From Nixon To Obama - Energy Independence Is a Political Wish Only
President Nixon was the first U.S. President to talk about the need for America to be “ energy independent “. With the usual lack of a political will and hubris over oil resources America has become more dependent on foreign oil . In fact the Middle East supplies and the nearly two million barrels s day from Venezuela are now viewed as dangerous to America . A steady decline in U.S. domestic production has resulted in a massive deficit as oil imports rose at a time when the commodity price was predicted to go to $ 200 a barrel.
President Nixon was also the first President to have created an " enemies list “. His enemies – real and perceived were political / domestic. Today America has real enemies and a number are financed by U.S. oil imports. President Obama was correct and succinct when he said that America was financing both sides of the war on terror.
Political Rhetoric And Money Equals Power
The political demands for energy independence got louder when the public was alarmed at a the possibility of $ 5.00 a gallon gasoline . Worse then the oil bills were the swagger and power that $ 100 a barrel oil brought to regimes in Russia, Iran and Venezuela. Iran has used its petro- dollars to arm militants in Lebanon, Iraq and Gaza – against the U.S. and Israel. Venezuela has been able to appropriate U.S. oil concessions in their tar sands and to “ buy “ loyalty in South America by promises of a non- American development bank , natural gas pipelines and solidarity backed by loans . Russia invaded Georgia , cut-off natural gas to Europe and expanded the investments of quasi – government companies in western industries such as steel and mining.
The Fortunes Of America's Enemies Have Been Lessened
The fall of a barrel of oil from $ 147 to less than $ 50 has meant a huge tax cut for all American drivers and every industry that uses oil / gasoline. Airlines are but one example of an industry given a new lease on life .although according to The Richardson / Bass Quant oil prices will rise over the next nine months and oil dependent firms will again have to deal with higher input charges.
Today Iran and Venezuela cannot meet their budgets because to balance they require an oil price of $ 60 or more. Russia is in an equally serious position with an economy dependent on energy for 60 % of all revenues. America can only hope that budgets for trouble making will be curtailed along with the falling revenue.
Russian Oil Problems Strengthen Putin
The crash of oil prices have reduced powerful tycoons to go begging for bailouts from the Kremlin. Their power rose by attachment to the Putting leadership and now he can consolidate his gains by choosing which companies , industries and individuals will survive. The so-called oligarchs will have their ranks thinned. Even the survivors will be poorer as they give up control or swaths of shares in return for support.
Your Portfolio Can Profit Now
The lower oil prices have brought back an examination of the U.S. super majors benefiting from a ( still ) large cash flow and a share price that reflects the current stock market rather than a future increase in the commodity or an upturn on Wall Street.
The newest edition of The Apprentice Millionaire Portfolio Book has selected a number of oil companies for investment in today’s climate . Here are a few from the chapter on Energy:
Exxon ( XOM)
The world’s top shareholder owned company has been weakened by its retail division but has been acting to sell company owned outlets. It has been aggressive in share buyback programs over the last several years. "ExxonMobil’s full year 2008 earnings excluding special items were a record
$44,060 million, up 8% from 2007. Earnings per share excluding special items were up
16% reflecting the benefit of the share purchase program. Net income of $45,220 million
in 2008 was also a record, up 11% from 2007
Conoco ( COP)
Conoco is an international energy company but has been impacted by the global downturn in the general economy and in the commodity pricing. On January 28, 2009 - ConocoPhillips [NYSE:COP] reported a fourth-quarter net loss of $31,764 million, or $21.37 per share. This compared with net income of $4,371 million, or $2.71 per share, for the same quarter in 2007. Revenues were $44.5 billion, versus $52.7 billion a year ago.
Fourth-quarter 2008 adjusted earnings were $1,914 million or $1.28 per share. This compares with fourth-quarter 2007 adjusted earnings of $4,108 million, or $2.55 per share.
Chevron Texaco ( CVX)
Chevron has recently reported a “ major “ find in the Gulf.
On January 30, 2009 – the Company reported net income of $4.90 billion ($2.44 per share - diluted) for the fourth quarter 2008, up from $4.88 billion ($2.32 per share - diluted) in the year-ago period.
Results for the 2008 fourth quarter included a gain of approximately $600 million on an upstream asset-exchange transaction. Foreign-currency effects benefited net income by $478 million in the period, compared with a reduction to earnings of $2 million in the 2007 fourth quarter.
Full-year 2008 net income was $23.93 billion ($11.67 per share - diluted), up 28 percent from $18.69 billion ($8.77 per share - diluted) in 2007
As investors – we will leave the politics to Washington - but drill down for oil profits.
Source The Apprentice Millionaire Program
www.amprogram.com
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