The Kochs & the XL Pipeline

"I want my fair share – and that's ALL OF IT."
By Greg Palast for Vice Magazine
Thursday, February 14, 2013
http://www.gregpalast.com/i-want-my-fair-share-and-thats-all-of-it-the-kochs-the-xl-pipeline/

Bobby Kennedy, my partner in these investigations, is a contributor to Billionaires & Ballot Bandits: Greg Palast investigates Karl Rove, the Koch Gang & their Buck Buddies, the book on which this report is based.

According to the transcript of the secretly recorded tape, Charles Koch was chuckling like a six-year old. Koch was having a hell of a laugh over pilfering a few hundred dollars' worth of oil from a couple of dirt-poor Indians on the Osage Reservation.

Why did Koch, worth about $3 billion at the time (now $20 billion) need to boost a few bucks from some Indian in a trailer home? Koch answered:

"I want my fair share – and that's all of it."

Now "all of it" includes a pipeline, the Keystone XL, which would run the world's filthiest oil, crude made from tar sands, down from Canada to his family's refinery on the Gulf Coast of Texas.

This is Part 2 of "The Koch Brothers, Hugo Chavez and the XL Pipeline." Part 1 explains that the Koch Oil refinery can only "crack" heavy crude from Venezuela—which costs $33 a barrel more than tar sands heavy oil. But Canada's cheap crude cannot get to Texas without a new, giant pipe. XL would save the Kochs nearly $3 billion a year.

Problem: the Keystone XL tar-oil tube would endanger the largest US water sources, vastly increase pollution in the USA and measurably heat the planet.

Solution: Congressman Tim Griffin.

Congressman Griffin is sponsoring the bill to force the Obama Administration to approve the XL Pipeline without the environmental review now required by law.

What's odd is that Griffin represents Arkansas, a state with no stake in the Pipeline.

But the Kochs have a stake in Griffin. In his maiden run for Congress, Griffin was elected with an eye-popping $167,000 donation from the Kochs. For $167,000, any congressman will wash your car – with their tongue.

For the Kochs, $167K is peanuts. Their political action operation, Americans for Prosperity, built a quarter billion dollar fund this past year, a sum never seen even in the US politics cash swamp.

Global Warming Denial as a Profit Center

To answer the concerns about global warming raised by the XL and the Kochs' oil business, the billionaire brothers have bankrolled a gold-plated campaign of global warming denial.

For example, Americans for Prosperity funded "Hot Air Tour" rallies across the US with the slogan, "Global Warming Alarmism: Lost Jobs, Higher Taxes and Less Freedom." More rallies were held by the Koch-funded FreedomWorks, a foundation which has seized control of the Tea Party movement—and redirected populist rage against plutocrats. FreedomWorks transformed the Tea Party into a used tea bag, dangling from the Kochs' string.

Break the Law then Re-make the Law

States on the pipeline's route could block the Keystone XL, but the crucial extension will originate in Oklahoma where the Kochs have cowed all resistance to their needs.

The Kochs' power to terrorize politicians in Oklahoma and the West originates in that case of Osage tribe's missing oil.

FBI agents filmed Koch Oil men pilfering the crude, had witnesses to Koch's directives to siphon the oil, and more. The US Justice Department drafted a criminal indictment of Koch Industries and Defendant "67C" (reportedly Charles Koch himself) for "Crime on an Indian Reservation" and racketeering, big-time jail-time offenses.

That's when Koch Oil drilled down and struck Bob Dole, the nation's most powerful Senator, the Republican Majority Leader.

Dole (representing Kansas), joined by a Koch-funded Senator from Oklahoma, Don Nickles, had the federal prosecutor who brought the case fired. Case closed except for a few million paid to the Osage for some of their stolen oil.

Dole ran for President using Koch money given to Dole's not-for-profit foundation. It was a cheap buy for the Kochs because it was illegal – so Dole, when caught, had to give it back.

But one Senator wouldn't let the oil theft go: Dennis DeConcini, chairman of the Senate Special Committee on Investigations whose report concluded, "Koch Oil is the most dramatic example of an oil company stealing by deliberate mismeasurement and fraudulent reporting."

The Kochs didn't like that. And when the Kochs don't like something, or someone, it's notably more serious than a ‘thumbs down' on your Facebook page. In 1996 (yes, I've been investigating the Kochs for that long), DeConcini told me the Kochs warned him that if he published and stood by the Senate's and the FBI's findings, the Kochs would destroy the Senator's political career. They did.

Then there was the matter of the 97-count criminal indictment of Koch Oil for dumping poisonous crude sludge into rivers in six states. The Kochs didn't merely want to beat the rap—they wanted to continue dumping.

That would require buying a whole new Congress. No problemo, Pardner. In 1996, Koch Industries, through a fake front called Coalition for our Children's Future, secretly funded millions of dollars in vicious attack ads against vulnerable Democrats just days before the election.

As a result, Republican Newt Gingrich kept his post as Speaker of the House of Representatives. Gingrich pushed an agenda he called "The Contract with America", which would eliminate criminal sanctions for pollution and slash rules against polluting. The Center for Public Integrity said it "seems to have been drafted and designed for Koch interests."

Wrong. The Contract was drafted by the Kochs and crafted at the Heritage Foundation, a think-tank the Kochs founded.

Bill Clinton's Administration, though nominally Democratic, went easy on Koch interests. Vice-President Al Gore especially, head of the Reinventing Government Commission, attacked regulations with more verve than Ronald Reagan or Margaret Thatcher. Gore's anti-regulation guidebook was the "Mandate for Change" drafted by the Democratic Leadership Council. It was the DLC that had launched the career of the previously unknown Bill Clinton, its first chair, and Al Gore's career as well. The DLC was created with $100,000 of Koch money.

The Kochs use of fronts for corporate donations to politicians was plain illegal—until, in 2010, the US Supreme Court decriminalized this game in the Citizens United case. The lawyer for Citizens United is Ted Olson, whose day job is representing Koch Industries.

Note: The Kochs are bi-partisan employers. They also retain lawyer Bob Strauss, former Chairman of the Democratic Party.

The Themis Machine

As if their billions, their think tanks, lawyers, fronts and political action fund were not enough to scare the bejeezus out of politicians, there is Themis. Themis, created by the Kochs, is the nation's most sophisticated, detailed database on every American living, surpassing the most demonic dreams of the FBI.

Themis, for example, knows the last time you, Jack, downloaded porn.

Given their power and their Themis, is it really possible for a few greenies and some fact-afflicted scientists to stop the Kochs from jamming their pipeline right up our aquifers?

Absolutely. Indeed, that's the only way it will be stopped, because the Kochs have already put the politicians in their pipe and smoked them.

Palast is the author of the New York Times bestsellers Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps, The Best Democracy Money Can Buy, Armed Madhouse and the highly acclaimed Vultures' Picnic, named Book of the Year 2012 on BBC Newsnight Review.

Visit the Palast Investigative Fund's store or simply make a contribution to keep our work alive!

CHAVEZ: HE WON'T SELL OIL TO THE KOCHS

HUGO CHAVEZ TOLD ME HE WON'T SELL OIL TO THE KOCHS
Greg Palast
http://www.vice.com/en_uk/read/koch-brothers-hugo-chavez-and-the-xl-pipeline

I’ve been tracking a tube of black putrid ooze, a toxic viper slowly slithering 2,000 miles across the belly of America, swallowing all water aquifers, politicians and reason in its path.

The XL Keystone Pipeline.

As Nagini, the murderous snake in the Harry Potter tales, had its master Voldemort, I figured the Keystone XL Pipeline must also have its own dark lords.

And the Dark Lords of the Keystone Pipeline left clear clues: environmental horror, political payouts and the odour of sulphur stronger than explained by the stinking hot tar inside it. I smelled Koch.

David and Charles Koch are each worth $20 billion (£12.7 billion), and they’re quite certain that’s not enough. And so they need the XL Keystone Pipeline.

The XL Keystone will take Canadian tar-sands oil, the filthiest crude on the planet, and suck it down to Texas’ Gulf Coast refineries. Alberta’s oil-glop reserve, if it can get to the US market, will warm the planet by nearly 0.4°C all by itself.

Why in the world would America pistol-whip Mother Nature to bring oil to Texas? I mean, it’s just plain weird to suck heavy tar oil out of Canada to drag it across the entire middle of the USA and import it into the oil-exporting Lone Star State.

Here’s where a little lesson in oil chemistry comes in. You can’t just throw any old crude oil into an oil refinery. These giant filth factories are actually quite sensitive. The refineries of the Texas Gulf Coast are optimised for heavy crude.

It would cost billions of dollars to rebuild the giant Flint Hills Corpus Christi Refinery, owned by Koch Industries, to use the less-polluting Texas oil drilled nearby.

The Kochs need heavy crude. But the Brothers Koch have a problem. Heavy crude is controlled by a heavy dude – President Hugo Chavez of Venezuela.

In case you haven’t heard, the US Department of Energy now says Venezuela, not Saudi Arabia, has the world’s largest petroleum reserve – including the overwhelming bulk of the planet’s heavy crude.

And Chavez is not giving it away. “We are no longer an oil colony, Mr Palast,” Chavez told me during one of our meet-ups in Caracas.

He wasn’t kidding. Venezuela’s export price now averages around $100 (£64) a barrel.

So the Kochs have turned their gaze upward – to Canada, where Alberta oil men are selling their tar-sands gunk for a whopping $33 (£21) a barrel less than Chavez’s heavy. Do the maths: With 289,000 barrels a day refined at Corpus Christi, switching from Venezuela heavy to Canadian tar could put an extra $3 billion (£1.9 billion) a year into the pockets of the Kochs.

However, there’s a problem. Between Canada and Houston is the United States. At the moment, there’s no pipeline that can take all that cheap crude south. The southbound pipeline network now chokes at Cushing, Oklahoma, which is already blocked with 47 million barrels of crude sitting in storage tanks with nowhere to go.

So all the Kochs have to do is get the US government to agree to pop a pipe through Cushing to Houston: the Keystone XL. But that would require that the US government go stark raving mad, commit environmental suicide and reverse all policy to slow global warming – all to bring in foreign oil while the US itself is suffering from a major oil and gas glut.

Furthermore, approving the Keystone XL Pipeline will raise the price of heating oil and gasoline in the US.

Let me repeat: Approving the Keystone XL Pipeline will raise the price of oil and gasoline.

This is the nasty little secret of the pipeline lords and unknown to all but experts. Every Republican politician and not a few Democrats have promoted the fairy tale that the XL Pipeline will reduce gasoline and oil prices throughout the USA.

It’s bullshit, but it’s gospel – utterly unquestioned by the mainstream media. Most official opponents of the pipeline buy the lower-cost-oil line, repeating variants of the New York Times editorial that the economic “benefit from Keystone XL outweigh the certain damages” to the environment.

But the “benefit” is bogus. Prices for gasoline will rise by about 15 cents (nine pence) a gallon in the Upper Midwest if the pipe opens.

Here’s why. Normally, the supply of crude oil in the US doesn’t have a damn thing to do with the price of gas you put in your Humvee. Normally, Canadians could hose us down with hot tar and it wouldn’t change oil and gas prices by a penny.

That’s because the international price of oil is not set by supply and demand in the marketplace. Rather, the price is fixed by a dictator in a bathrobe, Abdullah, King of Saudi Arabia. He dictates, you pay.

But there are always anomalies.

As matters stand, with nowhere to dump their tar goo, Canadians have to sell at a $33 (£21) a barrel discount to nearby refineries in the US Upper Midwest.

American consumers are getting the benefit of this oil backup. Indeed, one angry Canuck, Cenovus Energy CEO Brian Ferguson, complains that the pipeline plug results in "subsidisation to the United States consumer by $1,200 (£764) per Canadian".

The XL Pipeline would act as an oil enema, releasing the impacted inventory, enriching the Gulf refineries.

The result of opening the spigot through the XL Keystone will mean that US Midwest retail heating oil prices will skyrocket and gasoline in the region, as the crude drains away to other refineries, will rise an estimated 15 cents a gallon.

True, cheaper crude oil will now flow south, but as Canadian economist Robyn Allan writes, “It's the refining sector that sees the benefit of lower-priced WCS [West Canadian Sands oil] in the form of windfall profits from low feedstock costs.”

The gusher of cheap crude from a new pipeline will enrich the refiners – none more so than refiners named Koch.

But how will the Kochs get Obama and the US government to turn against US consumers and their own green policies and promises? We'll get to that next week.

I’ve been tracking the Kochs for 18 years, first as a private investigator on a case of oil missing from a Native American Indian reservation.

One thing from that case sticks with me even today. The trail of missing oil led to Charles Koch himself, who (according to a secret recording), told a co-conspirator why he did it. The billionaire said,

“I want my fair share. And that’s ALL OF IT.”

And "all of it" now includes a pipeline filled with hot, cheap oil.

Can Leak Detection End the Pipeline Impasse?

Interview with Adrian Banica
James Stafford | Thu, 07 February 2013
http://oilprice.com/Interviews/Can-Leak-Detection-End-the-Pipeline-Impasse-Interview-with-Adrian-Banica.html

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more.

Pipelines used to be things that were just built without blinking. It is said that there are enough pipelines now in the US to encircle the Earth 25 times with enough left over to also tie a bow around it. Today, getting a pipeline built is not so easy - there are too many environmental concerns and the industry has become highly polarized. But here’s one thing that could bring everyone together: pipeline safety technology. And it’s something we all want, especially for those who live along the thousands of miles of aging pipeline routes that carry hazardous liquids.

Spawned by research that started in space, remote-sensing technology designed to detect dangerous leaks in pipelines has the potential to provide the neutral ground for decisions to be made and consensus to be formed. The clincher: This technology is not only affordable -it saves money and could eventually save the industry.

Three Ideas for Energy Investors to Look Into

In an exclusive interview with Oilprice.com, Adrian Banica, founder and CEO of Synodon - the forerunner in leak detection systems - discusses:

•    How a technology that started in space has the potential to quell intensifying protests
•    Why Keystone XL will eventually be a reality - sooner rather than later
•    How remote sensing technology can fingerprint pipeline leaks
•    How remote sensing technology can find the little leaks before they become big leaks—at no extra cost
•    Why North America’s new pipelines aren’t the problem and why the focus should be on aging pipelines that are going to experience a lot more leaks
•    How this technology could bring the industry and environmentalists together
•    How external leak detection can save lives in high-risk areas

Interview by James Stafford of Oilprice.com

James Stafford: Now that pipelines are the hottest topic on the oil and gas scene and have found themselves on the frontline of conflict between environmentalists and the industry, high-tech leak detection systems such as Synodon’s remote sensing technology seem to be offering a way out of the chaos. Can you put this into perspective for us?

Adrian Banica: Yes. In North America alone, there are upwards of a million kilometers of transmission pipelines - and this does not even count the gathering and distribution pipelines. What we offer is attractive to both sides in this conflict: environmentalists want it and the industry can afford it.

Methods for inspecting pipelines have existed for many decades. What we’re providing is a better way of doing it. Synodon’s technology offers an accurate and precise method of oil and gas leak detection. This technology detects small leaks before they become big leaks.

James Stafford: In layman’s terms, how does it work?

Adrian Banica: It is relatively simple. Synodon has developed a remote sensing technology that can measure very small ground level concentrations of escaped gas from an aircraft flying overhead. This “realSens” technology is mounted on a helicopter and piloted by GPS over a pipeline.

Think of this gas sensor as a big infrared camera that is particularly adept at detecting very, very small color changes in the infrared spectrum. The color changes that we detect are caused by various gasses that the instrument looks at. Every gas in nature absorbs and colors the infrared light that passes through it in a very specific way. From the shade of the color, we can also infer how much methane or ethane we can see with our instruments. In effect, it’s like a color fingerprint of the gas.

James Stafford: Can you give us a sense of how this technology has evolved into what it is today—essentially the potential tool for bringing environmentalists and industry leaders together over the pipeline issue?

Adrian Banica: Yes. It started in space. Back in the 1990s, I was aware of technology being developed for various space programs, including Canada’s and NASA’s. I was looking for technologies that could solve oil and gas problems, but that were also novel, unique. That is how the whole idea started: It was matching a technology that the Canadian Space Agency funded to develop an instrument that measured carbon monoxide and methane from orbit.

So the idea then was if one can detect methane from space, why couldn’t we adapt that technology to detect methane by flying it on a plane? In 2000, I founded Synodon in order to monetize and commercialize this.

James Stafford: How effective are automated leak detection systems?

Adrian Banica: They are typically only able to detect high level leaks above 1% of the pipeline flow. They measure the volume of the product that passes a sensor (flow measurements) and the pressure in the pipeline--if there is a leak the pressure will be lower downstream from it, among other things. However, as a recent report from the Department of Transportation in the US points out, these systems only detect a leak at best about 40% of the time, irrespective of how big a leak is.

It is also important to differentiate between catastrophic leaks and small leaks. For catastrophic leaks, most pipelines use these flow meters which operate 24/7. But smaller leaks can only be detected by performing an above-ground survey either by foot patrol, vehicle or aircraft. The predominant technologies used would be sampling gas sensors, thermal cameras, laser detection or our remote sensing system.

James Stafford: So this remote sensing technology uses a sort of “fingerprinting” to detect leaks, but we understand that it has much more to offer the industry …

Adrian Banica: Yes. The core offering is the technology we developed for natural gas and liquid hydrocarbon leak detection, but there is a basket of services designed to reduce the overall costs for our clients. During our leak detection surveys, we collect a lot of different types of data such as visual images, thermal images and very, very accurate GPS information. We’ve repackaged all those data sets into new value-added products. We can provide these extra services without incurring additional costs.

For instance, we could offer some of those services for new construction, in which case it would speed up the process of getting all the information required for the necessary regulatory filings.

The most important thing, as I mentioned earlier, is trying to find small leaks before they become large leaks. All our services and all the data we provide are geared towards preventative maintenance. We sought to add services beyond leak protection because all pipeline operators still need to get their other data sets from somewhere. We are consolidating everything they need in a very cost effective and efficient manner.

James Stafford: A late-2012 study on leak detection by the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) has brought this subject to the forefront. Dr. David Shaw, one of the report’s authors, says that pipeline leaks, ruptures, and spill are “systematically causing more and more property damage…in bad years you have $5 billion in damages due to pipeline-related accidents”. The logic of the study is that pipleline operators could be spending 10 times more on leak detection given what kind of damages they are being awarded now.

Adrian Banica: Yes, the study makes the most valid point here, and that is that leak detection systems represent a bottom line savings, not an expense. For instance, Dr. Shaw has pointed out that pipeline companies would likely be justified in spending $10 million per year for every 400 miles of pipelines because they are already spending more than that on public property damage.

We have demonstrated that we can detect a leak that is less than 1 liter/min or 380 gallons/day. If our technology was deployed every 30 days and the leak were to happen in the middle of this period (on average), the total spill would be 5,700 gallons (380x15 days), which is 50 times smaller than the standard technology daily leak rate. That’s a huge difference.

Another difference is that pipeline operators pay around $12 per hour to have personnel walk the pipeline, and they can only catch leaks that are close enough for them to see.

James Stafford: Could leak detection systems also save lives?

Adrian Banica: Yes. The PHMSA study points out that 44% of these old hazardous liquid pipelines are in High Consequence Areas (HCAs)—which means that peoples’ lives are at risk if they blow up. We’re talking about 44% of over 170,000 miles of these pipelines. On a public platform, this alone should lend a new urgency to the leak detection debate. The point is that remote—or external—sensors can head off a dangerous leak faster than an internal system.

The challenge then is to convince pipeline operators to adopt external technologies that actually detect leaks rather than relying on the inconsistencies of visual detection, which sooner or later would see the pools of oil, but it might be a while.

James Stafford: Is the market ready for this technology?

Adrian Banica: The market is ready, but not necessarily because of leak detection—it’s the overall basket we discussed earlier.

There is a tremendous need in the industry for remote leak detection. But we had to account for budget constraints within our potential clients. We think we’ve developed a technology that’s very capable of providing the information our customers are looking for and doing so at a competitive price they are willing to pay.

We’ve been operating on the North American market for the last 2.5 years. It’s a very large market that has lately been in the eye of the media and the environmentalists. We’re talking about over 55 companies in Canada and almost 700 pipeline operators in the US, where some 100 companies operate or control roughly 80% of the pipeline infrastructure. It is also a regulated market, and regulators require operators to perform some level of leak detection surveys.

James Stafford: Will Keystone XL—or the San Bruno pipeline explosion—have any notable impact on the regulatory environment or the market for remote sensing technology?

Adrian Banica: Personally I don't think that either of these will impact the leak detection practices in the industry. Rather, the driver will be the aging pipelines which will continue to have incidents and spills which the public will not accept.

James Stafford: And how is this playing out on the regulatory scene?

Adrian Banica: Congress passed a new law a year ago on this topic. The US regulators have yet to act on new regulations based on this law, but the trend is indeed there. Pipeline companies are concerned about potential upcoming new regulations and are working with the regulators to try and come up with proactive solutions and preempt their moves. There are a lot of discussions going on in the US on this topic right now and the regulator has proposed a set of new rules which are out for comment and discussion in the industry. It is a slow and drawn out process.

James Stafford: Everyone is waiting for the Obama administration to make a decision on Keystone, and while most analysts seem to think it will be given the final green light, the protest movement shows no sign of letting up. How do you see this playing out?

Adrian Banica: With the governor of Nebraska now approving it, I think the administration has no choice and no excuses for not approving it.

James Stafford: Would regulations governing pipeline safety actually boost support for Keystone XL?

Adrian Banica: Personally, I don't think so. The most vocal opposition for Keystone comes from the side of the environmental movement that does not want to see the pipelines build in order to decrease our overall dependence on oil rather than their concern for spills. So it is a philosophical position based on decreasing CO2 emissions rather than one based on spills in the environment which will not be appeased by regulations.

James Stafford: What about any potential regulatory protection leak detection systems could offer pipeline companies?

Adrian Banica: The benefit to our customers is that they can demonstrate due diligence and that they have employed the best techniques available to ensure pipeline integrity. They will be covered if there is any court action or regulatory action.  The value of our data in case something does happen could be quite substantial.

There may be small differences in the regulations with the US being somewhat stricter and tighter than the Canadian regulations. So there are a few more incentives for US based customers to use our service.

James Stafford: Protests continue over the Enbridge pipeline in Vancouver, for instance. How could this play out. Could big pipeline players like Enbridge be able to embrace something like your technology to quell some of those protests?

Adrian Banica: This is a good case in point. Yes they absolutely could, and should. I’m very firm on that answer and I think they are looking at it. Enbridge is a customer of ours already in the United States and they’re very aware of what we offer and do.

James Stafford: So these are early days for commercial viability?

Adrian Banica: These are very early days, and we have just turned the corner from a science concept into something that is commercially realizable. We spent 2011 and 2012 working very hard to penetrate the industry and to convince clients that this is not a science project anymore—this is a genuine commercially viable technology. We are now starting to see the adoption of our technology and services. So I believe we are at the tipping point and by no means do I think that shareholders have missed the boat.

James Stafford: Adrian, thank you for your time. This has been a very interesting discussion and the topic is one we will be following closely over the coming months. Hopefully we will get a chance to talk later in the year to see if any of the developments discussed have come to pass.

Adrian Banica: Absolutely, I'd be delighted to catch up later in the year.

James Stafford: For those interested in learning more about Synodon please take a minute to visit their website: www.synodon.com

U.S. Oil Output to Overtake Saudi Arabia’s by 2020

Lananh Nguyen
Nov 12, 2012
http://www.bloomberg.com/news/2012-11-12/u-s-to-overtake-saudi-arabia-s-oil-production-by-2020-iea-says.html

Growing supplies of crude extracted through new technology including hydraulic fracturing of underground rock formations will transform the U.S. into the largest producer for about five years starting about 2020, the Paris-based adviser to 28 nations said today in its annual World Energy Outlook. The U.S. met 83 percent of its energy needs in the first six months of this year, according to the Energy Department in Washington.

“The IEA outlook feeds into the idea of a shift in the center of influence in the world oil market,” said Gareth Lewis-Davies, an analyst at BNP Paribas SA in London. “Given Saudi Arabia is willing to shift production up and down it will retain a large degree of influence, and remain important as a price-influencer.”

The U.S., whose crude imports have fallen 11 percent this year, is on track to produce the most oil since 1991, according to Energy Department data. In a year when Iran has threatened to halt Persian Gulf oil shipments, the growing output, coupled with a gas-production boom, may help insulate the nation from supply disruptions. President Barack Obama cited “freeing ourselves from foreign oil” as a policy goal in his election victory speech last week, echoing his predecessor, George W. Bush, who in 2006 urged the U.S. to break its “addiction” to imported crude.

Oil Prices

West Texas Intermediate crude, the benchmark U.S. grade, has dropped 13 percent this year to $85.55 a barrel on the New York Mercantile Exchange, as stockpiles swelled to a 22-year high. Prices have more than quadrupled in the past decade, reaching as high as $147.27 a barrel in July 2008.

Global demand for oil is projected to rise to 99.7 million barrels a day in 2035, up from 87.4 million last year, according to the IEA, which advises industrialized nations including the U.S., Germany and Japan. Today’s report projects trends to 2035.

Saudi Arabia pumped 9.8 million barrels of oil a day last month, according to data compiled by Bloomberg. U.S. output was 6.7 million barrels a day in the week ended Nov. 2, according to the Energy Department.

Overtaking Saudi Arabia

The U.S. will pump 11.1 million barrels of oil a day in 2020 and 10.9 million in 2025, the IEA said. Those figures are 500,000 barrels a day and 100,000 barrels a day higher, respectively, than its forecasts for Saudi Arabia for those years. The desert kingdom is due to become the biggest producer again by 2030, pumping 11.4 million barrels a day versus 10.2 million in the U.S.

“Around 2017, the U.S. will be the largest oil producer of the world, overtaking Saudi Arabia,” IEA Chief Economist Fatih Birol said at a press conference in London today. “This is of course a major development and definitely will have significant implications.”

Officials at the U.S. Energy Department weren’t available for comment because government offices were closed in observance of the U.S. Veteran’s Day holiday today. A Saudi Arabian oil ministry official based in Riyadh wasn’t immediately available to comment on the report when contacted by phone today.

The IEA report described the U.S.’s advancement toward energy self-sufficiency as “a dramatic reversal of the trend seen in most other energy-importing countries.” The nation is developing so-called tight oil reserves including the Bakken shale formation, which are extracted by hydraulic fracturing or horizontal drilling.

Shrinking Imports

U.S. oil imports will drop to about 4 million barrels a day in 10 years from a current average of 10 million because of new production and stricter fuel-efficiency standards for cars and trucks, which will curb demand, Birol said.

The IEA isn’t alone in forecasting that the U.S. will overtake Saudi Arabia and Russia to become the largest oil producer. The U.S. will achieve that goal before the end of this decade, Citigroup Inc. said in a March 20 report that included biofuels and natural gas liquids in its calculations.

The European Union banned oil imports from Iran in July over the nation’s nuclear program, reducing shipments from a country that was until then the second-biggest producer in OPEC.

The IEA’s members will probably pay about $125 a barrel for imported oil by 2035, compared with Brent crude prices near $109 today on London’s ICE Futures Europe exchange. The North Sea grade peaked at a record $147.50 a barrel in July 2008 before tumbling to about $46 that December, and has gained in each of the three years since then.

‘Epic Failure’

Efforts by global policy makers to promote energy efficiency have been an “epic failure” and fallen short of their economic potential, Birol said. Increased energy-saving measures could cut worldwide oil demand by almost 13 million barrels a day by 2035, or the current combined output of Russia and Norway. Put another way, were efficiency measures suggested by the IEA enacted in full, the increase in world energy demand over the period would be cut in half.

Natural gas consumption will rise in the forecast period, driven by China, India and the Middle East.

“In the United States, low prices and abundant supply see gas overtake oil around 2030 to become the largest fuel in the energy mix,” according to the report, written by a team of researchers led by Birol.

Iraqi Surge

Iraq will be the biggest contributor to new oil supplies, raising production to 6 million barrels a day by 2020. By 2035, the nation’s output rate will rise to more than 8 million, overtaking Russia to become the world’s second-largest exporter, the IEA said. The country pumped 3.4 million barrels a day last month, making it the second-largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia, according to Bloomberg estimates.

The forecasts for Iraq, a special focus of this year’s IEA outlook, were previously published on Oct. 9.

In emerging nations, government subsidies will continue to spur fossil fuels use, even as lower-carbon energy sources become more popular. State subsidies cost $523 billion last year, up almost 30 percent from 2010. Subsidy programs, which remain most prevalent in the Middle East and North Africa, have become more expensive as oil prices rose, the agency said.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

Is Global Trade About To Collapse?

Where are Oil Prices Headed? A Chat with Mish
James Stafford | Wed, 25 July 2012
http://oilprice.com/Interviews/Global-Trade-Likely-to-Collapse-if-Romney-Wins-Interview-with-Mike-Shedlock.html

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more. Click here to find out more.

As markets continue to yo-yo and commentators deliver mixed forecasts, investors are faced with some tough decisions and have a number of important questions that need answering. On a daily basis we are asked what’s happening with oil prices alongside questions on China’s slowdown, which commodities or instruments will provide safety in the current environment, will the Euro-zone split in the future and what impact the presidential election is going to have on the economy and markets?

To help Oilprice.com look into these issues and more we were fortunate enough to speak with the award winning economic commentator Mike “Mish” Shedlock. Mike’s blog: Mish’s Global Economic Trend Analysis is one of the most popular and informative economic blogs online. His millions of dedicated monthly readers find his advice invaluable and we recommend anyone interested in learning more about the global economy and financial markets to stop in and take a look: http://globaleconomicanalysis.blogspot.com

To find his blog, you can also do a Google search for Mish

In the interview, Mish discusses:

•    Why global trade will collapse if Romney wins
•    Why investors should get out of stocks and commodities
•    Why we have been oversold on shale gas and renewable energy
•    Why oil prices will likely fall in the short-term
•    Why the Eurozone is doomed
•    Why there may soon be an oil war with China
•    How government interference is ruining the renewable energy sector
•    Why we need to get rid of fractional reserve lending

Oilprice.com: With oil prices now in the high 80's and news out of Europe getting worse every day, do you expect prices to stay in this range, or do you see them dropping in the short term?

Mish: There are two conflicting forces here. One of them is oil prices over the long-term and the other is oil prices over the short-term.

Even in the short-term you will find there are conflicting forces at play. For example, stress in the Middle-East puts an upward pressure on oil prices. However, economic problems in Europe, a slow-down in Asia and a slow-down in the United States put downward pressure on oil prices. New orders are falling at a staggering rate across the board in Asia, China, Japan, Europe, and the United States which also puts further downward pressure on oil prices.

Long-term, forces such as peak oil and population growth in China are putting pressures to the upside.

One needs to balance all of those factors out when they are about ready to give a prediction on oil prices. My opinion is that over the short to mid-term, oil prices will go down. Long-term, energy is a good place to invest.

Oilprice.com: If your prediction is correct and oil prices do go down – what sort of impact do you see this having on the U.S. economy, if any?

Mish: That's an interesting question. However, the question puts the cart before the horse.

Looking at prices in a vacuum is a mistake. One also has to look at why prices are doing what they're doing. For example, falling oil prices that happen when supply shocks are alleviated are a positive thing. Falling oil prices because of falling demand is another. You seldom see this kind of distinction in mainstream media.

Right now, oil prices are primarily falling because of falling demand, and that is in spite of geopolitical tensions. That is not a healthy sign for the economy.

Oilprice.com: As we have seen with the recent oil workers strike in Norway and subsequent rise in oil prices. Geopolitical risks always remain to keep the markets off balance. Apart from Iran are there any other geopolitical risks you think people should be aware of?

Mish: A key geopolitical risk in the long-term is that China cannot continue at its expected rate of growth. For years, the mantra has been "China, China, China," and many thought China could maintain its 8% to 10% per year growth going forward. That's not going to happen.

I agree with Michael Pettis at China Financial Markets, that China is more likely to see 2% growth than 8% or even 6% growth over the next decade.

2% growth is a shocking reduction, even from the lowered expectations that we've seen regarding China. The implication is commodity prices, especially base metals, are going to be under extreme pressure because of China stockpiles. For further discussion please see "China Rebalancing Has Begun"; What are the Global Implications?

Oilprice.com: What are your longer term projections for oil prices – say 3-5 years out?

Mish: I think it's a fool’s game to make such projections. Most of the projections on the price of gold, silver and oil are ridiculous. They are designed to sell newsletters. The bigger the hype, the greater the sales. On occasion, I will make a call. For example, when crude hit $140+ in the summer of 2008, and others called for $200, I said oil prices would drop to the $45.00 - $50.00 range or so. Oil went to $35.
Moreover, those predicting $200.00 never bothered to think what that would do to the global economy. We saw the same thing in natural gas. People were predicting $25. Look at prices now, at roughly $3.00 NG fell all the way to $2.20, lower than even this staunch deflationist thought.

I'm not willing to go out on the same limb and predict energy prices three years in advance. The reason is we really don't know for sure how central bankers are going to respond. China is particularly important. If there's universal printing of money everywhere, I would expect a lot of that to flow back into prices of gold, perhaps of silver, and perhaps energy, but we really don't know what they're going to do. We don't know when or how the Euro Zone is going to break up. I think it will, but how is as important as when.

In the US, we don't know the results of tax hikes following the 2012 election. Heck, we don't even know who the next president in the United States is going to be. Will it be Republican? Will it be Democrat? Numerous political and economic forces are pulling and tugging in different ways.

I don't believe there's anyone out there that can predict, with any kind of accuracy, what oil prices are going to do. Which is why I believe trying to predict oil prices in the midst of all of these possibilities is a fool's game.

Oilprice.com: What are your views on inflation and hyperinflation.

Mish: Hyperinflation is a complete collapse in currency. It is a political event that kicks off hyperinflation, not a monetary one. Hyperinflation talk hit an extreme when oil prices hit $140. Such talk was silly then, and it is still silly now.

Hyperinflationists in general fail to understand the role of collapsing demand for credit. The total credit market is over $54 trillion. Base money supply is $2.6 trillion and excess reserves are about $1.5 trillion. Seems to me we had huge expansion in credit and Bernanke is struggling to reignite demand. I suggest he will not succeed.

The idea the US$ will suddenly go to zero is ridiculous. The US is the world’s largest holder of gold reserves, and that alone would stop it. Also note that Bernanke, as misguided as his policies are, is still beholden to the banking system. As such he has no desire for it to collapse.

As far as inflation goes, I am still widely misunderstood. I view inflation as an increase in money supply and credit, with credit marked to market. Deflation is the opposite. If one insists that inflation is about prices, then we are in a state of inflation with 10-year treasury rates below 1.5%.

For those who woodenly view inflation in terms of prices, well, prices may or may not rise. Price have generally risen, but credit is the key behind housing prices, family formation, hiring, and in fact everything driving the economy. So, where is credit going? Demographics and student debt suggests nowhere. Indeed, credit has gone nowhere in spite of heroic efforts by Bernanke.

Oilprice.com: You just mentioned that we don’t know who the next president is going to be and sticking to this topic how big an impact do you see energy prices having on this year's presidential elections?

Mish: I don’t think energy prices are what's on people's minds. What's on people's minds right now are jobs. Oil prices have kind of stabilized and in the very short-term they are likely to stay stable unless there are some dramatic results in the Mid-East or a dramatic slowdown in the US economy.  Both are possible, but a major US slowdown is arguably more likely. Regardless, I think energy prices are going to be a minor election issue.

Oilprice.com: The message on peak oil seems to be confused. Many are adamant that peak oil is the largest threat to ever face humanity, whilst others believe that with new technologies and new fields being found, peak oil is a myth and we are actually swimming in oil. What are your thoughts?

Mish: The idea that we're swimming in oil is preposterous. Moreover, abiotic oil is a ridiculous pipe-dream. That said, the idea that the global economy is going to come grinding to a halt in the next year or two because of oil is also preposterous (discounting a geopolitical Mid-East shutdown). In general, I would side with the peak oil folks, noting that a global recession will likely pressure prices more than anyone thinks, barring a breakout of war or supply disruptions  in the Mid-East.

Long-term, 8% growth in China is mathematically not going to happen. People really need to get a grip on exponential math and the implications thereof. If China does attempt to grow at 8-10% as some people have predicted, there's going to be an oil war of some kind between the United States and China because there's simply not enough oil.

For a good discussion on the limits of exponential growth, please see Calpers Pension Plan Reports 1% Return; Stunning "What If" Charts at Various Compound Annualized Rates-of-Return Going Forward

Oilprice.com: Shale gas has been generating a great deal of headlines recently. Do you believe it could be the solution to America’s energy challenges? We are also seeing developments in oil & gas extraction technologies. Have we been oversold on such possibilities?

Mish: I think we're oversold on everything. We're oversold on the idea of cheap energy, of free energy, of green energy, of clean energy. We're oversold on the stock market. We're oversold on what Obama can deliver. We're oversold on what Mitt Romney can deliver. We're oversold in so many areas, I can't even mention them.

In regards to new technologies, how much water will it take to extract these reserves in the midst of these droughts? What are we going to do with the contamination, how do we get rid of the waste byproducts? These kinds of projects look good on paper, but are they truly scalable in practice?

I hope I am wrong.

Oilprice.com: What is the role of government in alternative energy sources?

Mish: The role of government should be to get the hell out of the way and let the free market work. If peak oil really is a problem (and I think it is), the free market will come up with a solution if left alone.

Instead, the government is trying to pick winners. Look at the results. President Obama backed solar panel manufacturer Solyndra and the DOE loan guarantee scheme blew sky high.

Our ethanol program is a total disaster. By government mandate, corn has been diverted to ethanol production smack in the midst of a drought. Corn is not an efficient way to produce ethanol, even if there was not a drought.

Governments seldom back winners. Instead, government bureaucrats back companies that contribute to their campaigns. This is worse than it looks because such activities deprives companies with real solutions a chance at funding.

We need to get government out of the energy business completely and let the free market work.

Oilprice.com: Sticking with the renewable energy theme, do you see them making a meaningful contribution to global energy production over the next 10 years?

Mish: Adding to my previous answer, government subsidies of unviable products and unviable ideas gets in the way of the free market actually producing viable products and viable ideas. Simply put, the more government interferes, the less likely we are going to see advances in the actual direction of a true solution.

Oilprice.com: In regards to presidential elections, how do you think energy will fare under Obama and under Romney? Which sectors will benefit, and which will suffer?

Mish: Mitt Romney has declared that if he’s elected he is going to label China a currency manipulator and increase tariffs on China across the board. That's something that I believe he might be able to do by mandate. If he's elected and he does follow through, I think the result will be a global trade war the likes of which we have not seen since the infamous Smoot-Hawley Tariff Act compounded problems during the Great Depression. Simply put, I think that global trade will collapse if Romney wins and he follows through on his campaign promises.

Unfortunately, campaign rhetoric now is heating up to the point where President Obama and Mitt Romney are trying to outdo each other on who's going to do more to China. Thus, we may very well see a global trade war regardless of who wins.

As an aside, Mitt Romney is pledging to increase military spending. Given Romney’s statements on Iran, it's more likely he would start a war with Iran than Obama. Note that the U.S. military is one of the biggest users of petroleum worldwide and oil price shocks could be devastating.

None of this is any good for the world economy at all. I believe that Romney will do what he says. I believe he's more likely to start wars than Obama, but that doesn't make Obama any good. This is the worst slate of candidates in U.S. history running for president, and I'm writing in Ron Paul.

Oilprice.com: As the global economy slows, where do you see the best investment opportunities available to investors?

Mish: At this point, the best thing to do is wait for better opportunities. I am talking my book, but something like 70-80% cash (or hedged equities) and 20-30% gold seems reasonable. I'm telling people, "Get out of the stock market. Get out of commodities except gold and perhaps a bit of silver."

A global slowdown is underway. Actually, I made a Case for US and Global Recession Right Here, Right Now.

Although nothing is certain, central bankers worldwide are highly likely to pump up money supply hoping to counteract the slowdown. If so, I think gold is going to be one of big beneficiaries. Silver may be a huge beneficiary, and I like it here. However, silver is also an industrial commodity, so gold is safer.

Bear in mind, I may seem like a broken record on this thesis given cash and gold has been my call for the last year and a half or so.

In spite of calling the global economy exceptionally well, I've simply been wrong about U.S. equities. They have risen far more than I thought, but I still caution that risk is high.

I'm going to repeat my general message here, that another slow-down, and another big downturn in the stock market is highly likely. Equities are quite overvalued at this point, cash is not trash, and staying liquid now, with a percentage in gold, is a good idea.

Oilprice.com: I was hoping you could tell us your thoughts on the Euro. You mentioned previously, that you think the E.U. will split in the future, why do you think this will occur, and what will the economic and political implications be?

Mish: I think it's pretty clear that the euro's going to split because no currency union in history has ever survived without there being a corresponding fiscal union in place. Right now we're in a situation where Germany’s Chancellor Angela Merkel says that "There should be no fiscal union until there's a political union." Francois Hollande said, "There should be no political union until there's a banking union," and the German Supreme Court will not allow a political union or a fiscal union, nor a banking union without a German referendum.”

I did a post on this, and it's called, "It's Just Impossible."

If politicians could not get agreements when times were good, how are they going to get these agreements now, when they're bickering over every little thing, including the amount of the ESM, whether or not the bailout of Spain should be via the ESM or the EFSF, and whether or not the Spanish government should be backstopping this loan.

They can't get an agreement on anything, and the German Constitutional Court is hanging like a Sword of Damocles over the entire thing.

For these reasons, the Euro is going to bust up. What happens to the price of the Euro depends on how it busts up. If the breakup is piecemeal and disorderly, it means one thing. If it's orderly and prepared in advance with Germany leaving and the northern states leaving, it's a completely different scenario. Any point along that line is possible, but piecemeal seems more likely. How disorderly remains to be seen.

For example, if Germany exits the Euro and goes on the deutschmark, the value of the deutschmark will soar, whilst the value of the Euro will decline.

Instead, if we see a break-up by Spain leaving, by Greece leaving, by Italy leaving, and the bulk of what's left is Germany and the northern States, then the value of the Euro can soar. Those are the two conflicting possibilities here. The market has not decided which one of those is more likely.

Meanwhile, the Euro is in a low 1.20 range to the U.S. dollar. A breakout or a breakdown might be a signal that the market is expecting one of those possibilities over the other.

We are in uncharted territory and everyone is guessing.

Short-term I am neutral on the US dollar at this level because the euro is a bit oversold, the idea of a Greek exit is no longer unfathomable, and the Fed is likely to initiate QE3 at some point. This is a change from my previous US dollar bullish stance.

Oilprice.com: We mentioned China earlier, and I was wondering what you think the future holds for China, both politically and economically.

Mish: A regime change in China is coming up. The current regime has been focused on growth. However, I think the next Chinese government already understands that the growth at any cost of the current regime is not sustainable. If so, we're going to see a major shift away from an export-driven production model dependent on investment on roads, on bridges, and more production, to a consumption-driven model. That shift will be one of the major forces in the global economy.

If I'm correct on this, then it's going to be a painful adjustment, regardless of what China does. For example, a Chinese slow-down towards consumption would increase the value of the renminbi, would decrease their exports, would help the balance of trade between China and the United States and Europe, and would put intense pressure on commodity prices. In turn, asset prices and currencies of the commodity producing countries, like Australia, Brazil, and Canada will come under heavy pressure.

Oilprice.com: Mark Faber is not a fan of the Federal Reserve, blaming them for the current US economic situation. He said, “Usually under a gold standard you have a bubble under one sector of the economy but you don’t have it across the board globally and that’s really what the Federal Reserve has done over the last couple of years.” Do you agree? Is the Fed to blame? And what can be done to avoid this in the future?

Mish: I agree with part of it, if not most of it. However, the idea that the gold standard itself causes bubbles is fallacious. The gold standard does not cause huge bubbles. The real culprit is fractional reserve lending. Historically, problems happened when banks lent out more money than there was gold backing it up.

The gold standard did one thing for sure. It limited trade imbalances. Once Nixon took the United States off the gold standard, the U.S. trade deficit soared (along with the exportation of manufacturing jobs).

To fix the problems of the U.S. losing jobs to China, to South Korea, to India, and other places, we need to put a gold standard back in place, not enact tariffs.

Oilprice.com: Mish, thank you for your time this has been a very enjoyable and enlightening conversation for us.

For those of you who haven’t seen Mish’s superb blog and daily economic commentary we strongly recommend you visit his site: http://globaleconomicanalysis.blogspot.com. You can also do a Google search for Mish.

Visit our homepage for the latest oil prices and energy news.

Falling Oil Prices Present a Great Opportunity

An Interview with Jim Rogers
By James Stafford | Wed, 04 July 2012
http://oilprice.com/Interviews/Falling-Oil-Prices-Present-a-Great-Opportunity-An-Interview-with-Jim-Rogers19.html

Benefit From the Latest Energy Trends and Investment Opportunities before the mainstream media and investing public are aware they even exist. The Free Oilprice.com Energy Intelligence Report gives you this and much more.

World markets appear to be hovering over a precipice as Europe’s sovereign debt crisis, slowdowns in India and China and further bank downgrades threaten to send stocks and commodities down even further. Falling oil and gas prices may offer some respite to consumers but are they enough to help the economy or are they a symptom of deeper problems?

To help Oilprice.com look at these issues and more we are joined by the well known investor, adventurer and author Jim Rogers. Jim is the creator of the Rogers International Commodity Index, he also recently completed a book called: A Gift to my Children – which helps people learn from their triumphs and mistakes in order to achieve a prosperous, well-lived life. Please click on the following link to find out more information on A Gift to my Children:

http://www.amazon.com/Gift-My-Children-Fathers-Investing/dp/1400067545/thekonformist

In the interview Jim talks about the following:

• Why recent oil price falls are a good buying opportunity
• Why oil prices could fall to $40 a barrel
• Investment opportunities with the renewable energy sector
• Why he is optimistic about Nuclear energy
• Why agriculture offers good opportunities to investors
• Why Myanmar is the best investment opportunity in the world right now
• Why there could be further unrest in the Middle East
• Why we should let Greece fail

Interview conducted by. James Stafford of Oilprice.com

Oilprice.com: Jim, thanks for taking the time to join us today.

Jim Rogers: I'm delighted to be here, James. My pleasure.

Oilprice.com: It’s been an interesting period in the energy world as we’ve seen oil prices steadily decline over the past few months and with the problems in Europe and slowdowns in India and China do you expect this trend to continue?

Jim Rogers: Well, there is certainly a correction going on for various reasons. I think Saudi Arabia's trying to help re-elect Mr. Obama. There are also stories that JP Morgan has problems in its London office with a lot of unauthorized positions they're having to liquidate. I don't know what's going on, but I do know that corrections are normal in the industrial world. There's nothing unusual about it. If it continues, there’s an opportunity to buy more.

Oilprice.com: I read a report by the Economist Phil Verleger who thinks that the Saudi’s massive increase in oil production along with other economic problems could cause oil prices crash to $40 a barrel oil and $2 a gallon gasoline by November. Do you think this is a reasonable forecast and we could see oil at these levels?

Jim Rogers: We could see anything. We certainly saw lower prices than that back in 2008 when there was a collapse. When things are collapsing, all sorts of strange things happen. We found that out in 2008 and we will probably find out in the future, as well. If oil does go to $40, that means it'll just be setting up an even more bullish scenario for the duration of the bull market.

Oilprice.com: How do you see the energy markets reacting to the Iranian sanctions, which are going to be coming into effect on the first of July?

Jim Rogers: Oh, I don't see that having much effect at all. Everybody already knows about that - nothing new to the markets. They have long since adjusted to this news, whether it be stock markets, smuggling, etc. The Iranian sanctions are a non-event as far as I'm concerned.
Now, an attack on Iran would not be a non-event, but this is just more noise.

Oilprice.com: The Middle East Petocracy’s, along with Venezuela and Russia must be nervously watching the price of oil. Can you see potential problems developing in these countries and other oil producing nations if prices continue to fall?

Jim Rogers: That's part of what I was saying before. The lower prices go for the fundamentals, the price of fundamentals improve, but for these countries the money they have available to buy peace is running out and there are going to be problems, because a lot of people have been lead to believe that the government can solve their problems and if the government runs out of money, it makes people upset.

Oilprice.com: Crude oil has dropped from $108 a barrel in February to $84 today. Do you think low oil prices could provide an economic stimulus?

Jim Rogers: Certainly, it's an economic stimulus for everybody who buys oil. There's no question about that. On the other hand, for people who produce oil, it's a negative. Now obviously more of us buy oil than produce oil, but it’s important to remember it does cut both ways.

To view more discussions with other experts visit our new interview section

Oilprice.com: Less than 0.1% of U.S. cars and trucks run on natural gas and with falling natural gas prices and America’s dependence on oil and vulnerability to oil price shocks – I was hoping to get your thoughts on natural gas usage for transportation?

Jim Rogers: Well, If natural gas stays this low compared to oil prices, it does give an incentive to develop natural gas powered vehicles and I think we are going to see more and more developments here.  Is it going to end the use of oil, combustion engines? Probably not any time soon. Someday it could, but someday is a long way away.

Oilprice.com: Do you believe natural gas prices are near to a bottom, or do you think they have further to fall?

Jim Rogers: U.S. natural gas is somewhere near its bottom, in my view. The problem is I expect to see serious economic problems in 2013 and 2014 in the U.S. If and when that happens, we're going to see a final panic in the markets and the economy and everything will have a crescendo and a selling climax.

We're certainly a lot closer than we were. Although, when you have a selling climax in markets, you go to levels much lower than most people believe possible and that may happen. Whatever that bottom is, it's not too far from the recent lows in natural gas.
Natural gas in many other places such as the UK are much, much higher than they are in the U.S.

Oilprice.com: The Arab Spring shook energy markets in 2011 – are there any potential geopolitical events taking place apart from the Iranian situation that could cause oil prices to skyrocket?

Jim Rogers: There are always geo-political possibilities. If oil goes down, Saudi Arabia's going to have more trouble buying peace. Any country's going to have more problems buying peace.

Iraq is being driven into the arms of Iran. America has spent staggering amounts of money in this region, and what we're getting for it is a possible alliance between Iran and Iraq.
All sorts of things could happen in the future, especially if Iran and Iraq get closer together. That's going to put America in a terrible situation, the world in a terrible situation. The good news is the world is always changing dramatically. The bad news is, the world is always changing dramatically.

Oilprice.com: The media has gotten behind shale gas and it’s being promoted as a worldwide energy saviour. What are your thoughts on shale gas? Do you think it’s been oversold or it really is the cheap and plentiful oil extender we have been hoping for?

Jim Rogers: I don't know how cheap it is. The technology's getting better, apparently. The cost too because the environmentalists and politicians are getting worried about it. But I don't know enough about the technology to know for sure. I do have confidence in mankind and someday we will have the technology and expertise to fully exploit these resources.

Someday's still a long way away though, and in my case, I don't know how long life the fields are. If these are short-lived fields and short-lived wells this is nothing more than a flash in a pan, which may last for a few years.

To view more discussions with other experts visit our new interview section

Oilprice.com: Moving away from fossil fuels – I was hoping to get your opinion on renewable energy. Do you see this as a sector investors should be avoiding – or are there opportunities here in the future?

Jim Rogers: That is your premise, if oil stays high alternatives become more competitive. Most alternative energy is not competitive at this moment in time but that could change.
If oil prices go down and stay down the subsidies for alternatives are going to have to be pretty massive to make it even viable.
However, having said that, if you can find competent companies that can make money in the field, they'll make a fortune.  Find the right companies and you'll do well.

Oilprice.com: Are there any alternative sectors you're more bullish on than others? Say solar, wind, geothermal, hydro?

Jim Rogers: No, no. They all have pluses and minuses. I'd be most optimistic about the ones that are economically competitive. I guess atomic energy is most economically competitive.

Oilprice.com: What are your thoughts on nuclear energy? Is there a future for this power source or due to public safety perceptions is it something politicians will feel forced to abandon or sideline?

Jim Rogers: I don't think people will abandon atomic energy. It is competitive, it is economic, it is very clean if controlled. If it's not controlled it's a disaster of course. I suspect you're going to see another revival of atomic energy. The French, the Koreans, the Chinese, many countries are going forward with their nuclear power development plans.

Oilprice.com: I've seen in other interviews that you've predicted that 2013 and 2014 will be bad years for the economy. What is an investor to do? Are there any commodities, stock or instrument people can go to for safety and capital preservation?

Jim Rogers: No such thing as safe when you talk about it. Even if you put your money in cash, if you put your money in the wrong cash, you lose a lot of money. As the people in Iceland have found out, as the people in Europe on the Euro have found out. So, no such thing as safe.

What I have done is I own commodities on the theory that if the world economy gets better, I'll make money because of shortages. If the world economy does not get better, people will print money. The best way to save yourself when money printing is going on is to own commodities.
It does not mean between here and there, they can’t go down in a panic. In the meantime, commodities will be the thing to rally once that happens, but they can go down. Therefore, I have also short stocks as a hedge against myself. If the world economy doesn’t get better, you're going to be losing a lot of money in stocks.

Oilprice.com: Now are there any commodities you're particularly bullish on at this moment in time?

Jim Rogers: I'm more optimistic about agriculture than anything else, just because of the price. Most agriculture, I feel very depressed on the risk side basis. Sugar is 75% below where it was 38 years ago. There's not much in the world that's as depressed as agricultural current prices. So, I would say agriculture.

Oilprice.com: You’ve owned gold for 11 years now and the price is currently correcting. Do you see this as a buying opportunity or would you wait a little longer?

Jim Rogers: I've actually owned gold for longer than 11 years. I'm not buying now. Gold went up 11 years in a row, which is extremely unusual for any asset. I don't know of any asset in history that's gone up 11 years in a row without a correction.

Corrections are normal and are the way things should work, the way things do work. Having said that, I don't know when the correction will stop. It's normal in my experience for corrections to go down 30 or 40%. It's just the way markets work.
Gold has not gone down that much. It's only gone down that much once in the past 11 years, and even then it ended the year up. I'm not buying gold at the moment. If it goes down a lot, I hope I'm smart enough to buy a lot more. I'm certainly not selling my gold, because I suspect gold will be much, much, much higher over the next decade.

To view more discussions with other experts visit our new interview section

Oilprice.com: You've mentioned in the past that you're bullish on Asia. Where do you see the best opportunities for investors in this region at present?

Jim Rogers: Probably the best investment opportunity in the world right now is Myanmar. In 1962, Myanmar was the richest country in Asia. They closed off in 1962, and now it's the poorest country in Asia. I see enormous opportunities there because they're now opening up. It's like when China opened up in 1978. There were unbelievable opportunities going forward. The same is true in Myanmar now in my view. North Korea, I expect to see the same sorts of developments.

Oilprice.com: You’ve mentioned previously that the 21st century belongs to China. But China has some serious internal problems as its political stability depends heavily on rapid economic growth. We are also seeing increasing tensions between the wealthy coastal regions and the poor interior. My question is do you think the internal forces building up in China can be managed as China is held together by money not ideology?

Jim Rogers: What you just said about China's true of every country in the world, more so in places like America and Europe than in China. China does have internal problems. But their economy's much stronger than the western economies. You had riots in the streets in the U.K., what, last summer. Terrible instability, and there's going to be much more in the west. Greece, Spain, Portugal, these countries have staggering instability.

In America in the 1930s we certainly had all sorts of political problems and yet survived, partly because America was a very large credit nation and had the assets to see us through. America came out of that and became the most successful country in the 20th century. China's going to have plenty of problems. Plenty. I'd still rather invest in China than in other places.

Oilprice.com: You mentioned that with Spain and Greece we should just let them go bankrupt – what do you really see the implications of this being. Will it be as bad as we have been led to believe?

Jim Rogers: Might be worse. The good news is we'll get their problems behind us. The way the system is supposed to work is when people fail, they fail. Then you come in, you reorganize. Competent people come in, reorganize, and start over with a sound base. This has been going on for thousands of years.

It's a little bit like a forest fire. When you have a forest fire, it's terrible, terrible, but it cleans out the underbrush, cleans out the dead wood. The forest, when it's all over, is much stronger and has much better growth. Same with financial problems and bankruptcies. You start over and things are better.

Oilprice.com: Now, moving away from the markets, I was hoping you could tell us a little bit about your book, "A Gift to my Children," the inspiration behind writing it and what you hope it achieves.

Jim Rogers: Well, I came into parenthood late and I never wanted to have children. I thought children were a terrible waste of time and money and energy. I felt sorry for friends who had children. Then I had some.

I've had some failures in my life, I've had a few triumphs. I started writing down the things I learned. I wanted to make sure my children knew all of these things. That turned into a magazine article, and the next thing you know it turned into a little book.
Grownups get a lot more out of it than children do because it's really a book for grownups.

Oilprice.com: What are lessons within the book? Why would I go out and buy the book? What am I going to learn?

Jim Rogers: I hope you'll learn to be famous, happy, rich and successful. Being happy, that's the main thing I'm trying to help with. If you're happy, not much else matters in life, at least in my experience. There's various ways to be happy, of course. I'm trying to tell people the things that I have learned. I'm trying to teach them to be curious, independent. It's very hard to think independently, as you probably know. Extremely hard. Most people are not very curious, If they see it on TV, that's what they accept instead of thinking, what's really going on here? I'm teaching readers to be curious, skeptical, independent thinkers.

Oilprice.com: Fantastic. Jim, thank you ever so much for taking the time to speak with us. It's been a pleasure speaking with you.

Jim Rogers: My pleasure

To find out more about Jim’s book A Gift to My Children – please visit Amazon for more details.

Visit our homepage for the latest oil prices and energy news.

The Energy Showdown in Argentina

Interview with Sam Logan
Jen Alic | Sun, 22 July 2012
http://oilprice.com/Interviews/The-Energy-Showdown-in-Argentina-Interview-with-Sam-Logan.html

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Angering Spain by seizing and nationalizing a majority of Repsol’s shares in YPF and ramping up the rhetoric over the Falkland Islands as exploration deals promise to make the territory a major oil player overnight, Argentina is making few friends in the fossil fuels industry these days. Sam Logan, owner of the Latin America-focused private intelligence boutique, Southern Pulse, speaks to Oilprice.com about the politics of populism behind Argentina’s energy aggression.

Samuel Logan is the founding partner of Southern Pulse, a private human intelligence organization focused on investigating security, politics, energy, and black market economics in Latin America. Southern Pulse investigators operate from hubs in Mexico, El Salvador, Colombia, Brazil, and Chile to leverage Southern Pulse’s HUMINT network, unique access, and deep understanding of the region to mitigate risk for public and private sector clients with exposure to political, security, financial, or legal risk in Latin America.

In the interview Sam Talks about:

•    Why Carlos Slim bought shares in YPF
•    Why Argentina won’t take any definitive action in the Falklands
•    Why things will get worse for energy firms in Argentina
•    Argentina’s brewing political crisis
•    Argentina’s future relationship with Spain

Interview conducted by Jen Alic of Oilprice.com

Oilprice.com: In April, Argentina nationalized Spanish Repsol’s shares in YPF and now shareholders have approved a move that could see a sharp cut in dividend payouts and a redirection of profits to investment. This is in line with President Cristina Fernandez de Kirchner’s justification for nationalizing Repsol’s shares in YPF. She had accused Repsol of fleecing YPF by using too much of its profits for shareholder benefits rather than investing in exploration and turning Argentina into an importer of fuel. Will this essentially political and economic populism help or harm Argentina?

Sam Logan: While there are certainly short-term gains to be realized, the long-term effects of the Argentina-Spain relationship and Argentina’s relationship with other oil majors will result in significant setbacks in investment confidence and overall appetite for working with the Argentine government.

Oilprice.com: What we would like to know is what is missing from this story and what role certain vested interests, such as the Eskenazi family (minority YPF shareholders brought on by the Kirchners who later defaulted on their Repsol loans) and Carlos Slim, have played in the YPF saga.

Sam Logan: The Eskenazi family really took a hit from this action. When brought on board by the Kirchners, they took out loans to buy their stakeholder position in YPF. The payback on those loans was based partially on dividend payments. So the Kirchner nationalization and subsequent decision on dividends has left them in default. Carlos Slim, who got 8% of YPF when Eskenazi defaulted, was simply making a personal investment, not a political statement. When you're the world's richest man, it's not particularly risky to make low-value purchases and hold them long term to see if they pan out.

Oilprice.com: Populism is also at play in Argentina’s renewed push over the Falkland Islands. Last week, Premier signed a $1 billion deal develop Rockhopper Exploration’s Sea Lion field in the Falkland Islands and Argentina is threatening to sue Premier for illegal activity. How will this play out for Argentina, and for big oil? What can we expect in the near- medium-term?

Sam Logan: The Argentine lawsuit will move forward and the UK firms will ignore the action, but BP could get caught in the crossfire as a UK firm with holdings in Argentina. Already we've seen Kirchner's administration apply pressure to BP.

Oilprice.com: How are oil and the Falklands used as symbols of national sovereignty in Argentina?

Sam Logan: The Falklands have long been used as symbols in Argentina, and this is an issue that crosses party lines so there is more political currency available for the Falklands issue across the Argentine political spectrum. There could be more saber rattling, but at this point I don't see the Argentine government taking definitive action.

Oilprice.com: Would you agree that at the heart of the matter is Argentina’s misguided energy policy, in place since 2003?

Sam Logan: It's not just energy. This is more about Argentina's overall economic policies and the steadily increasing economic pressures the Kirchner government is facing. Inflation, currency controls and price controls on gasoline all play a huge role in this market, which extends well beyond the recent actions with YPF. Let's not forget that until recently Argentina was a natural gas exporter. Due to a long-term political negligence and mismanagement of infrastructure, Argentina is dependent on multinational energy firms to develop deposits and other known reserves - not to mention the potential for hydraulic fracturing. Ultimately, the irrational behavior Argentina has shown against multinational energy firms underscores a brewing political crisis that shows little to no sign of abatement in the near-term. It's likely to get worse for energy firms in Argentina before it gets better.

Interview by. Jen Alic of Oilprice.com

Visit our homepage for the latest oil prices and energy news.

Investors Should Avoid Oil and Alternatives

An Interview with Dr. Marc Faber

As the world economy teeters on the brink and rising oil prices threaten to de-rail the delicate roots of recovery Oilprice.com asked legendary investor Dr. Marc Faber to join us and give his views on high gasoline prices, the shale boom, alternative energy, developments in the Middle East and much more.

In the interview Mark talks about the following:

• Why investors shouldn't buy oil right now
• Why alternative energy investments are a bad idea for investors
• Why Iran should be allowed Nuclear weapons
• Which direction oil prices could go and why
• Why Investors should be taking money off the table NOW.
• Why we shouldn't be pinning all our hopes on natural gas
• Why selling down the strategic petroleum reserve to reduce oil prices is a useless strategy.
• Why the shale boom won't affect US foreign policy priorities
• Why Obama is a disappointing president

Dr. Faber is a very well known commentator throughout the investment community. He regularly appears on CNBC and is a member of the Barrons round table.

Marc is the editor and publisher of the Gloom Boom & Doom Report, which is a very popular investment newsletter that highlights unusual investment opportunities for its subscribers. You can find out more about the Gloom Boom & Doom Report at Marc's website: www.GloomBoomDoom.com.

OilPrice.com: A number of our readers have been enquiring about the recent oil price increases, where a few weeks ago we saw them rise to a ten month high. Where do you see oil prices going from here, and what do you see as the main reasons for the rapid increase?

Marc Faber: I think there is a risk that oil prices will go much higher. At the same time, the bullish consensus on oil is now at one of the most elevated levels it's ever been. In other words, from a contrarian point of view, you shouldn't buy oil right now. I think it may go down somewhat. In general, if trouble breaks out in the Middle East, or if there is a war, I think the price of oil could go much higher.

OilPrice.com: What are your 3-5 year projections for oil prices?

Marc Faber: Well, you'll have to give me a second. I need to call Mr. Ben Bernanke and ask him how much money he will print. Commodity prices were in a bear market from 1980 to 1998, and since then they've gone up. But because of expansionary monetary policies and artificially low interest rates they have increased more than would have otherwise been the case. We don't know exactly how long this asset bubble will last - but say if you had interest rates in real terms, of five percent, instead of negative five percent, then I think all commodity prices, including gold, would be lower.

OilPrice.com: Obama is being pressured by the Democrats to use the Strategic Petroleum Reserve in order to flood the market with a large supply of oil in an attempt to drive down prices. Some commentators seem to think that this will help, although only in the short term because low supply isn't the cause of the high prices. Do you think it's sensible advice to use the reserves now to lower short term prices or should Obama remain strong and only use the stockpile for what it was designed for?

Marc Faber: I think selling down the reserves would be a useless strategy as one of the main reasons prices are rising is due to international tensions. It's possible for an increase in supplies to drive down the price a little bit. But in emerging economies like China and India, the demand continues to go up. Now, it may not go up every year by the same quantity it did in the last 3 years, because in the last 15 years, oil demand in China tripled, from 3 million barrels a day to 9 million barrels a day. So it's conceivable that in a recessionary environment in China, oil demand will not go up substantially for one or two years. But because the per capita consumption is so low in countries like China and India compared to say the U.S. and Japan and Western Europe, I think the trend will continue to increase.

OilPrice.com: There's a great deal of political theater going on around the Keystone XL pipeline. Do you see the pipeline as being essential to U.S. energy security and something that has to be pushed through at some point?

Marc Faber: Yes, I think it would be important to have the pipeline. But as you say, there's a lot of political pressure and so forth. I think it would be very desirable for the U.S. to become energy self- sufficient. Some observers and forecasters say they can achieve this goal within ten years, due to advances in natural gas extraction. I don't believe it, but I have to respect the view of some experts.

OilPrice.com: The media has been full of reports on the coming shale gas boom. What are your thoughts on shale gas? Is it the energy savior we are hoping for?

Marc Faber: I doubt it. But as long as the market believes it, we have to translate every forecast and every view into investment opportunities. I think a lot of people believe in shale Gas's potential and so this may underpin some strength in equities and currencies. But as I said, I don't believe it.

OilPrice.com: Do you think the shale boom could lead to a change in U.S. foreign policy priorities?

Marc Faber: Well, I don't really believe it. But as you know, Mr. Obama has engaged in more foreign policy initiatives in Asia. For what, I'm not quite sure. The thinking is in the U.S. is that China is a threat. Therefore, they have to increase their cooperation with Asian countries, such as India and the Philippines.
Personally, I think it's an ill-timed move, because I don't think that China has any military ambitions in Asia. But put yourself into the chair of China's leadership. What is the top priority? China obtains 95% of its oil from the Middle East. The top priority is to make sure that this oil continues to flow and that the supply is secure. So they have to secure the oil shipping lanes, from the Middle East, past the southern tip of India, through the Straits of Malacca, up the Vietnamese coast, into China.
Each time they do that or attempt to do that, America and it allies in Asia perceive it as a threat. So the tensions increase.

OilPrice.com: You just mentioned that you don't believe China has any military ambitions in Asia, but we're seeing quite a lot of tension in the South China Seas, especially the Spratly Islands and the energy resources located there. How do you see the situation playing out between China and its small neighbors in this region who all have a good claim on the resources?

Marc Faber: As I just mentioned, China's a huge country. They have certain views about territories in Asia, and I think the U.S. would not react particularly positively if say China or Russia or any other nation had numerous military and naval bases, in the Caribbean or in the Pacific, and military bases in Canada and Mexico.
You have to look at the world from the perspective of the Chinese. I'm not saying that because I'm super-bull about China. On the contrary, I think the Chinese economy faces numerous problems. But I'm saying that if you put yourself into their position, a top priority is to secure a regular supply of oil, iron ore, and copper. If you look at the Kondratiev Cycle where Kondratiev said it's not a business cycle. It's a price cycle, and certain things happen during the downward wave, and certain things happen during the upward wave.
During the upward wave, we have rising commodity prices, which is a symptom of shortages. Then countries become more belligerent, because they begin to be concerned about the supply of commodities, and so tensions increase.
I'm not saying war will break out tomorrow. I'm just saying the conditions have improved.

OilPrice.com: Aside from the South China Seas, where do you see the potential flash points in the world over resources?

Marc Faber: Well, I think a big potential flash point is obviously the Middle East and Central Asia, because neither Russia nor China wants permanent American military bases in Central Asia and to be encircled. The Chinese are encircled by the Americans in the Pacific with naval bases, plus the Americans have 11 aircraft carriers. The Chinese have just one. Plus, in the last 12 months, Mr. Obama has made initiatives to have India as a strategic ally. The result of this is that China, which always had good relationships with Pakistan, has strengthened their relationships with Pakistan. This of course has increased tensions in the region.

OilPrice.com: Moving off fossil fuels, what role do you see renewable energy playing in the future? Do you think government should help innovation in this area?

Marc Faber: This is a very difficult question to answer. Basically, I'm convinced that, over time, to drill a hole in the ground in the Middle East or in other emerging economies and then bringing that oil through a pipeline onto a ship into the countries that consume oil is not an elegant solution to the energy problem. I think eventually this will go away. But in the meantime, alternative sources of energy are extremely expensive. Unless the oil price collapses to like $50, most alternative sources of energy will not be profitable. If someone says to me, we need alternative sources of energy for security reasons, yes, I agree. But for profitability I doubt it.

OilPrice.com: As an investor then, are there any renewable sectors you're bullish on? Or would you stay away from the space entirely?

Marc Faber: I would stay away from it.

OilPrice.com: Following the Fukushima disaster Japan has now shut down 54 nuclear power plants. The population's trust in nuclear energy has been shattered – but do you think this is only temporary and how would Japan make up the energy shortfall - as before Fukushima Japan met around a third of its energy demand with nuclear?

Marc Faber: Well, I guess they'll lean towards more natural gas and more oil so they can offset this shortfall of nuclear energy. Now I don't think that this will change the nuclear energy prospects long term in the world, because other countries like India and China will build their numerous nuclear energy plants. In the case of Japan, I think the power plants which had the problems were antiquated. In other words, they were not up to modern standards.

OilPrice.com: Iran has finally offered to resume talks about its nuclear program and has agreed to allow UN inspectors from the International Atomic Energy Agency to visit its Parchin military complex where a nuclear weapons program is suspected of be being developed. How do you see events developing here and how can investors protect themselves from an escalation in this region?

Marc Faber: Well, if there are escalations, then obviously you have to be long, oil and gold. My sense is that the Iranians are playing the same game the Japanese played in the '70s and '80s. They always negotiated but never did anything about the changing balances - they just want to delay the hour of truth. Every day, I think the Iranians are getting closer to having nuclear weapons. I can understand why. The whole world is hostile towards Iran, and they are encircled.
In the west, France has nuclear weapons and Britain and the U.S., and their neighbor Israel, towards the west. Then in the east, India and Pakistan and of course China. So why shouldn't they have nuclear weapons?

Mind you, either there is all around abandonment of nuclear weapons by all the powers, or every country should be allowed to have them. We in the Western World, we have the misguided belief that we are there to judge which countries may have and which countries should not have nuclear weapons.
But maybe our view is wrong. My view is that if I were looking after Iran, for sure I would want to have nuclear weapons. For sure!

OilPrice.com: Okay. So on to investments - you've mentioned oil and gold, but which other sectors are you bullish on, and what would you advise investors to avoid?

Marc Faber: Basically, since March 2009, equities have doubled in value by and large. Some have gone up more than 100%, some a little bit less, we've had a huge bull market. Last year, almost a year ago on May 2nd, the S&P reached a high of 1,370. Then we dropped into August and into October, and we bottomed out on the S&P at 1,074 on October 4th. Since then, we have a 25% rally. The mood in October and November of last year was extremely negative.
I think this is the time to be rather cautious. Personally, if I had heavy exposure to equities, I would take some money off the table.

OilPrice.com: Where do you see the best opportunities for investors in Asia at present?

Marc Faber: Right now, for the next one or two months, I don't think that stocks will go up a lot. I personally think they will correct. But long term, I still like Asia. My concern is if the Chinese economy slows down meaningfully that we could have economic weakness spreading around Asia as well, as well as in countries that supply commodities to China, like Australia, Brazil, Argentina, and so forth.
Right now, say for the next two months, I'm very cautious.

OilPrice.com: I was looking through some of your previous interviews as well, and in one of them, you mentioned Barack Obama. You said he was by far one of the worst presidents that the U.S. has had, and that you still believe he'll be re- elected. In what ways do you think he is unsuitable as a president? I mean, are you fundamentally against his ideas and position on certain topics?

Marc Faber: I don't want to get into an overly political discussion, but I think that first of all, we have in the U.S. and elsewhere highly expansionary fiscal and monetary policies, but we have restrictive regulatory policies. In other words, Obamacare is a big problem for many medium sized and even large companies, because they don't know exactly how much it will cost them. That has retarded hirings of people.
Mr. Obama has intervened into the economy massively, left, right, and center. Every government intervention has consequences. Just to give you an example, the U.S. government debt - I'm only speaking about the government debt, not the prime debt - has gone from essentially zero 200 years ago, to a trillion dollars in 1980.
By the year 2000, we were roughly at $5 trillion. Now in 12 years, we've gone to close to $16 trillion. That excludes the unfounded liabilities. Under Mr. Obama, the fiscal deficit has exploded.
The big question is: Will we ever, in the U.S., have a fiscal deficit of less than $1 trillion or $1.5 trillion? I don't see it. Under Mr. Obama, spending has gone up and tax revenue has gone down. Change, if there was any change under Mr. Obama, it was for the worse. In my view, he's a very disappointing president.

OilPrice.com: Marc, thank you for taking the time to speak with us. It's been a pleasure speaking with you.

Marc Faber: It was my pleasure.

Article originally published at: Oil, Alternatives, and Nuclear Weapons - An Interview with Marc Faber

Interviewer: James Stafford, Editor Oilprice.com