Re-post: Important Report on China energy consumption

According to the Energy Information Administration, the world's demand for energy has been increasing for decades and will continue to rise into the foreseeable future. Take a look:




This isn't news.
John Felmy, the Chief Economist at the American Petroleum Institute says, "There's no question demand internationally is increasing, and virtually all the major forecasters for the year have been increasing their forecasts for demand worldwide."

This only makes sense. The global economy is coming out of a recession. China just announced that GDP grew 10.9% last quarter. India is expecting to grow GDP at 7.5% in 2010.

Heck, even the UK announced that its longest recession in history was now over and GDP grew in that country at a sedate 0.1%...



And despite what you might hear from Al Gore and U2's leading man Bono, oil consumption will increase over the next ten years.
According to the World Institute for the Analysis of Global Security: "From now to 2020, world oil consumption will rise by about 60%. Transportation will be the fastest growing oil-consuming sector. By 2025, the number of cars will increase to well over 1.25 billion from approximately 700 million today. Global consumption of gasoline could double."

It's simple: More cars are sold in China today than in any other country. India is spending billions to build highways, and India's Tata Motors is now selling a $2,000 car to the masses.

China Loves Oil

The most recent data showed that China's oil demand in November rose 18.7 percent year-over-year — the third straight month of double-digit growth. It is no wonder then that over the past two years, China has been securing long-term contracts to its energy needs. It has used its nearly $2 trillion in foreign reserves to gain access to for foreign gas and oil supplies.

China is selling its suspect dollars to lock in hard assets.

Starting back in 2008 when the price of crude dropped to $35 a barrel, China (through its three top oil companies) started an aggressive campaign to scoop the West. They invested in Iraq, Iran, Kazakhstan, Nigeria, Venezuela, and Argentina, among others.

The Chinese have even invaded North America's backyard. They made inroads against the U.S. supply of Canadian oil sands, as Canada is afraid that new low-carbon fuel standards in the U.S. will restrict the purchase of oil sands oil.

China is also looking to buy leases in the Gulf of Mexico from Devon Energy and announced that they were buying a major holding from the Saudis: a transfer station in the Caribbean.

The Chinese are also beating the Europeans and Russia. The Middle Kingdom has recently built an oil pipeline, the first running east from the oil- and gas-rich nations along the Caspian Sea including Kazakhstan and Turkmenistan. There are reports that certain types of crude from Saudi Arabia can't be bought in Europe anymore... they're all going to China.

And just last month, China Development Bank announced that it was investing $50 billion to buy 6 billion barrels of oil reserves in Nigeria.

Obama Does Nothing...

Given China's aggressive tactics, one might expect the U.S. government might try to counter China's oil grab by securing its own oil future. After all, most of us still remember the oil embargo in the 1970s that drove the economy into a decade of stagnant growth and high inflation...

But you would expect wrong.

From a recent report from the Institute for Energy Research:

On February 4, 2009, Interior Secretary Salazar rescinded 77 oil and gas leases in Utah that could cost American taxpayers millions in lost lease bids, production royalties, new jobs, and the energy needed to offset rising imports of oil and gas.

On February 10, Secretary Salazar delayed for 6 months the development of the new 5-year leasing program for offshore drilling that would have set the framework for accessing newly available areas.

On February 25, Secretary Salazar canceled a new round of commercial-scale oil shale research, demonstration, and development leases in Colorado, Wyoming, and Utah.

On February 26, President Obama introduced a budget that contains page after page of taxes on oil and gas totaling more than $31 billion that will reduce our domestic energy production.

On March 30, President Obama signed the Omnibus Public Lands Management Act into law, prohibiting energy production on over 3 million acres of federal land.

After rescinding 77 Utah oil and gas leases in February, Salazar announced on October 8 that he would lease 17 of them.

On October 20, after canceling a new round of commercial-scale oil shale research, demonstration, and development leases last February, Salazar issued a new oil shale leasing program that decreases lease acreage by 87 percent, demands unrealistic timelines for investment into cutting edge research, and leaves royalty rates at the whim of the Secretary or in new regulations.

The truth is this: The Obama Administration is so bent on green energy that they haven't even acknowledged the need for oil.

Despite the highest estimates for windmills and sun-power, the wildly held view is that oil will continue to account for 40% of global energy demand 25 years from now... And this at time when energy demand as a whole is expected to increase 60% or more!

Futhermore, all serious research suggests that hydrocarbon-based fossil fuels (oil plus coal, natgas, etc.) will still account for 85% of world energy demand in 2035.

That's why the top tier Chinese oil companies CNPC, Sinopec, and CNOOC have worked with their government bank and made hundreds of billions of dollars of oil and gas investments.

The Chinese Love Their Oil Companies

The popular mood toward oil companies in the U.S. and China couldn't be more different. In China, they have the full support of the government and people.

In the U.S. the big American oil companies like ExxonMobil, ConocoPhillips, and Chevron are dragged before Congress and scapegoated. You may remember your representatives on their high horse back in 2008.

Sen. Dick Durbin (D-Ill.) said, "You have to sense what you guys are doing to us," and called the oil companies "unconscionable."

Rep. Edward Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming said, "On April Fool's Day, the biggest joke of all is being played on American families by big oil."

The naive sheeple and politicians in the U.S. routinely vilify the very people who supply the energy they use every day. They curse Big Oil as they fill up their Expeditions. Exxon, they claim, is Beelzebub.

If you think oil is expensive now... just wait until we can't get anymore of it.

Giving Away the Store

The cold, hard reality of it all is this: oil is power.

And right now, America and the West are handing over — uncontested — the largest power in the history of the world to their chief rival.

As an investor, I see the future. If the short-term dollar bounce means that oil falls to $70, or $60 or even $55 — I'm a buyer, not a seller. For the simple reason that the Chinese will provide a hard floor and ensure prices. And with the world coming out of recession, there is plenty of upside.

Make China Pay

The good news is that I know where China is going next... and how you can make them pay in what I confidently proclaim will be the best investment opportunity of the decade.

Don't believe me? Read this free report.

All the Best,

Christian DeHaemer

Editor, Wealth Daily
Founder and Editor, Crisis & Opportunity

Business, Consumer and Relationship - Dilemma of Service

(I'm writing with a huge sense of responsibility and I hail the doctrine of Liberty, Equality and Fertility.)

Convenience always paired with the term service. As the global grew more demanding, social structures making progress, from zero to hero or from poor to rich as promised by the idea of capitalism. Hence, the business which our ancestors practiced hundred years ago in a time of barter trading are now flourished with variety of goods to choose, variety of services we could pick, and end result of our life are depending on the decision we make to acquire whom or to favor whom is this flamboyant free market.

This the the core idea of economy studies, this is the main subject we emphasized and took concern. It is because we as a human always have a right. To choose the provider which can in return provide us in our personal interpretation of favorable.

Hitherto. The business environment has progress from exchanging between goods to currency (money). As the fundamental of trade is the core guideline, the progress that we're now appreciating are the most basic concept of service. It is like a chains. A laymen works to earn money, in order for the laymen to earn his money is by providing his service to his employer (in other term, customer) this two party are providing with each other in a natural hope that they both will obtain a relevant rewards and incentives as what logical according to their perspective. The central bank printed the money in order for the inhabitant of the nation to utilize the money, as the money circulate, th nation economy will flourish. In this concept, the central bank is an employee to the government (employer). When the printed money exceed the total requirement, inflation arise or vice versa and the result is deflation. When the laymen felt that his reserve money are not in use, he kept it to the bank, this will make the bank acted as a employee to the laymen. So, the main idea will always to go the term service.

Most people were not aware about the meaning of service. The terminology of service according to Oxford English Dictionary means:
• noun 1 the action or process of serving. 2 a period of employment with an organization. 3 an act of assistance. 4 a ceremony of religious worship according to a prescribed form. 5 a system supplying a public need such as transport, or utilities such as water. 6 a public department or organization run by the state: the probation service. 7 (the services) the armed forces. 8 (often in phrase in service) employment as a servant. 9 a set of matching crockery used for serving a particular meal. (in tennis, badminton, etc.) a serve. a periodic routine inspection and maintenance of a vehicle or other machine.
• verb 1 perform routine maintenance or repair work on. 2 provide a service or services for. 3 pay interest on (a debt). 4 (of a male animal) mate with (a female animal).

Everybody provides service, as I explained on earlier paragraph, service is the most common necessity which what we as a human are required. Service creates a relationship, trust and respect either from provider or receiver. This positive result of service will hence nourish the business, making the market more competitive, generating a strong environment and stabilizing the business. This vital concept are therefore shall not be neglected or refused.

The nature of services nowadays are not as what we expected. The pursuit for extra miles services are in demand by consumer. As human mind and expectation progress, consumer can evaluate the kind of services they hope for. For example, If a customer proceed to a Jaeger Le-Coultre boutique, they expecting an espresso or coffee served to them, they shall inquire a full explanation in detail about the particular product, from where the sapphire came? 15k or 21k gold? which nation does the diamonds derives? et cetera. In this scenario, the service provider need to equip himself a full knowledge of the product, probably the knowledge gained not from the pamphlet or brochure of the product, the service provider also need to entertain the customer for whatever he requested and in a possible circumstances to fulfill it. But this scenario will be different if the customer went to a normal watch shop, where the sales person shall not wear any long sleeve or neck tie, and possibly had no deep understanding about the product that they'd sell, worst, the might not possibly interested to entertain you. According to their unofficial motto, "you want it, buy, don't want, go".

So the extra miles services are come to a very significant value to consumer, and this idea and concept are drastically implemented to most of the retail sectors to cater the need and demand from the customer.

Question is, what if the service are not provided? effect and consequences?

Few consumer believes that is they make a complain to the higher management, the issue will be solve like a magic wand. In reality, this is not Hogward, there's no Harry Potter and his gang. There's always be a consequences for what ever actions we made. More consumer find it is convenient to just pick up the phone or email the management and complain, some of their words of complain are not even happen at all, but it just naturally created by them without them notify due to the anger they carried during the complaint. In a relevant state of mind, this action will causes the service provider to change and progress according to the complainer advises, but actually it will worsen the situation. As the complain obtained by the management, they will have a different perspectives about their operation and employee, they might also presume the complainer an insane customer. Not that I admit the business management perception are rotten as it is, but the weight of this matter is not as crucial to them rather than developing a new marketing plan in order to attract more customer and more investor. (unless there's a group of angry and dissatisfy banning the business and inviting others to do so)

Bad service creates bad relationship and good service makes customer happy. We all agree with the term. McDonald with their trademark "customer is always right" has absorb the ideology, honestly, I hate the term, customer never right. A service will somehow creates an unintentionally relationship. Buy and sell activity makes us related. We need services, and when a service is provided, there's a legislation to protect consumer and service provider. But does the legislation can solve this dilemma?

Tons of bills has been passed by the parliament in the whole world due to the concern of consumer. Consumer right organization are campaigning to the public to gives information and their right, they also act as an adviser to the problem that consumer faced. But this will not help entirely the process. There will still be problems they consumer might face. So what's the remedy?

Culture, mind-set and the ability to interpret is the remedy we are looking here. Both party need to provide service in order to achieve this changes. Changes need a full cooperation from every party, to create a new perspectives of service delivery, to emphasize the important of service, creates a harmonious and competitive market. Complaining is crucial, complain indicates concern, to built a more customer oriented environment. As a provider of service, there's nothing wrong to give an extra miles, to extend the smiles and acted more professionally then ever. It gave the impression, it creates a trust and confident, it makes a strong bond of relationship and it will enhance the economy.

Business, Consumer and Relationship are very important, the weight of this matter shall not be accepted as normal. Let's think and creates more professional environment, be the one to be love not to be hate.