Exxon Dives Deep Into High-Risk Exploration

• FEBRUARY 2, 2010

By RUSSELL GOLD

Hardly known as a wildcatter, Exxon Mobil Corp. is searching for oil in most of the world's regions where high-risk exploration is under way, even as other big oil companies are being more selective and cutting capital spending.

So far, though, Exxon has little to show from its exploration campaign and needs to make large discoveries soon to justify the increased spending.

Exxon has "tried to put a tiger in the exploration hat," said Neil Mc Mahon, a Sanford C. Bernstein & Co. analyst. But it has "only pulled out a fluffy bunny so far."

Exxon on Monday said capital spending reached $27.1 billion last year, up 3.6% from a year earlier. Fourth-quarter spending reached $8.3 billion, Exxon's highest three-month total ever. Exploration expenses charged to income, which capture spending on unsuccessful wells, rose 39% last year.

The Irving, Texas, company posted fourth-quarter profit of $6.05 billion, down 23% from a year earlier. Revenue rose 6.1% to $89.84 billion.

Exxon's refining segment—which turns crude oil into gasoline, diesel and other petroleum products—swung to a $189 million operating loss. But Exxon's upstream operation, which finds and produces oil and natural gas, generated operating income of $5.78 billion, up 2.6%.

The results underscore why the company is increasing>>>

Natural gas find may spur interest in shallow Gulf waters

By BRETT CLANTON
Copyright 2010 Houston Chronicle

Jan. 11, 2010, 9:29PM

Mostly left for dead years ago by Big Oil and scoured by smaller firms since, the shallow waters of the Gulf of Mexico are likely to get a second look by companies of all sizes after word Monday of what may be one of the largest discoveries in the area in decades.

A group led by New Orleans' McMoRan Exploration Co. said it found significant quantities of natural gas in a 5-mile-deep well it drilled in about 20 feet of water at McMoRan's Davy Jones prospect just 10 miles off the Louisiana coast.

Estimates of the size of the discovery range from 2 trillion to 6 trillion cubic feet of natural gas, rivaling the largest gas finds ever made in the Gulf. But the companies said they will have to do further drilling to confirm the resource potential.

The discovery heralds the potential for yet another frontier for oil and gas development in an area of the Gulf of Mexico called the Outer Continental Shelf that has been drilled extensively for nearly a century.

And it suggests the same rock and sand layers that in recent years yielded major oil and gas discoveries several hundred miles out in the Gulf may be equally rich with oil and gas in shallow water areas, where exploration and production is much easier and cheaper.

“It's definitely going to bring a number >>>

Running for First in the Clean-Energy Race

By Daniel J. Weiss, Susan Lyon | January 28, 2010

President Barack Obama reiterated in his State of the Union address last night his vision to get America running on clean energy. “Providing incentives for energy efficiency and clean energy are the right thing to do for our future,” he said, “because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

He used the annual address to advocate for a clean-energy investment agenda that would create jobs and reduce carbon pollution. The Obama administration’s efforts began on January 20, 2009, and it has already produced benefits. The American Recovery and Reinvestment Act, which became law on February 17, 2009, includes $70 billion for clean-energy investments and will create nearly 900,000 new clean-energy jobs. One million low-income homes will be weatherized because of ARRA, and wind, solar, and other renewable electricity generation will double by 2012. ARRA also included $20 billion in clean-energy tax cuts for wind and solar power investments and the purchase of ultraefficient cars.

President Obama made it clear that more>>>

Interior to look at drilling in Atlantic Ocean

By MATTHEW DALY

The Associated Press
Monday, January 25, 2010; 6:11 PM

WASHINGTON -- Interior Secretary Ken Salazar says he is nearly ready to begin an environmental analysis that could lead to drilling in areas up to 200 miles offshore in the Atlantic Ocean.

Salazar told reporters he will soon launch a 45-day>>>

Obama's Good Ideas

Posted 01/28/2010 07:01 PM ET

Policy: President Obama's State of the Union speech contained a lot to criticize. But it also had some things that we might actually like — if done in the right way.

State of the Union speeches are usually forgotten as soon as they're delivered. But it pays to look at the details that presidents put into a speech. In President Obama's case, a number of things caught our eye:

• Nuclear power. Obama said he might be open to "a new generation of safe, clean nuclear power plants." The technology already exists, yet nuclear provides just 19% of our electric power. This should be slam dunk.

• Offshore oil and gas drilling. Obama vowed to consider our offshore energy resources. Good idea. With 86 billion barrels of oil and 472 trillion cubic feet of natural gas off our shores, this too should be a no-brainer.

As the output of key foreign suppliers such as Mexico and Venezuela declines, the U.S. becomes vulnerable to disruptions. With offshore oil — not to mention the 2 trillion barrels of crude trapped in Western shale-rock formations — the U.S. could be energy-secure for at least the next century.

• Business tax cuts.>>>

No Substitute For Fossil Fuels

Posted 12/22/2009 06:43 PM ET

Energy: Earlier this year, Congress approved a scheme to pour $80 billion — on top of the tens of billions already spent — into renewables. A government report released last week indicates the money will be wasted.

Renewable energy is the shiny gem that everyone wants but no one can have. Not even a president. Campaigning last year in Lansing, Mich., President Barack Obama said that it was his goal for the U.S. to generate 10% of its electric power from renewable sources by 2012 and 25% by 2025. But he cannot, by the force of will or executive order, change the laws of physics and economics.

America has long relied on fossil fuels to power its economy. Oil, natural gas and coal provide about 84% of the nation's energy.

And for good reason. They are plentiful and typically easy to retrieve, and, consequently, cheap.

At the other end of the spectrum are renewable sources such as solar, wind, biomass and geothermal. They supply only about 4% of our energy, the remainder coming from hydro and nuclear power.

An axis of environmentalists and Democrats want to change this ratio, because, according to the usual complaint, we depend too heavily on the fossil fuels that emit carbon dioxide.

Trouble is, the market for renewables is poor. Few want to use the inefficient, unreliable and expensive sources. But that hasn't slowed the renewable energy campaign, which has succeeded in persuading the public that renewables are a sensible energy source and convincing Congress to fund supporters' daydreams.

The government can continue to "invest" in renewables, and the dreamers will keep using public money to find the magic formula. But little will change over the next 25 years.

The federal Energy Information Administration's Annual Energy Outlook says in 2035, demand for liquid fuels will increase by almost 10% over 2008 levels, natural gas by nearly 7% and coal by 12%.

While use of renewables will increase as well>>>

Pelosi, Democrats Playing With Oil, America's Future