Oil Shale: opinions?

[whopper]

http://www.oilcrisis.com/shale/

I read this rather bullish (ahem it also may be bull-spit) article on oil shale.

I also got an email with a link to a company claiming it knows who'll get the permission to mine the land for oil shale.

http://www.stansberryonline.com/PRO...200608OIL-COL-49&o=401460&u=14437330&l=793724

Again, rather bullish (& bull spitish sounding) claims.

Then I thought to myself--is there any truth to this before I write it off? AFter all, I'm not oil shale expert.

Another thought is several investments I'm planning on, are bent on the notion that energy costs will remain high. For example, I'm planning on investing in silver & gold, alternative energies and foreign economies--all of which are based on the idea that the American Economy will remain relatively flat for the next few years.

But if there is any truth to these bulish claims--the American Economy would benefit from shale mining

So anyone here know anything about the subject? I've already read various naysayers on the web to oil shale. I'd like to hear opinions from someone who actually knows a thing or two about it for real.

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[etf]

yeah i don't know much about oil shale. but i figure if there's a new source of petroleum, anyone can extract it, but eventually valero is going to be refining it. thoughts?

 

[ncalcate]

http://www.oilcrisis.com/shale/

I read this rather bullish (ahem it also may be bull-spit) article on oil shale.

I also got an email with a link to a company claiming it knows who'll get the permission to mine the land for oil shale.

http://www.stansberryonline.com/PRO...200608OIL-COL-49&o=401460&u=14437330&l=793724

Again, rather bullish (& bull spitish sounding) claims.

Then I thought to myself--is there any truth to this before I write it off? AFter all, I'm not oil shale expert.

Another thought is several investments I'm planning on, are bent on the notion that energy costs will remain high. For example, I'm planning on investing in silver & gold, alternative energies and foreign economies--all of which are based on the idea that the American Economy will remain relatively flat for the next few years.

But if there is any truth to these bulish claims--the American Economy would benefit from shale mining

So anyone here know anything about the subject? I've already read various naysayers on the web to oil shale. I'd like to hear opinions from someone who actually knows a thing or two about it for real.

There's a lot of hype around these types of investments (ie, alternative energy companies, oil/gas exploration firms, etc.). As a general rule of thumb, I tend to stay away from these investments, having viewed all the hype that occured in the tech sector in 1998-2000. When there is a lot of hype around a particular industry, a lot of retail investors tend to get involved, sometimes artificially propping up prices. A little risky for my taste, but that's just my opinion.

Another way to play the whole energy boom is to look at pipeline and gathering companies. These are the companies that deliver the oil and gas from wells to refiners and other processing plants. What makes them less risky is they have little exposure to commodity prices. While they transport the oil/gas, they don't own it, and therefore don't have the risks/rewards associated with owning a commodity (gas/oil) that is flowing through their pipes. This allows you to profit from the increasing demand for oil and gas, regardless of whether oil is at $40 per barrel or $70 per barrel.

One of the big companies in this sector is Kinder Morgan Partners (KMP), but that is structured as a partnership, so it can get a little sticky tax wise. I am long on a smaller company called Crosstex Energy Inc (XTXI) and it has done quite nicely and has a large position in the Barnett Shale natural gas field.

Do your own due diligence. That's what I do when I'm not studying. Good luck.

Disclosure: I have a long postion in XTXI and other pipeline companies.

 

[whopper]

I did some more research on oil shale. Still nothing that has me 100% convinved either way. More like 90% vs 10%.

Okay--per wikipedia-oil shale can be turned into oil at a profitable price of $30 a barrel. So common sense would dictate that it would & could take over being that oil is about $70 a barrel now. The articles I've read state the $30 isn't just production cost. It would be profitable at $30.

But the thing that still has me not convinced is the Wikipdedia article also mentions that the same was attempted in the late 70s--and it was a bust. All investors lost their money. It was also tried in Australia and was a bust. One article I read cited that even if the infrastructure was put into place, it'd take decades before the shale could effectively be turned into oil. Another mentioned that the environemtal dangers would be tremendous, and yet another mentioned that the local inhabitants are willing to put up a fight to prevent it from being made because of the potential environmental concerns.

Shale to oil--to clarify--according to the articles I read (and I do not claim to be an expert) is much more environmentally harmful because its not simply drilling. Its mining, then producing a combistable chemical reaction that takes the oil out of the shale--which would yield sigificant smoke and toxins into the air.

So---ok I am convinced that such a thing can happen, but will it to the point where I should change my current investment strategy? I'm not certain.

Again--this is more of a 90 vs 10% thing based on all the research I could muster, and several of the sources I'm not sure I trust. (90% for keeping the strategy the same, 10% for changing it).

 

[Jocomama]

Nice to speculate, but unless you have personal experience with this - why mess around>

I had some UBS financial guy tell me today about his mutual funds. I laughed.

I will pose a few simple questions:

1) What was the price per barrel of oil 4 years ago?

2) What happened over the last 3 years with Ballard and some other companies that have been developing the wonderful fuel cell?

3) How has Brazil done in the last 3 years with their ethanol production and profit?

I bet my friend that oil will be at $30/barrel within 2-3 yrs.

Oil Shale............ And they said the Wright brothers were crazy, huh?

I did some more research on oil shale. Still nothing that has me 100% convinved either way. More like 90% vs 10%.

Okay--per wikipedia-oil shale can be turned into oil at a profitable price of $30 a barrel. So common sense would dictate that it would & could take over being that oil is about $70 a barrel now. The articles I've read state the $30 isn't just production cost. It would be profitable at $30.

But the thing that still has me not convinced is the Wikipdedia article also mentions that the same was attempted in the late 70s--and it was a bust. All investors lost their money. It was also tried in Australia and was a bust. One article I read cited that even if the infrastructure was put into place, it'd take decades before the shale could effectively be turned into oil. Another mentioned that the environemtal dangers would be tremendous, and yet another mentioned that the local inhabitants are willing to put up a fight to prevent it from being made because of the potential environmental concerns.

Shale to oil--to clarify--according to the articles I read (and I do not claim to be an expert) is much more environmentally harmful because its not simply drilling. Its mining, then producing a combistable chemical reaction that takes the oil out of the shale--which would yield sigificant smoke and toxins into the air.

So---ok I am convinced that such a thing can happen, but will it to the point where I should change my current investment strategy? I'm not certain.

Again--this is more of a 90 vs 10% thing based on all the research I could muster, and several of the sources I'm not sure I trust. (90% for keeping the strategy the same, 10% for changing it).

 

[whopper]

I wouldn't write off oil shale for oil production. Several people believe for valid reasons that the price for oil will not go down unless new sources of energy are found.

In the past oil prices would go skyhigh due to geopolitics, not because there wasn't enough to go around.

Now its because there's not enough to go around--because India & China are using it much much more and because the middle eastern countries are now counting to bank on their finite supply.

Brazil--and I'm not an expert--I've heard their ethanol conversion is much better than it'll be in the US because they use sugar cane which produces much more units of energy per unit of land used. We in the US cannot feasibly use sugar cane because our climate is colder. Our next best crop--corn is not as feasible, plus add on to that, Americans are spoiled and don't comply with government attempts to change the market unless it severely hurts their wallet (now this last paragraph I'm not certain on. I obtained my info from several business journals without verifying what their sources were.)

I've done more research and I'm convinced now that the oil from oil shale thing will probably be a viable source of energy but not for years.

Anyways--reason why I'm considering this now is not so much becasue I want to invest in it, but because my current investment strategy is based on the notion that the US economy will not do well, largely due to increased prices of oil (among several other reasons--terrorism, war in Iraq, etc).

So even if I were to put nothing into investing into companies that would take oil from oil shale, my current investments bank on it from being a feasible source of energy for the next few years. E.g. precious metals, alternative energy, foreign investments.

 

[Jocomama]

Go ahead and invest in Oil Shale
I have no opinion on it.

I wouldn't write off oil shale for oil production. Several people believe for valid reasons that the price for oil will not go down unless new sources of energy are found.

In the past oil prices would go skyhigh due to geopolitics, not because there wasn't enough to go around.

Now its because there's not enough to go around--because India & China are using it much much more and because the middle eastern countries are now counting to bank on their finite supply.

Brazil--and I'm not an expert--I've heard their ethanol conversion is much better than it'll be in the US because they use sugar cane which produces much more units of energy per unit of land used. We in the US cannot feasibly use sugar cane because our climate is colder. Our next best crop--corn is not as feasible, plus add on to that, Americans are spoiled and don't comply with government attempts to change the market unless it severely hurts their wallet (now this last paragraph I'm not certain on. I obtained my info from several business journals without verifying what their sources were.)

I've done more research and I'm convinced now that the oil from oil shale thing will probably be a viable source of energy but not for years.

Anyways--reason why I'm considering this now is not so much becasue I want to invest in it, but because my current investment strategy is based on the notion that the US economy will not do well, largely due to increased prices of oil (among several other reasons--terrorism, war in Iraq, etc).

So even if I were to put nothing into investing into companies that would take oil from oil shale, my current investments bank on it from being a feasible source of energy for the next few years. E.g. precious metals, alternative energy, foreign investments.