The Pipeline's Bleak Flow
By Andy Carpenter 
It’s unfortunate that Sacvan Bercovitch already used American Jeremiad as a book title. Because, had you collected all that’s been written during the past six months about oil and mortgages and placed it into a single volume, its only appropriate title would be American Jeremiad, A Dark Prophecy. According to the media, dear reader, the end is very near. Of course, what the intelligentsia in the media won’t tell you and me – the dullards who comprise hoi polloi – is how we should react to their black lamentations. So, let me help you out. Since I spent a couple of decades trying to pretend I was self-important enough to belong to the media, let me give you an inside tip on how its denizens will celebrate the end of the world. In other words, what you should be doing. If the end of the world is actually here, then you need to go out, get drunk and get laid. And, if you really want to accurately replicate what reporters, columnists and TV talk-show hosts experience… go out, get drunk, try – and fail – to get laid. Oh, that reminds me… I saw gazillionaire TV talk show host Bill O’Reilly at a ball game at Fenway Park. He was with an age-appropriate date… man, it must really sting to be a 60ish media God and have to date women your own age. Maybe the end really is near. Oil Quiz If, however, you think the media is lazy, lacks curiosity and is generally wrong, then you believe tomorrow counts and that we will, somehow, soldier on. You are a realist, which today makes you an optimist. You believe that people and institutions regularly dig themselves into holes, out of which they always find a way to climb – even out of a hole as huge as the one the US has excavated during the past eight years. It also means you don’t believe the end is near, so are burning for the answer to the one-question quiz I offered you in the Tuesday IDE Unplugged email. It’s the one that had a free subscription to my Asia Business & Investing newsletter as a prize for the first correct answer. Sadly, there were no winners. No one got the answer right. That didn’t make me too happy. After all, I was trying to give something away. I’ll try another give-a-way soon, next time on a Saturday. But to refresh your memory – the question was: What is “the real and truly critical reason that the Alaskan National Wildlife Refuge needs to be opened for drilling? And, I will accept no answers as being correct if they suggest ANWR drilling has anything to do with more supply or gas prices in the manner in which President Bush makes the ANWR case. Though, I write cryptically, supply is a crucial part of the correct answer – just not the way you’d expect.” The Answer Aside from the prospect of expanding domestic oil supplies, new production would help alleviate huge fears about the viability of the Trans Alaskan Pipeline System. The 800-mile, four-feet-in-diameter pipeline is about half above ground and half below ground. Managing temperatures within it have always been a major concern. Below ground, temperatures can reach 180 degrees. Above ground, Alaskan temperatures can range from 100 degrees above zero to 80 degrees below zero. The temperature of the oil in the pipe must remain constant; too hot, the pipeline can be damaged. Worse, from a supply point of view, too cold can make oil flow difficult, at best. Today, the pipeline transports 700,000 barrels of oil daily, down from 2.1 million when the Prudhoe Bay fields were at peak production in 1988. That number will continue to drop as Prudhoe reserves continue to decline. So you can guess the kicker. If the amount of oil in the pipeline falls too low in the bitter Arctic climate, it’s unable able to flow south to the tankers at Valdez that take it to California for processing. The pipe needs to be full and flowing at a moderate pace or its contents could freeze in the winter. And, as you can surmise, subtracting 700,000 barrels a day from the US market, for months at a time, would have a nasty effect on prices at the pump.
INTERNAL ENDORSEMENT Just this Once BELIEVE THE HYPE! It was the email that shocked the investment world. One noted investment authority told his readers to take seven huge stock market gains on one day… SEVEN HUGE WINNERS on one day that ranged from 526% to 102%... seven, and on stocks… not options. But that was just the beginning! It now looks to be setting up to happen again this year, too. That’s why you must check out the whole story right here.
Gone With The Flow This flow problem is why, just a few weeks ago, the Interior Department made 2.6 million acres of potentially oil-rich territory in northern Alaska available for energy exploration. This North Slope exploration is in what’s known as the National Petroleum Reserve-Alaska. And, by the way, during all the debate about drilling in the ANWR, do you remember anyone mentioning that the supply from Prudhoe Bay was 66% lower than peak (1.4 million barrels a day down) and dropping? Or that, as far back as 1988, US oil experts knew, almost to the drop, how little oil would be flowing from Prudhoe today? That’s 20 years of our federal head in the sand… er, tundra. I thought global demand – you know the damned Chinese and Indians adopting the US lifestyle – was to blame. Hidden ANWR Message Here’s the other critical factor no one is telling you. The pipeline was intended to operate for 30 years after it opened in 1977. But, it’s not surprising that given today’s critical energy situation, some people say its life could be extended indefinitely – with some serious infrastructure spending – if Prudhoe Bay keeps producing or the ANWR is opened for drilling. Finally, as for the ANWR debate, you should find it interesting that while the Interior Department opened up a huge new swath of the National Petroleum Reserve-Alaska to new exploration it also did something interesting. It deferred for 10-years, any decision to open 600,000 acres of land north of Teshekpuk Lake. That area is the summer home for thousands of migrating caribou and millions of waterfowl. This is an area, not in the ANWR, that is just as oil-rich and just as environmentally sensitive as the Alaskan National Wildlife Refuge. Hmmmmmm, as BB might write. FREE CREDIT REPORT Now, for a dramatic shift in gears. Mark Sept. 24th on your calendar. It’s the deadline to register for up to nine months of free credit monitoring from TransUnion. The freebie is the result of a class action lawsuit filed years ago and settled in May. Plaintiffs accused TransUnion and Acxiom Corp. of violating state and federal laws by selling lists containing consumers’ personal and financial information to outsiders pitching credit and insurance. Naturally, the companies denied any wrongdoing, but settled anyway. To be eligible for free credit monitoring, you must have had an open credit account or line of credit from a U.S. credit grantor any time from Jan. 1, 1987, to May 28th of this year. In other words, according to the settlement notice, you’re eligible if you had a credit card, auto loan, mortgage or student loan in the past 10 years. The settlement is worth at least $75 million. That will cover the cost of credit monitoring, a donation to nonprofits, lawyers' fees and possible payments to individuals who file lawsuits on their own. If there’s cash left over, it will be distributed to consumers who registered for payments. You have a few options under the settlement. For instance, you can take six months of free credit monitoring - worth about $60 - that will allow you to block lenders from seeing your report and entitle you to unlimited daily access to your TransUnion credit report and score. Plus, you can sign up to get a cash distribution if there's any money left over in the settlement. Or, you can choose nine months of credit monitoring that comes with extra perks. This is worth about $115. But under this option, you forfeit the right to get a cash payment and to sue the companies. Register online at www.ListClassAction.com by Sept. 24th to receive free credit monitoring. That’s also the deadline if you want to register online or by mail to receive any potential cash payout. But, it will be at least two years after all the dust settles before it’s known whether there is enough money to disburse to consumers. For more information, call 866-416-3470. Or, e-mail your questions to administrator@listclassaction.com or write to List Class Action Settlement, PO Box 6336, Portland, OR 97228-6336. Have a great weekend. Andy
P.S. To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com. [Ed. Note:In the past 10 months Asia Business & Investing subscribers have booked outlandish gains. These recent winners include 562%, 300%, 383% 197% 149% 123%, 102%, 649%, 319%, 179%, 77%, 196% 100%, 126%, 185% and 430%. Find out more about how you could tap into superb gains like these right here.]
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