Energy Review
Brian Trumbore
President/Editor, StocksandNews.com

When it comes to energy, there is no shortage of material. I have a large folder of articles and charts that I clip out, daily, and the only way to make a dent in it is to start writing. I'll do my best to place this in some semblance of order and from time to time over the coming months I'll update the statistics.

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World Oil Demand, 4th Quarter 2005, millions of barrels a day

United States???..20.79 mmbd
North America other?4.74
Europe??????16.59
Japan???????5.53
South Korea????.2.24
Pacific other????.1.09
Former Soviet???..3.86
China??????....6.90
India???????.2.63
Asia other?????.6.19
Brazil??????....2.20
Latin America other?.2.79
Middle East????..5.94
Africa??????...2.93

World??????..84.43

[International Energy Agency]

Remaining Reserves

[Number of years that remaining reserves would last were production to continue at the current level.]

Iraq????more than 100
Kuwait?.......more than 100
UAE???..more than 100
Iran?????88.7
Kazakhstan??83.6
Venezuela?.....70.8
Saudi Arabia.....67.8
Libya???.....66.5
Nigeria???..38.4
Russia????21.3
U.S. ????..11.1

Global proved oil reserves?2004 share

Saudi Arabia?.22.1%
Iran????....11.1
Iraq?????..9.7
Kuwait???.....8.3
UAE????....8.2
Venezuela??...6.5
Russia????.6.1
Other????.28.0 [including U.S., Canada, Mexico, Libya, Nigeria]

Major importers of Russian natural gas, 2004?Russia's share of imports?ranked by volume

[As Russia increasingly plays the energy card]

Germany???.....41%
Italy??????.34
Turkey????.....80
France???.........31
Hungary????..85
Poland???.........87
Slovakia??........100
Czech Republic?..73
Austria?????77
Finland????..100

[BP Statistical Review of World Energy]

--OPEC members: [Ranked in terms of production?.though in the case of Iraq it is anywhere from 3rd to 6th most months. Iraq is also normally excluded from official OPEC production targets as stated by the cartel.]

Saudi Arabia, Iran, Iraq, UAE, Kuwait, Nigeria, Venezuela, Libya, Algeria, Indonesia, Qatar

--Daniel Twining / The Weekly Standard:

"The CIA forecasts that 'growing demands for energy' will have 'substantial impacts on geopolitical relations' in coming years. The need for energy increasingly will be 'a major factor' shaping the foreign policies of key states. Total energy consumed globally will rise by 50 percent over the coming two decades, most of it in the form of oil and natural gas. To maintain growth, rising powers like China and India will need to double or triple their energy consumption. The European Commission estimates that Europe's requirements for imported energy will rise from 50 percent of total demand in 2000 to nearly 70 percent in 2020, with gas imports increasing most rapidly.

"Russia today is the world's largest exporter of natural gas and second-largest exporter of oil, after Saudi Arabia. Russia also possesses vast, untapped oil and gas reserves, which dwarf sources of supply in the Americas, Europe, and Asia outside the Middle East. The CIA predicts that 'Russia?will be well positioned to marshal its oil and gas reserves to support domestic and foreign policy objectives.'"

--Russia's Gazprom holds 16% of the world's proven gas resources and accounted for a fifth of global gas output last year. It supplies a quarter of Europe's gas.

[Gazprom, Reuters, UFG, Wall Street Journal]

--This may be stating the obvious, but anyway:

"Even if Middle Eastern states do develop their oil resources, the IEA said it is uncomfortable with growing dependence on the region's energy. 'This is not a sustainable energy future,' Fatih Birol, the IEA's chief economist and principal author of the study, said in an interview. In the group's so-called reference scenario, in which countries invest as recommended by the IEA, 'we are ending up with 95% of the world relying for its economic well-being on decisions made by five or six countries in the Middle East.' [I'd add Venezuela]

"In the past 30 years, Mr. Birol said, there have been 20 oil- supply cutoffs of more than 500,000 barrels a day - 17 of them in the volatile Middle East?

"The IEA also expressed anxiety about the effects on the climate of the growing use of hydrocarbons. Carbon emissions, which are thought to contribute to global warming, are expected to rise by 50% in the next 25 years."

[Selina Williams and Bhushan Bahree / Wall Street Journal]

--Venezuela: President Hugo Chavez vows to stay in power until 2021. "Critics say his shakeup (of the economy) may redistribute income from the rich and middle classes to the poorest, but the spending won't be sustainable if oil prices tumble. 'With oil prices this high, Chavez doesn't need investment,' [says one expert] 'but if they drop by $15 or $20 [a barrel], there will be problems.' Annual foreign direct investment has fallen from $5 billion in 1998 to $1.5 billion last year [2004] according to Central Bank figures."

[Stephen Ixer / Business Week]

--Iran's production, currently 4 mmbd (exports?2.7 mmbd), peaked at 6 mmbd prior to its war with Iraq.

--Japan: "Most of Japan's oil is shipped through two sea lanes: one directly south of Taiwan and another farther south, which increases the shipping length by a costly two days.

" 'If you assume conditions are balanced now,' said Adm. Koichi Furusho, the former chief of staff of Japan's Maritime Self- Defense Forces, 'they would collapse as soon as Taiwan unifies with China. The sea lanes would turn all red.'"

[Howard French and Norimitsu Onishi / New York Times]

--China imports 14 percent of its oil from Iran.

--In 1994, there were 9.4 million vehicles on the road in China. In 2004, there were 28.6 million vehicles. In 2020, the Chinese government predicts there will be 140 million.

--Canada's oil sands produce about one million barrels a day, a figure which is supposed to triple to 2.7 mmbd by 2015. [The average cost of production here is $22 to $25. Labor costs are a big factor given Alberta's tight job market.]

[Tamsin Carlisle / Wall Street Journal]

--"The full extent of the Gulf of Mexico energy infrastructure is hard to grasp. Altogether, about 800 manned platforms, plus several thousand smaller unmanned platforms, feed their oil and gas into 33,000 miles of underwater pipelines, a good part of which eventually reaches shore at Port Fourchon at the mouth of the Mississippi. That adds up to 35% of domestic oil production (including oil from state as well as federal waters) and over 20% of our natural gas coming from off-shore. Add to that the 10% of U.S. oil imports that flow in through the same corridor, plus the string of refineries and pipeline networks that sprawl along the Gulf Coast, and you have a complex that constitutes our single most important energy asset."

[Daniel Yergin]

--The Arctic National Wildlife Refuge would by most conservative estimates supply the U.S. with one million barrels of oil per day, or 5% of our current usage.

--The Strategic Petroleum Reserve in the U.S. currently holds about 690 million barrels of oil, near its peak.

--The 5 Greatest Risks to U.S. oil supply, according to Daniel Yergin of Cambridge Energy Research Associates:

1) The collapse of Saudi Arabia, through a coup against the royal family or destruction of oil fields.

2) Political instability in Venezuela or other major oil-producing nations - or another U.S. war.

3) Natural disaster, such as a hurricane or an earthquake.

4) Terrorism or accidents that destroy a refinery or major oil pipeline.

5) Increased competition from China and India.

[Parade magazine]

--OPEC supplies the United States with about 33% of our imports. [Roughly 5 million barrels a day.]

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Note: Last week I did a piece on advertising in the 1940s and said I couldn't believe the gas mileage figures in those days for the Studebaker?generally mid- to upper-20s per gallon. So this elicited a response from a good friend of the family, Fred S.

"I do recall a trip with the folks in a 1950 Mercury from Iowa to Michigan. I believe we got 21-22 mpg. The 1950 Mercury was a much heavier car than the 1941 Studebaker but it also had overdrive. Dad drove 60-65 mph so it might be possible with a lightly loaded Studebaker at 50 mph to get numbers like those quoted in the ad. By today's standards, the car was underpowered and had no comfort options (AC, PS, PB, etc.) but it had an 'economy' orientation. Maybe the ad isn't that far- fetched!"

Fred adds that gasoline in those days was around 19 cents a gallon.

Wall Street History will return next week. More on energy; the past, present and future.

Brian Trumbore