Forum: Energy
Should America be doing more to prepare for an oil shortage?
Stephanie Kuykendal/Corbis, for The New York Times
Future Shock? Sadad al-Husseini, a former Aramco executive, sees an oil shortage looming. But he says that it is consumers, not producers, who are to blame.
George Steinmetz
Oil fires signal another well being put online at Shaybah, an oil field in Saudi Arabia, the world's sole oil superpower.
The oil is there, of course. In a technological sleight of hand, oil can be extracted from the deserts of Arabia, processed to get rid of water and gas, sent through pipelines to a terminal on the gulf, loaded onto a supertanker and shipped to a port thousands of miles away, then run through a refinery and poured into a tanker truck that delivers it to a suburban gas station, where it is pumped into an S.U.V. -- all without anyone's actually glimpsing the stuff. So long as there is enough oil to fuel the global economy, it is not only out of sight but also out of mind, at least for consumers.
I visited Ras Tanura because oil is no longer out of mind, thanks to record prices caused by refinery shortages and surging demand -- most notably in the United States and China -- which has strained the capacity of oil producers and especially Saudi Arabia, the largest exporter of all. Unlike the 1973 crisis, when the embargo by the Arab members of the Organization of Petroleum Exporting Countries created an artificial shortfall, today's shortage, or near-shortage, is real. If demand surges even more, or if a producer goes offline because of unrest or terrorism, there may suddenly not be enough oil to go around.
As Aref al-Ali, my escort from Saudi Aramco, the giant state-owned oil company, pointed out, ''One mistake at Ras Tanura today, and the price of oil will go up.'' This has turned the port into a fortress; its entrances have an array of gates and bomb barriers to prevent terrorists from cutting off the black oxygen that the modern world depends on. Yet the problem is far greater than the brief havoc that could be wrought by a speeding zealot with 50 pounds of TNT in the trunk of his car. Concerns are being voiced by some oil experts that Saudi Arabia and other producers may, in the near future, be unable to meet rising world demand. The producers are not running out of oil, not yet, but their decades-old reservoirs are not as full and geologically spry as they used to be, and they may be incapable of producing, on a daily basis, the increasing volumes of oil that the world requires. ''One thing is clear,'' warns Chevron, the second-largest American oil company, in a series of new advertisements, ''the era of easy oil is over.''
In the past several years, the gap between demand and supply, once considerable, has steadily narrowed, and today is almost negligible. The consequences of an actual shortfall of supply would be immense. If consumption begins to exceed production by even a small amount, the price of a barrel of oil could soar to triple-digit levels. This, in turn, could bring on a global recession, a result of exorbitant prices for transport fuels and for products that rely on petrochemicals -- which is to say, almost every product on the market. The impact on the American way of life would be profound: cars cannot be propelled by roof-borne windmills. The suburban and exurban lifestyles, hinged to two-car families and constant trips to work, school and Wal-Mart, might become unaffordable or, if gas rationing is imposed, impossible. Carpools would be the least imposing of many inconveniences; the cost of home heating would soar -- assuming, of course, that climate-controlled habitats do not become just a fond memory.
But will such a situation really come to pass? That depends on Saudi Arabia. To know the answer, you need to know whether the Saudis, who possess 22 percent of the world's oil reserves, can increase their country's output beyond its current limit of 10.5 million barrels a day, and even beyond the 12.5-million-barrel target it has set for 2009. (World consumption is about 84 million barrels a day.) Saudi Arabia is the sole oil superpower. No other producer possesses reserves close to its 263 billion barrels, which is almost twice as much as the runner-up, Iran, with 133 billion barrels. New fields in other countries are discovered now and then, but they tend to offer only small increments. For example, the much-contested and as-yet-unexploited reserves in the Alaska National Wildlife Refuge are believed to amount to about 10 billion barrels, or just a fraction of what the Saudis possess.
But the truth about Saudi oil is hard to figure out. Oil reservoirs cannot be inventoried like wood in a wilderness: the oil is underground, unseen by geologists and engineers, who can, at best, make highly educated guesses about how much is underfoot and how much can be extracted in the future. And there is a further obstacle: the Saudis will not let outsiders audit their confidential data on reserves and production. Oil is an industry in which not only is the product hidden from sight but so is reliable information about it. And because we do not know when a supply-demand shortfall might arrive, we do not know when to begin preparing for it, so as to soften its impact; the economic blow may come as a sledgehammer from the darkness.
Of course the Saudis do have something to say about this prospect. Before journeying to the kingdom, I went to Washington to hear the Saudi oil minister, Ali al-Naimi, speak at an energy conference in the mammoth Ronald Reagan Building and International Trade Center, not far from the White House. Naimi was the star attraction at a gathering of the American petro-political nexus. Samuel Bodman, the U.S. energy secretary, was on the dais next to him. David O'Reilly, chairman and C.E.O. of Chevron, was waiting in the wings. The moderator was an éminence grise of the oil world, James Schlesinger, a former energy secretary, defense secretary and C.I.A. director.
''I want to assure you here today that Saudi Arabia's reserves are plentiful, and we stand ready to increase output as the market dictates,'' said Naimi, dressed in a gray business suit and speaking with only a slight Arabic accent. He addressed skeptics who contend that Saudi reservoirs cannot be tapped for larger amounts of oil. ''I am quite bullish on technology as the key to our energy future,'' he said. ''Technological innovation will allow us to find and extract more oil around the world.'' He described the task of increasing output as just ''a question of investment'' in new wells and pipelines, and he noted that consuming nations urgently need to build new refineries to process increased supplies of crude. ''There is absolutely no lack of resources worldwide,'' he repeated.
His assurances did not assure. A barrel of oil cost $55 at the time of his speech; less than three months later, the price had jumped by 20 percent. The truth of the matter -- whether the world will really have enough petroleum in the years ahead -- was as well concealed as the millions of barrels of oil I couldn't see at Ras Tanura.
or 31 years, Matthew Simmons has prospered as the head of his own firm, Simmons & Company International, which advises energy companies on mergers and acquisitions. A member of the Council on Foreign Relations, a graduate of the Harvard Business School and an unpaid adviser on energy policy to the 2000 presidential campaign of George W. Bush, he would be a card-carrying member of the global oil nomenclatura, if cards were issued for such things. Yet he is one of the principal reasons the oil world is beginning to ask hard questions of itself.
Two years ago, Simmons went to Saudi Arabia on a government tour for business executives. The group was presented with the usual dog-and-pony show, but instead of being impressed, as most visitors tend to be, with the size and expertise of the Saudi oil industry, Simmons became perplexed. As he recalls in his somewhat heretical new book, ''Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,'' a senior manager at Aramco told the visitors that ''fuzzy logic'' would be used to estimate the amount of oil that could be recovered. Simmons had never heard of fuzzy logic. What could be fuzzy about an oil reservoir? He suspected that Aramco, despite its promises of endless supplies, might in fact not know how much oil remained to be recovered.
Simmons returned home with an itch to scratch. Saudi Arabia was one of the charter members of OPEC, founded in 1960 in Baghdad to coordinate the policies of oil producers. Like every OPEC country, Saudi Arabia provides only general numbers about its output and reserves; it does not release details about how much oil is extracted from each reservoir and what methods are used to extract that oil, and it does not permit audits by outsiders. The condition of Saudi fields, and those of other OPEC nations, is a closely guarded secret. That's largely because OPEC quotas, which were first imposed in 1983 to limit the output of member countries, were based on overall reserves; the higher an OPEC member's reserves, the higher its quota. It is widely believed that most, if not all, OPEC members exaggerated the sizes of their reserves in order to have the largest possible quota -- and thus the largest possible revenue stream.
In the days of excess supply, bankers like Simmons did not know, or care, about the fudging; whether or not reserves were hyped, there was plenty of oil coming out of the ground. Through the 1970's, 80's and 90's, the capacity of OPEC and non-OPEC countries exceeded demand, and that's why OPEC imposed a quota system -- to keep some product off the market (although many OPEC members, seeking as much revenue as possible, quietly sold more oil than they were supposed to). Until quite recently, the only reason to fear a shortage was if a boycott, war or strike were to halt supplies. Few people imagined a time when supply would dry up because of demand alone. But a steady surge in demand in recent years -- led by China's emergence as a voracious importer of oil -- has changed that.
This demand-driven scarcity has prompted the emergence of a cottage industry of experts who predict an impending crisis that will dwarf anything seen before. Their point is not that we are running out of oil, per se; although as much as half of the world's recoverable reserves are estimated to have been consumed, about a trillion barrels remain underground. Rather, they are concerned with what is called ''capacity'' -- the amount of oil that can be pumped to the surface on a daily basis. These experts -- still a minority in the oil world -- contend that because of the peculiarities of geology and the limits of modern technology, it will soon be impossible for the world's reservoirs to surrender enough oil to meet daily demand.
One of the starkest warnings came in a February report commissioned by the United States Department of Energy's National Energy Technology Laboratory. ''Because oil prices have been relatively high for the past decade, oil companies have conducted extensive exploration over that period, but their results have been disappointing,'' stated the report, assembled by Science Applications International, a research company that works on security and energy issues. ''If recent trends hold, there is little reason to expect that exploration success will dramatically improve in the future. . . . The image is one of a world moving from a long period in which reserves additions were much greater than consumption to an era in which annual additions are falling increasingly short of annual consumption. This is but one of a number of trends that suggest the world is fast approaching the inevitable peaking of conventional world oil production.''
The reference to ''peaking'' is not a haphazard word choice -- ''peaking'' is a term used in oil geology to define the critical point at which reservoirs can no longer produce increasing amounts of oil. (This tends to happen when reservoirs are about half-empty.) ''Peak oil'' is the point at which maximum production is reached; afterward, no matter how many wells are drilled in a country, production begins to decline. Saudi Arabia and other OPEC members may have enough oil to last for generations, but that is no longer the issue. The eventual and painful shift to different sources of energy -- the start of the post-oil age -- does not begin when the last drop of oil is sucked from under the Arabian desert. It begins when producers are unable to continue increasing their output to meet rising demand. Crunch time comes long before the last drop.
''The world has never faced a problem like this,'' the report for the Energy Department concluded. ''Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary.''
Most experts do not share Simmons's concerns about the imminence of peak oil. One of the industry's most prominent consultants, Daniel Yergin, author of a Pulitzer Prize-winning book about petroleum, dismisses the doomsday visions. ''This is not the first time that the world has 'run out of oil,''' he wrote in a recent Washington Post opinion essay. ''It's more like the fifth. Cycles of shortage and surplus characterize the entire history of the oil industry.'' Yergin says that a number of oil projects that are under construction will increase the supply by 20 percent in five years and that technological advances will increase the amount of oil that can be recovered from existing reservoirs. (Typically, with today's technology, only about 40 percent of a reservoir's oil can be pumped to the surface.)
Yergin's bullish view has something in common with the views of the pessimists -- it rests on unknowns. Will the new projects that are under way yield as much oil as their financial backers hope? Will new technologies increase recovery rates as much as he expects? These questions are next to impossible to answer because coaxing oil out of the ground is an extraordinarily complex undertaking. The popular notion of reservoirs as underground lakes, from which wells extract oil like straws sucking a milkshake from a glass, is incorrect. Oil exists in drops between and inside porous rocks. A new reservoir may contain sufficient pressure to make these drops of oil flow to the surface in a gusher, but after a while -- usually within a few years and often sooner than that -- natural pressure lets up and is no longer sufficient to push oil to the surface. At that point, ''secondary'' recovery efforts are begun, like pumping water or gas into the reservoirs to increase the pressure.
This process is unpredictable; reservoirs are extremely temperamental. If too much oil is extracted too quickly or if the wrong types or amounts of secondary efforts are employed, the amount of oil that can be recovered from a field can be greatly reduced; this is known in the oil world as ''damaging a reservoir.'' A widely cited example is Oman: in 2001, its daily production reached more than 960,000 barrels, but then suddenly declined, despite the use of advanced technologies. Today, Oman produces 785,000 barrels of oil a day. Herman Franssen, a consultant who worked in Oman for a decade, sees that country's experience as a possible lesson in the limits of technology for other producers that try to increase or maintain high levels of output. ''They reached a million barrels a day, and then a few years later production collapsed,'' Franssen said in a phone interview. ''They used all these new technologies, but they haven't been able to stop the decline yet.''
The vague production and reserve data that gets published does not begin to tell the whole story of an oil field's health, production potential or even its size. For a clear-as-possible picture of a country's oil situation, you need to know what is happening in each field -- how many wells it has, how much oil each well is producing, what recovery methods are being used and how long they've been used and the trend line since the field went into production. Data of that sort are typically not released by state-owned companies like Saudi Aramco.
As Matthew Simmons searched for clues to the truth of the Saudi situation, he immersed himself in the minutiae of oil geology. He realized that data about Saudi fields might be found in the files of the Society of Petroleum Engineers. Oil engineers, like most professional groups, have regular conferences at which they discuss papers that delve into the work they do. The papers, which focus on particular wells that highlight a problem or a solution to a problem, are presented and debated at the conferences and published by the S.P.E. -- and then forgotten.
Before Simmons poked around, no one had taken the time to pull together the S.P.E. papers that involved Saudi oil fields and review them en masse. Simmons found more than 200 such papers and studied them carefully. Although the papers cover only a portion of the kingdom's wells and date back, in some cases, several decades, they constitute perhaps the best public data about the condition and prospects of Saudi reservoirs.
Ghawar is the treasure of the Saudi treasure chest. It is the largest oil field in the world and has produced, in the past 50 years, about 55 billion barrels of oil, which amounts to more than half of Saudi production in that period. The field currently produces more than five million barrels a day, which is about half of the kingdom's output. If Ghawar is facing problems, then so is Saudi Arabia and, indeed, the entire world.
Simmons found that the Saudis are using increasingly large amounts of water to force oil out of Ghawar. Most of the wells are concentrated in the northern portion of the 174-mile-long field. That might seem like good news -- when the north runs low, the Saudis need only to drill wells in the south. But in fact it is bad news, Simmons concluded, because the southern portions of Ghawar are geologically more difficult to draw oil from. ''Someday (and perhaps that day will be soon), the remarkably high well flow rates at Ghawar's northern end will fade, as reservoir pressures finally plummet,'' Simmons writes in his book. ''Then, Saudi Arabian oil output will clearly have peaked. The death of this great king'' -- meaning Ghawar -- ''leaves no field of vaguely comparable stature in the line of succession. Twilight at Ghawar is fast approaching.'' He goes on: ''The geological phenomena and natural driving forces that created the Saudi oil miracle are conspiring now in normal and predictable ways to bring it to its conclusion, in a time frame potentially far shorter than officialdom would have us believe.'' Simmons concludes, ''Saudi Arabia clearly seems to be nearing or at its peak output and cannot materially grow its oil production.''
Saudi officials belittle Simmons's work. Nansen Saleri, a senior Aramco official, has described Simmons as a banker ''trying to come across as a scientist.'' In a speech last year, Saleri wryly said, ''I can read 200 papers on neurology, but you wouldn't want me to operate on your relatives.'' I caught up with Simmons in June, during a trip he made to Manhattan to talk with a group of oil-shipping executives. The impression he gives is of an enthusiastic inventor sharing a discovery that took him by surprise. He has a certain wide-eyed wonder in his regard, as if a bit of mystery can be found in everything that catches his eye. And he has a rumpled aspect -- thinning hair slightly askew, shirt sleeves a fraction too long. Though he delivers a bracing message, his discourse can wander. He is a successful businessman, and it is clear that he did not achieve his position by being a man of impeccable convention. He certainly has not lost sight of the rule that people who shout ''the end is nigh'' do not tend to be favorably reviewed by historians, let alone by their peers. He notes in his book that way back in 1979, The New York Times published an investigative story by Seymour Hersh under the headline ''Saudi Oil Capacity Questioned.'' He knows that in past decades the Cassandras failed to foresee new technologies, like deep-water and horizontal drilling, that provided new sources of oil and raised the amount of oil that can be recovered from reservoirs.
But Simmons says that there are only so many rabbits technology can pull out of its petro-hat. He impishly notes that if the Saudis really wanted to, they could easily prove him wrong. ''If they want to satisfy people, they should issue field-by-field production reports and reserve data and have it audited,'' he told me. ''It would then take anybody less than a week to say, 'Gosh, Matt is totally wrong,' or 'Matt actually might be too optimistic.'''
Simmons has a lot riding on his campaign -- not only his name but also his business, which would not be rewarded if he is proved to be a fool. What, I asked, if the data show that the Saudis will be able to sustain production of not only 12.5 million barrels a day -- their target for 2009 -- but 15 million barrels, which global demand is expected to require of them in the not-too-distant future? ''The odds of them sustaining 12 million barrels a day is very low,'' Simmons replied. ''The odds of them getting to 15 million for 50 years -- there's a better chance of me having Bill Gates's net worth, and I wouldn't bet a dime on that forecast.''
The gathering of executives took place in a restaurant at Chelsea Piers; about 35 men sat around a set of tables as the host introduced Simmons. He rambled a bit but hit his talking points, and the executives listened raptly; at one point, the man on my right broke into a soft whistle, of the sort that means ''Holy cow.''
Simmons didn't let up. ''We're going to look back at history and say $55 a barrel was cheap,'' he said, recalling a TV interview in which he predicted that a barrel might hit triple digits.
He said that the anchor scoffed, in disbelief, ''A hundred dollars?''
Simmons replied, ''I wasn't talking about low triple digits.''
he onset of triple-digit prices might seem a blessing for the Saudis -- they would receive greater amounts of money for their increasingly scarce oil. But one popular misunderstanding about the Saudis -- and about OPEC in general -- is that high prices, no matter how high, are to their benefit.
Although oil costing more than $60 a barrel hasn't caused a global recession, that could still happen: it can take a while for high prices to have their ruinous impact. And the higher above $60 that prices rise, the more likely a recession will become. High oil prices are inflationary; they raise the cost of virtually everything -- from gasoline to jet fuel to plastics and fertilizers -- and that means people buy less and travel less, which means a drop-off in economic activity. So after a brief windfall for producers, oil prices would slide as recession sets in and once-voracious economies slow down, using less oil. Prices have collapsed before, and not so long ago: in 1998, oil fell to $10 a barrel after an untimely increase in OPEC production and a reduction in demand from Asia, which was suffering through a financial crash. Saudi Arabia and the other members of OPEC entered crisis mode back then; adjusted for inflation, oil was at its lowest price since the cartel's creation, threatening to feed unrest among the ranks of jobless citizens in OPEC states.
''The Saudis are very happy with oil at $55 per barrel, but they're also nervous,'' a Western diplomat in Riyadh told me in May, referring to the price that prevailed then. (Like all the diplomats I spoke to, he insisted on speaking anonymously because of the sensitivities of relations with Saudi Arabia.) ''They don't know where this magic line has moved to. Is it now $65? Is it $75? Is it $80? They don't want to find out, because if you did have oil move that far north . . . the chain reaction can come back to a price collapse again.''
High prices can have another unfortunate effect for producers. When crude costs $10 a barrel or even $30 a barrel, alternative fuels are prohibitively expensive. For example, Canada has vast amounts of tar sands that can be rendered into heavy oil, but the cost of doing so is quite high. Yet those tar sands and other alternatives, like bioethanol, hydrogen fuel cells and liquid fuel from natural gas or coal, become economically viable as the going rate for a barrel rises past, say, $40 or more, especially if consuming governments choose to offer their own incentives or subsidies. So even if high prices don't cause a recession, the Saudis risk losing market share to rivals into whose nonfundamentalist hands Americans would much prefer to channel their energy dollars. A concerted push for greater energy conservation in the United States, which consumes one-quarter of the world's oil (mostly to fuel our cars, as gasoline), would hurt producing nations, too. Basically, any significant reduction in the demand for oil would be ruinous for OPEC members, who have little to offer the world but oil; if a substitute can be found, their future is bleak. Another Western diplomat explained the problem facing the Saudis: ''You want to have the price as high as possible without sending the consuming nations into a recession and at the same time not have the price so high that it encourages alternative technologies.''
From the American standpoint, one argument in favor of conservation and a switch to alternative fuels is that by limiting oil imports, the United States and its Western allies would reduce their dependence on a potentially unstable region. (In fact, in an effort to offset the risks of relying on the Saudis, America's top oil suppliers are Canada and Mexico.) In addition, sending less money to Saudi Arabia would mean less money in the hands of a regime that has spent the past few decades doling out huge amounts of its oil revenue to mosques, madrassas and other institutions that have fanned the fires of Islamic radicalism. The oil money has been dispensed not just by the Saudi royal family but by private individuals who benefited from the oil boom -- like Osama bin Laden, whose ample funds, probably eroded now, came from his father, a construction magnate. Without its oil windfall, Saudi Arabia would have had a hard time financing radical Islamists across the globe.
For the Saudis, the political ramifications of reduced demand for its oil would not be negligible. The royal family has amassed vast personal wealth from the country's oil revenues. If, suddenly, Saudis became aware that the royal family had also failed to protect the value of the country's treasured resource, the response could be severe. The mere admission that Saudi reserves are not as impressively inexhaustible as the royal family has claimed could lead to hard questions about why the country, and the world, had been misled. With the death earlier this month of the long-ailing King Fahd, the royal family is undergoing another period of scrutiny; the new king, Abdullah, is in his 80's, and the crown prince, his half-brother Sultan, is in his 70's, so the issue of generational change remains to be settled. As long as the country is swimming in petro-dollars -- even as it is paying off debt accrued during its lean years -- everyone is relatively happy, but that can change. One diplomat I spoke to recalled a comment from Sheik Ahmed Zaki Yamani, the larger-than-life Saudi oil minister during the 1970's: ''The Stone Age didn't end for lack of stone, and the oil age will end long before the world runs out of oil.''
Until now, the Saudis had an excess of production capacity that allowed them, when necessary, to flood the market to drive prices down. They did that in 1990, when the Iraqi invasion of Kuwait eliminated not only Kuwait's supply of oil but also Iraq's. The Saudis functioned, as they always had, as the central bank of oil, releasing supply to the market when it was needed and withdrawing supply to keep prices from going lower than the cartel would have liked. In other words, they controlled not only the price of oil but their own destiny as well.
''That is what the world has called on them to do before -- turn on the taps to produce more and get prices down,'' a senior Western diplomat in Riyadh told me recently. ''Decreasing prices used to keep out alternative fuels. I don't see how they're able to do that anymore. This is a huge change, and it is a big step in the move to whatever is coming next. That's what's really happening.''
Without the ability to flood the markets with oil, the Saudis are resorting to flooding the market with promises; it is a sort of petro-jawboning. That's why Ali al-Naimi, the oil minister, told his Washington audience that Saudi Arabia has embarked on a crash program to raise its capacity to 12.5 million barrels a day by 2009 and even higher in the years after that. Naimi is not unlike a factory manager who needs to promise the moon to his valuable clients, for fear of losing or alarming them. He has no choice. The moment he says anything bracing, the touchy energy markets will probably panic, pushing prices even higher and thereby hastening the onset of recession, a switch to alternative fuels or new conservation efforts -- or all three. Just a few words of honest caution could move the markets; Naimi's speeches are followed nearly as closely in the financial world as those of Alan Greenspan.
I journeyed to Saudi Arabia to interview Naimi and other senior officials, to get as far beyond their prepared remarks as might be possible. Although I was allowed to see Ras Tanura, my interview requests were denied. I was invited to visit Aramco's oil museum in Dhahran, but that is something a Saudi schoolchild can do on a field trip. It was a ''show but don't tell'' policy. I was able to speak about production issues only with Ibrahim al-Muhanna, the oil ministry spokesman, who reluctantly met me over coffee in the lobby of my hotel in Riyadh. He defended Saudi Arabia's refusal to share more data, noting that the Saudis are no different from most oil producers.
''They will not tell you,'' he said. ''Nobody will. And that is not going to change.'' Referring to the fact that Saudi Arabia is often called the central bank of oil, he added: ''If an outsider goes to the Fed and asks, 'How much money do you have?' they will tell you. If you say, 'Can I come and count it?' they will not let you. This applies to oil companies and oil countries.'' I mentioned to Muhanna that many people think his government's ''trust us'' stance is not convincing in light of the cheating that has gone on within OPEC and in the industry as a whole; even Royal Dutch/Shell, a publicly listed oil company that undergoes regular audits, has admitted that it overstated its 2002 reserves by 23 percent.
''There is no reason for any country or company to lie,'' Muhanna replied. ''There is a lot of oil around.'' I didn't need to ask about Simmons and his peak-oil theory; when I met Muhanna at the conference in Washington, he nearly broke off our conversation at the mention of Simmons's name. ''He does not know anything,'' Muhanna said. ''The only thing he has is a big mouth. We should not pay attention to him. Either you believe us or you don't.''
o whom to believe? Before leaving New York for Saudi Arabia, I was advised by several oil experts to try to interview Sadad al-Husseini, who retired last year after serving as Aramco's top executive for exploration and production. I faxed him in Dhahran and received a surprisingly quick reply; he agreed to meet me. A week later, after I arrived in Riyadh, Husseini e-mailed me, asking when I would come to Dhahran; in a follow-up phone call, he offered to pick me up at the airport. He was, it seemed, eager to talk.
It can be argued that in a nation devoted to oil, Husseini knows more about it than anyone else. Born in Syria, Husseini was raised in Saudi Arabia, where his father was a government official whose family took on Saudi citizenship. Husseini earned a Ph.D. in geological sciences from Brown University in 1973 and went to work in Aramco's exploration department, eventually rising to the highest position. Until his retirement last year -- said to have been caused by a top-level dispute, the nature of which is the source of many rumors -- Husseini was a member of the company's board and its management committee. He is one of the most respected and accomplished oilmen in the world.
After meeting me at the cavernous airport that serves Dhahran, he drove me in his luxury sedan to the villa that houses his private office. As we entered, he pointed to an armoire that displayed a dozen or so vials of black liquid. ''These are samples from oil fields I discovered,'' he explained. Upstairs, there were even more vials, and he would have possessed more than that except, as he said, laughing, ''I didn't start collecting early enough.''
We spoke for several hours. The message he delivered was clear: the world is heading for an oil shortage. His warning is quite different from the calming speeches that Naimi and other Saudis, along with senior American officials, deliver on an almost daily basis. Husseini explained that the need to produce more oil is coming from two directions. Most obviously, demand is rising; in recent years, global demand has increased by two million barrels a day. (Current daily consumption, remember, is about 84 million barrels a day.) Less obviously, oil producers deplete their reserves every time they pump out a barrel of oil. This means that merely to maintain their reserve base, they have to replace the oil they extract from declining fields. It's the geological equivalent of running to stay in place. Husseini acknowledged that new fields are coming online, like offshore West Africa and the Caspian basin, but he said that their output isn't big enough to offset this growing need.
''You look at the globe and ask, 'Where are the big increments?' and there's hardly anything but Saudi Arabia,'' he said. ''The kingdom and Ghawar field are not the problem. That misses the whole point. The problem is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You're leaping by two million to three million a year, and if you have to cover declines, that's another four to five million.'' In other words, if demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional six to eight million barrels a day -- at least two million new barrels a day to meet the rising demand and at least four million to compensate for the declining production of existing fields. ''That's like a whole new Saudi Arabia every couple of years,'' Husseini said. ''It can't be done indefinitely. It's not sustainable.''
Husseini speaks patiently, like a teacher who hopes someone is listening. He is in the enviable position of knowing what he talks about while having the freedom to speak openly about it. He did not disclose precise information about Saudi reserves or production -- which remain the equivalent of state secrets -- but he felt free to speak in generalities that were forthright, even when they conflicted with the reassuring statements of current Aramco officials. When I asked why he was willing to be so frank, he said it was because he sees a shortage ahead and wants to do what he can to avert it. I assumed that he would not be particularly distressed if his rivals in the Saudi oil establishment were embarrassed by his frankness.
Although Matthew Simmons says it is unlikely that the Saudis will be able to produce 12.5 million barrels a day or sustain output at that level for a significant period of time, Husseini says the target is realistic; he says that Simmons is wrong to state that Saudi Arabia has reached its peak. But 12.5 million is just an interim marker, as far as consuming nations are concerned, on the way to 15 million barrels a day and beyond -- and that is the point at which Husseini says problems will arise.
At the conference in Washington in May, James Schlesinger, the moderator, conducted a question-and-answer session with Naimi at the conclusion of the minister's speech. One of the first questions involved peak oil: might it be true that Saudi Arabia, which has relied on the same reservoirs, and especially Ghawar, for more than five decades, is nearing the geological limit of its output?
Naimi wouldn't hear of it.
''I can assure you that we haven't peaked,'' he responded. ''If we peaked, we would not be going to 12.5 and we would not be visualizing a 15-million-barrel-per-day production capacity. . . . We can maintain 12.5 or 15 million for the next 30 to 50 years.''
Experts like Husseini are very concerned by the prospect of trying to produce 15 million barrels a day. Even if production can be ramped up that high, geology may not be forgiving. Fields that are overproduced can drop off, in terms of output, quite sharply and suddenly, leaving behind large amounts of oil that cannot be coaxed out with existing technology. This is called trapped oil, because the rocks or sediment around it prevent it from escaping to the surface. Unless new technologies are developed, that oil will never be extracted. In other words, the haste to recover oil can lead to less oil being recovered.
''You could go to 15, but that's when the questions of depletion rate, reservoir management and damaging the fields come into play,'' says Nawaf Obaid, a Saudi oil and security analyst who is regarded as being exceptionally well connected to key Saudi leaders. ''There is an understanding across the board within the kingdom, in the highest spheres, that if you're going to 15, you'll hit 15, but there will be considerable risks . . . of a steep decline curve that Aramco will not be able to do anything about.''
Even if the Saudis are willing to risk damaging their fields, or even if the risk is overstated, Husseini points out a practical problem. To produce and sustain 15 million barrels a day, Saudi Arabia will have to drill a lot more wells and build a lot more pipelines and processing facilities. Currently, the global oil industry suffers a deficit of qualified engineers to oversee such projects and the equipment and the raw materials -- for example, rigs and steel -- to build them. These things cannot be wished from thin air or developed quickly enough to meet the demand.
''If we had two dozen Texas A&M's producing a thousand new engineers a year and the industrial infrastructure in the kingdom, with the drilling rigs and power plants, we would have a better chance, but you cannot put that into place overnight,'' Husseini said. ''Capacity is not just a function of reserves. It is a function of reserves plus know-how plus a commercial economic system that is designed to increase the resource exploitation. For example, in the U.S. you have infrastructure -- there must be tens of thousands of miles of pipelines. If we, in Saudi Arabia, evolve to that level of commercial maturity, we could probably produce a heck of a lot more oil. But to get there is a very tedious, slow process.''
He worries that the rising global demand for oil will lead to the petroleum equivalent of running an engine at ever-increasing speeds without stopping to cool it down or change the oil. Husseini does not want to see the fragile and irreplaceable reservoirs of the Middle East become damaged through wanton overproduction.
''If you are ramping up production so fast and jump from high to higher to highest, and you're not having enough time to do what needs to be done, to understand what needs to be done, then you can damage reservoirs,'' he said. ''Systematic development is not just a matter of money. It's a matter of reservoir dynamics, understanding what's there, analyzing and understanding information. That's where people come in, experience comes in. These are not universally available resources.''
The most worrisome part of the crisis ahead revolves around a set of statistics from the Energy Information Administration, which is part of the U.S. Department of Energy. The E.I.A. forecast in 2004 that by 2020 Saudi Arabia would produce 18.2 million barrels of oil a day, and that by 2025 it would produce 22.5 million barrels a day. Those estimates were unusual, though. They were not based on secret information about Saudi capacity, but on the projected needs of energy consumers. The figures simply assumed that Saudi Arabia would be able to produce whatever the United States needed it to produce. Just last month, the E.I.A. suddenly revised those figures downward -- not because of startling new information about world demand or Saudi supply but because the figures had given so much ammunition to critics. Husseini, for example, described the 2004 forecast as unrealistic.
''That's not how you would manage a national, let alone an international, economy,'' he explained. ''That's the part that is scary. You draw some assumptions and then say, 'O.K., based on these assumptions, let's go forward and consume like hell and burn like hell.''' When I asked whether the kingdom could produce 20 million barrels a day -- about twice what it is producing today from fields that may be past their prime -- Husseini paused for a second or two. It wasn't clear if he was taking a moment to figure out the answer or if he needed a moment to decide if he should utter it. He finally replied with a single word: No.
''It's becoming unrealistic,'' he said. ''The expectations are beyond what is achievable. This is a global problem . . . that is not going to be solved by tinkering with the Saudi industry.''
It would be unfair to blame the Saudis alone for failing to warn of whatever shortages or catastrophes might lie ahead.
In the political and corporate realms of the oil world, there are few incentives to be forthright. Executives of major oil companies have been reluctant to raise alarms; the mere mention of scarce supplies could alienate the governments that hand out lucrative exploration contracts and also send a message to investors that oil companies, though wildly profitable at the moment, have a Malthusian long-term future. Fortunately, that attitude seems to be beginning to change. Chevron's ''easy oil is over'' advertising campaign is an indication that even the boosters of an oil-drenched future are not as bullish as they once were.
Politicians remain in the dark. During the 2004 presidential campaign, which occurred as gas prices were rising to record levels, the debate on energy policy was all but nonexistent. The Bush campaign produced an advertisement that concluded: ''Some people have wacky ideas. Like taxing gasoline more so people drive less. That's John Kerry.'' Although many environmentalists would have been delighted if Kerry had proposed that during the campaign, in fact the ad was referring to a 50-cents-a-gallon tax that Kerry supported 11 years ago as part of a package of measures to reduce the deficit. (The gas tax never made it to a vote in the Senate.) Kerry made no mention of taxing gasoline during the campaign; his proposal for doing something about high gas prices was to pressure OPEC to increase supplies.
Husseini, for one, doesn't buy that approach. ''Everybody is looking at the producers to pull the chestnuts out of the fire, as if it's our job to fix everybody's problems,'' he told me. ''It's not our problem to tell a democratically elected government that you have to do something about your runaway consumers. If your government can't do the job, you can't expect other governments to do it for them.'' Back in the 70's, President Carter called for the moral equivalent of war to reduce our dependence on foreign oil; he was not re-elected. Since then, few politicians have spoken of an energy crisis or suggested that major policy changes are necessary to avert one. The energy bill signed earlier this month by President Bush did not even raise fuel-efficiency standards for passenger cars. When a crisis comes -- whether in a year or 2 or 10 -- it will be all the more painful because we will have done little or nothing to prepare for it.
Peter Maass is a contributing writer. He is writing a book about oil.
Good for green energy? Market at Crossroads of Earnings and Oil
Sunday August 21, 5:00 pm ET
By Michael J. Martinez, AP Business Writer
At the Crossroads of Earnings and Oil, Stock Market Faces Difficult Decision in Week Ahead
NEW YORK (AP) -- Wall Street's gains from bullish second-quarter earnings are evaporating quickly in the face of near-record crude oil futures and increasing evidence that high gasoline prices are diverting consumers' dollars.
Because of that, the stock market faces a difficult decision in the week ahead. If investors believe oil will begin to seriously hurt economic growth, then some selling is in order. But if they believe corporate performance is strong enough to overcome energy prices, then holding and bargain-hunting will predominate.
Determining which camp will win depends largely on the price of oil. Crude futures declined for most of the week, though they spiked higher on Friday to settle at $65.35 -- shy of the previous week's record, but still quite expensive. The direction of crude futures will likely determine the week's trading.
And unfortunately, nobody is expecting oil to drop as sharply as it has climbed in recent weeks.
Last week, a spike in wholesale and retail prices -- blamed on high gasoline and energy costs -- shook the markets, with a spate of profit taking Friday blunting the week's losses. The Dow Jones industrial average fell 0.39 percent for the week, the Standard & Poor's 500 index lost 0.87 percent and the Nasdaq composite index dropped 0.99 percent.
ECONOMIC DATA
A big slate of economic data could help shed light on the state of the economy this week and, indirectly, the effect oil prices have had.
On Wednesday, the Commerce Department will report July's orders for durable goods -- big-ticket items designed to last at least three years. Durable goods orders are expected to drop 1.2 percent, compared to June's strong 2.8 percent rise. Since June was unexpectedly high, July's dropoff wouldn't be too surprising. However, if the drop is larger than expected, that may be due to consumers putting off big purchases in the face of higher gasoline prices -- a big negative for stocks.
The University of Michigan's consumer sentiment index will be another indicator of oil's effect. Surprisingly, economists expect this month's reading to come in at 92.7, on par with the previous report. However, with gasoline prices at record levels and continuing to climb, investors can reasonably expect this report to miss expectations.
The state of the booming real estate market will come into play earlier in the week. On Tuesday, the National Association of Realtors will report on July's existing home sales, which are expected to fall to an annualized rate of 7.25 million, down from 7.33 million in June. And on Wednesday, new home sales data from the Commerce Department is likewise expected to show a slight decline.
EARNINGS
With the bulk of second-quarter earnings reports finished, only a handful of companies will report results in the week ahead. But a pair of companies, both reporting Thursday morning, could provide some circumstantial evidence of the economy's resiliency.
With Wal-Mart Stores Inc. last week stating that high gas prices have cut into its customers' spending habits, investors will be looking closely at discount retailer Dollar General Corp.'s results. The company is expected to earn 21 cents per share, up from 19 cents in last year's quarter. Dollar General stock has dropped 17.3 percent from its 52-week high of $22.80 on Feb. 3, closing Friday at $18.85.
Toll Brothers Inc. has fared much better, surging 134 percent from its 52-week low of $20.615 on Oct. 5, 2004, to close Friday at $48.24. The poster child of the housing bubble, which has boasted of huge construction backlogs for its luxury homes, is expected to earn $1.20 per share for the quarter, up sharply from its 65 cents a year ago.
EVENTS
Federal Reserve officials will be speaking out on the economy and central bank policy this week, and their comments can sometimes shake the markets. Chicago Federal Reserve Bank President Michael Moskow will discuss the economy Wednesday night at the Illinois CPA Society's 25th Annual Business & Technology Solutions Show, and his comments could move stocks Thursday.
And Friday during the session, Fed Chairman Alan Greenspan will discuss central banking at an economic symposium in Jackson Hole, Wyo.
Hmmmmm, yet at the time it wasn't silly for some to predict that most of the gold mines in the world would want to buy KDS's to process their tailings or that Haliburton would have KDS's all over the world to process Zeolite. Maybe your posts will turn out silly too in the long run.
Am I being too negative?
Funny how the guys involved in a project are always positive about the project. I guess it helps one get up in the morning and go to work. Are the boys at HQ still excited?
"The results from the project, which is due to be completed in November 2005, will be fully disseminated throughout the industry. If they are positive, the impact on the industry could be significant, as Chris White, Commercial Manager at Aylesford Newsprint, explained:
"This project could address one of the major challenges facing the paper recycling sector and Aylesford Newsprint is excited to be part of the project team."
Next trip, does Cal sell shares before a trip or after a trip? If before, the last dilution may be for a trip soon!
Heck, I'm still waiting for the KDS to be hauled up the Beau Poo mountain! Did they get the road permits yet?
Sam, Green. eom.
Just visited their web site, one of the easiest to go through that I've seen in a long while, simple, but professional.
OT: GE's Green Growth Strategy
By Timothy M. Otte
May 10, 2005
(My thoughts, if the big boys are interested, then it should pay off for the small guys too.)
Monty Python fans will recall with relish the famous scene from The Holy Grail where the guardian of the bridge over the chasm of doom asks his questions three: What's your name? What's your quest? What's your favorite color? Michael Palin was indecisive about the third question, leading to his swift demise, but General Electric (NYSE: GE) CEO Jeffrey Immelt answered the question yesterday with authority: It's green.
Immelt spoke Monday at George Washington University in Washington, D.C., where he unveiled a company wide initiative dubbed "Ecomagination." The goal, Immelt said, is to "aggressively bring to market new technologies that will help customers meet pressing environmental challenges."
What's this, you ask? Has the world's largest company (in terms of market capitalization) gone crazy? Is the house that Jack Welch built being run by a bunch of fanatical tree huggers?
It turns out that GE is completely serious about green technology. The company is making a bet that what the world needs today is safer, cleaner, and more abundant sources of energy and water, delivered in a cost-effective manner. We've seen environmental initiatives from large companies in the past. From the feel-good commercials of BP (NYSE: BP) to Starbucks' (Nasdaq: SBUX) commitment to ecologically sound growing practices, the idea that corporate entities need to act responsibly is a growing theme in corporate governance today. Heck, even Wal-Mart (NYSE: WMT) is building energy-efficient supercenters.
But none of these initiatives comes close to the position that GE is staking out on environmental matters, namely that improving the environment is not only good for society but also good for business. Yes, GE intends to make the world a better place and reward its shareholders along the way. It views environmental initiatives as a key component of its future growth strategy and has set an aggressive goal of generating an incremental $20 billion in revenues from environmental initiatives by the year 2010.
Under the auspices of Ecomagination, GE has specifically committed to:
Double its R&D investment in clean technologies, to the tune of $1.5 billion annually by 2010.
Double its revenues from products and services that provide significant and measurable environmental-performance advantages to customers.
Reduce its greenhouse gas emissions substantially by 2012.
Keep the public regularly informed of its progress in meeting these goals.
The announcement that GE's "going green" may sound like a bolt from the blue, but the company has been discussing this initiative for about a year with customers, thought leaders, and employees around the globe. These discussions "crystallized the growing market demand for solutions to the challenges GE customers face," the company announced. GE has a long heritage of innovative product development and anticipating the world's changing needs, going back to founder Thomas Edison, who said, "I find out what the world needs, then I proceed to invent."
Amid this heroic vision of the future, investors may be asking whether GE's commitment to green and clean will ultimately be a bottom-line success. Will "green" lead to more green in the pockets of shareholders? Or are we seeing the birth of a new Don Quixote? It's too soon to tell. Clearly the company needs to tread this path for a while before we can begin to answer that question. But I wouldn't bet against it at this point. In a world that seems to get smaller every day -- marked by skyrocketing energy prices, urban sprawl, and continued population pressure -- it just feels right for the world's largest corporate entity to make a stand for something that goes beyond the bottom line. Socially conscious investors take note!
Learn more about GE with:
GE's Spring Cleaning
GE's Electrifying Prediction
Fool contributor Timothy M. Otte has high regard for both Monty Python and humpback whales. He owns shares of Wal-Mart, and welcomes comments on his articles. The Fool has a disclosure policy.
OT: GE: Bringing "Small" Things to Life
(Don't own any GE unless it's in one of my mutual funds, just put it on my watch list and interesting articles keep coming up on nano and green energy. Posting it here for those that think all major corporations are "bad" and spend R&D money to figure ways to screw people! LOL!)
(Note: $5 billion in emerging tech, $1 billion in green energy)
By Jack Uldrich
August 19, 2005
Earlier this year, General Electric (NYSE: GE) pledged to increase earnings at a double-digit clip in both 2005 and 2006. For a company with a market capitalization of $360 billion and annual revenues exceeding $160 billion, it was a remarkably bold prediction and clearly separated it from some of its more conservative competitors, including 3M (NYSE: MMM), IBM (NYSE: IBM), DuPont (NYSE: DD), and United Technologies (NYSE: UTX).
So far, the Connecticut-based company has backed up its prediction with admirable results. For the second quarter, total revenue growth was 13%, and 11 of its divisions reported double-digit growth.
The big questions: Will this growth continue? Does GE continue to represent a good long-term investment?
My answer to both questions is yes -- and, if you'll engage in a little "nanoimagination" with me, I think you'll see why.
GE's focus on nanotechnology
GE has publicly defined nanotechnology as the "ultimate material science," and in 2004, CEO Jeffrey Immelt was quoted as saying, "It's natural for us to begin to work on nanotechnology because, in essence, that is going to be the next generation of material science." Indeed it is, and the company is already busily pushing the development of a variety of nanotechnology-related advancements.
Last year, researchers at its world-class Global Research Center developed the world's best-performing diode from carbon nanotubes. And just yesterday, company officials announced that they created the "ideal" carbon nanotube -- one that operates at the best possible performance levels. The advance could very well usher in a new era in electronics and communications by making electronic devices even smaller and faster -- and make GE a formidable player in both fields.
Another application of the technology is next-generation advanced sensors. Sensors employing the carbon nanotube diodes could have unsurpassed levels of sensitivity and thus be very effective at detecting chemical and biological threats. The devices could also be incorporated into other new materials and lead to "smart skin" for advanced aircraft that would use the carbon nanotubes as tiny actuators to help planes modify their shape in response to changes in aerodynamics.
More near-term, stronger and lighter nanomaterials could be used to revamp and bolster GE Aviation Services' fleet of 1,600 aircraft. These advances could pit it against Lockheed Martin (NYSE: LMT), which is already partnering with NanoSonic, a small Virginia-based nanotech start-up, manufacturing nanocoatings and nanomaterials -- including something called "metal rubber."
A team of 50 GE scientists are also working on creating the next-generation super materials. These wonder materials may be able to do everything from helping microprocessors cool faster, to instilling new properties in plastics, and allowing jet engines to last longer and fly further on less fuel.
As exciting as these applications are, what I really like about GE is its ability to think big -- and think differently. The first area in which the company is applying these traits is energy, specifically "green" energy.
GE's green imagination
While it is true the company's "Ecomagination" initiative launched earlier this year stokes my more liberal "tree-hugger" sensitivities, it is the management's hard-headed, practical emphasis on market realities that make "clean energy" a viable strategy for improving the company's bottom line. And this is what ultimately appeals to my fiscally conservative tendencies.
Skyrocketing energy prices, growing concerns over greenhouse gas emission, and global climate change, as well as China and India's growing -- and nearly insatiable -- demand for energy, are all working in concert to create a massive economic opportunity for companies that can develop new, clean, and sustainable sources of energy.
On nearly every "clean energy technology" front, GE is racing to develop new alternatives -- and nanotechnology is well-positioned to help with every application.
For instance, nanoscale catalysts and nanofilters offer great promise in the creation of "clean coal" technology. New nanoscale materials will lead to both longer-lasting and more efficient wind turbines, as well as to more conductive ceramics that will facilitate the transmission of electrons across the transmission grid.
New nanomaterials will also yield better fuel cell membranes and move the much-heralded "Hydrogen Economy" one step closer to reality by yielding a more practical electrical-chemical conversion process.
Even solar cell technology is undergoing a radical transformation because of nanotechnology. The "ideal" carbon nanotube diode revealed yesterday may also possess unique photovoltaic (converting light into energy) capabilities that will make solar cells a more viable alternative in the energy market. Additionally, nanoparticles are now being combined with polymers to create flexible solar cells, and the efficiency of those cells is being dramatically improved by scientists' enhanced understanding of how photons can be harvested more efficiently through nanoparticles and quantum dots.
Opportunities in water and health care
The second "big" opportunity is water -- estimated to be a $400 billion annual business. Desalination is one possible option for increasing the world's water supply but, at the present time, it remains underutilized because of its high operating costs. If GE can develop new nanomaterials and/or a new nanofiltration process, the economics could change and allow the company to snag a much larger share of this lucrative market.
GE is also on the forefront of a third big trend: health care. Here again, GE's nanotechnology research and development is already yielding significant advances -- everything from new contrast agents for better MRIs to the creation of nanosensors that can detect cancer and other diseases at a very early stage.
GE's R&D should pay off
The final reason I am so enamored of GE and its long-term prospects relates to its R&D and its global presence. The company is currently investing more than $5 billion in emerging technology (with more than $1 billion alone in clean energy) and has dedicated nearly 2,000 scientists to finding new technological solutions to its customers' problems. This suggests that the company has not strayed from the advice of its founder, Thomas Edison, who said the key to success was to identify the world's problems and then find solutions to those problems.
Many of these researchers are located at GE's campuses in China and India. This is as it should be. Not only are these locations where much of today's global scientific talent resides, but they are also where the greatest problems -- and growth opportunities -- lie.
In the next three years, China alone is expected to invest $300 billion in its infrastructure to prepare for the 2008 Olympics. Much of this investment will be directed to energy needs, security, and transportation. GE is a major player in all of these areas.
When you couple these numbers with the 2 billion people in China and India who will continue to demand better access to better health care, it doesn't take even a small imagination -- let alone a "nanoimagination" -- to understand how GE still has the potential to bring a lot more good things to life. Not the least of which may be sustained double-digit growth for the foreseeable future. The patient, long-term investor could be well-rewarded.
Want to read more about GE or nanotechnology? Check out:
GE Knows Airplanes
A Giant Question for GE
GE's Green Growth Strategy
3M: Great at the Small Things
In Motley Fool Rule Breakers, we are constantly searching for emerging industries and companies, including nanotechnology. Join us by taking a free, no-obligation trial today. You'll get access to all our past issues, as well as our latest one.
Fool contributor Jack Uldrich has been accused by teachers and friends alike of thinking small since grade school. He is the author of The Next Big Thing Is Really Small: How Nanotechnology Will Change the Future of Your Business. He owns shares of GE, IBM, and 3M. The Fool has a disclosure policy.
TRCPA, you are probably right, a stock promoter would not bad mouth TA or mention "dumb money" chasing the price up. My bad.
TRCPA, after reading chambers' post again, it looks to me to have been written by a pump and dump stock promoter. Look at this and if you take FASC as an example with many "long and strong" shareholders, the MM's should not be able to control the pps as indicated in chambers' post.
"So how do investors somehow manage to overcome the
obvious deception in OTCBB arena? One answer is
indirection trading style by going long which the
MMs do not expect. In the war between investors and
public companies on the OTC BB / PS vs the MMs, if the
MMs have all the advantages due to position or
other factors, direct confrontation such as
momentum or day trading hitting the stock is a
definite death sentence."
Not very professional of Jim to say that about coming news, sure sounds like a pump and dump outfit to me. Is it OK if I email your post to Jim and ask him to fill me in too?
Waitedg, thanks for taking the time to share the newsletter info, it's much appreciated.
Bashers? Why would MM's want to discourage interest in a stock by employing bashers? MM's make money on the daily volume, they would rather see interest in a stock, get buyers and profit-taking sellers together. Isn't that common sense?
chambers52, good find. Do you think it's possible that the "chartists" that post on the OTC boards are MM's employees trying to get the stock "moving"? I recall lots of "positive money flow" and other TA posts that never did pan out on the pps trend.
However, what they do realize is a lot of dumb
money does use this newest niche charting or TA
(Technical Analysis) to run a stock either up or
down. To the MMs this is like taking candy from a
baby.
DNA sorts out nanotubes (looks expensive!)
3 December 2003
Scientists from DuPont, the University of Illinois at Urbana-Champaign and the Massachusetts Institute of Technology, all in the US, have used the self-assembly of DNA to sort carbon nanotubes according to their diameter and electronic properties. The technique could have applications in the processing of inorganic nanomaterials.
Nanotube fractions
“Spontaneous self-assembly of nucleic acid bases occurs on a variety of inorganic surfaces,” Ming Zheng of DuPont told nanotechweb.org. “This phenomenon, considered as an important prebiotic process relevant to the origin of life, has led us to seek a new function for nucleic acids in the manipulation of inorganic nanomaterials, where interfacial interactions dominate.”
Zheng and colleagues found that a specific single-stranded DNA - d(GT)n, where n=10 to 45 - self-assembled into a helical structure around individual carbon nanotubes in such a way that the electrostatic properties of the resulting hybrid depended on the nanotube’s diameter and electronic properties. As a result, the scientists were able to separate the nanotubes by anion-exchange chromatography. Early fractions from the process contained more smaller diameter and metallic tubes, while late fractions were enriched in larger diameter and semiconducting nanotubes.
“The separation of carbon nanotubes is the single greatest impediment to their technological application,” said Zheng. “Many attempts at nanotube separation have yielded only length sorting.”
Zheng believes that nanotube species obtained by the team’s separation process should enable applications such as nanoelectronics and biotechnology that require carbon nanotubes with defined electronic properties and band gap: the band gap of a semiconducting nanotube is inversely proportional to its diameter. “What’s more, fundamental physical and chemical studies of carbon nanotubes can now be conducted on materials with much better defined chemical identity,” he said.
The scientists are now aiming to improve the resolution of their technique and are working on scale-up. The researchers reported their work in Science.
About the author
Liz Kalaugher is editor of nanotechweb.org.
http://64.233.161.104/search?q=cache:GXuQ0YPshuMJ:www.nanotechweb.org/articles/news/2/12/1/1+Separat...
OT: Terry, I'm hoping God reads my post in detail, I don't see where I said anything about GE being "first"! I do think he may be pleased how some at GE are putting their God given brains (the first computer) to good use.
Suggestion, to cut down on posting time, I'll end my posts with "white" and you can respond "No, black"! I'll respond to your's in kind! LOL!
Doubloon, certain stock moves never cease to amaze me, but then I remember the old couple that called in to Clark Howard about Kmart, seems they put a good bit of their retirement savings into Kmart just before the bankruptcy because the stock was so "cheap". They couldn't understand why their shares were worthless after the bankruptcy. Sometimes people will pay $18.95 for a pet rock.