Alexis-

All roads lead to the oil patch, but briefly just for the record.

Too bad that we’re leaving Risk Management in the hands of the politicians. The oil shales in Colorado have an estimated yield of 3 to 5 times the size of the largest oil reserves in the world which are of course in Saudi Arabia. Based on government-subsidized research, it is complicated to extract – have to heat the deposits for several years and construct an ice wall to isolate groundwater from contamination.

The equivalent yield of the (low sulfur) coal deposits in Montana is similar order of magnitude. Coal has the advantage of not just being plentiful, but cheap, efficient, and capable of yielding electricity, liquid fuel, and hydrogen for future fuel cells. The latter requiring the expensive conversion machinery.

And I see that wildcatters came back when price reached $120.

So our government will vote on (1) known coal deposits with some attendant capital cost for infrastructure, versus (2) known oil shale deposits with similar cost of heating and containing miles of subsurface formations versus (3) the unknown deposits of domestic drilling – onshore or offshore, leased or unleased land, ANWR or closeby.

And that doesn’t even introduce the green elephant of carbon emissions and allegations of environmental deterioration.

The Internet began in this country as DARPA with government funding. The private equity derived from applications and “content providers.” Although I think the former is still outpacing the latter.

My point is that one can discern (1) the elements of a classic con game in the oil industry and (2) an industry that has lost the requisite appetite for even marginal risk – a dead appetite that cannot be rekindled even under threat of Islamic-inspired terrorism and tribal feudalism. I am not as a rabid an opponent as others, but I do support the move away from oil – not coal or natural gas – as much as I support dilution of the Saudi connection.

I am not shocked that there is drinking in this bar, but in my judgment it is time to get out of Dodge.