I know you are sitting on the edges of your seats to know who won the Trivia contest from last week and to see the answer key, but first I wanted to share with you a word about energy prices on this first day of Autumn 2022.

 

 

Aaaaaaggggghhhhh!

 

 

Phew, just needed to get that out of my system. So, what the heck is happening to oil prices? I wish I could tell you. It’s been quite the week, with the shot being the US Fed dropping an interest rate anvil on the wily coyote US economy and the chaser being the capitulation of energy prices (and markets) today. I really shouldn’t be surprised since it happens every year about this time, as the market looks to punk me ahead of my Q3 Fearless Forecast report card, which isn’t going to be pretty. But this year seems particularly heartless given how long I am energy stocks.

 

 

You know what else isn’t going to be pretty? The October 5^th OPEC meeting. The market seems to be throwing down the gauntlet to OPEC and Saudi Arabia, daring them to cut back production. I suspect they will oblige.

 

 

Interestingly enough, while the price action seems to be driven by well-founded recession fears (to quote Jay Powell: “I must break you”) the physical market hasn’t really changed that substantially, if anything it is poised to get tighter as China inches closer to its own capitulation on COVID policy and, even more importantly, it looks like Justin Trudeau is close to ditching the ArriveCAN app which as we all know will open up tourism to Canada and increase consumption of oil by an exponential amount.

 

 

An added piece to my theory that this isn’t driven by fundamentals in the physical market? Just look at the giant wrecking ball that the US dollar has become. The unintended consequences of Jay Powell fighting inflation with a bazooka are a surging US dollar, a collapse in the Canadian (former petro) dollar, the pound and the Euro. Don’t even get me started on what this action is going to do to emerging markets, especially ones that have US dollar denominated debt.

 

 

That said, we are headed into winter. Europe needs to heat a continent. Natural Gas is $7 an MCF heading into winter and withdrawal season – an unthinkably positive market for producers. On top of that, NO ONE IS DRILLING! Well, not no one, but you know what I mean.

 

 

When the head of Saudi Aramco calls out the rest of the world for taking a capex break and closing their eyes and ears to energy security and scarcity, you know what he sees coming. Who are you going to believe on prices – some mouthy hack on Twitter or the CEO of the single largest oil producer in the world?

 

 

Stay the course my friends – fortune favours the brave, or something like that.

 

Anyway, on to Trivia! It was a tight contest, then it wasn’t and we have a winner. Before I announce who it is, I just have to express my surprise at how many people missed this question:

 

 

This man, who always hits his depth, is considered the best off-shore wildcat driller in cinematic history. He doesn’t know how to fail. Name him.

 

 

Good lord people – It’s Harry Stamper! Played with gusto by none other than John McClane himself – Brice Willis. The answer was in the question – he doesn’t know how to fail!

 

 

Alright, the winner is non other than Les Stelmach, who, when he isn’t up late at night trying to find out obscure answers to internet trivia contests, is an energy investor and portfolio manager of note here in Calgary and an inveterate tweeter who also exhibits requisite amounts of substance and gravitas in between making fun of stuff.

 

 

He also holds the dubious honour of not knowing that Shane Falco, played by erstwhile Canadian Keanu Reeves was the greatest replacement quarterback for the Washington Team. Not to be confused with college QB legend and FBI agent Johnny Utah, also played by Keanu Reeves in the seminal surfing and stealing film Point Break.

 

He also didn’t get Harry Stamper.

 

But, he did score 26.5 out of a possible 37 points to take home the prize – a Crude Observations T-Shirt that he is required to model and post to social media.

 

 

OK – Trivia answers.

 

 

• Geography

 

1. Name the two largest sub-national landlocked producers of oil in North America. Answer: Alberta and North Dakota
2. In the seminal golf movie Caddyshack, noted Bon Vivant and erstwhile philosopher Ty Webb said “the shortest distance between two points is a straight line in the complete and opposite direction.” Given this logic, how far must Alberta natural gas travel to reach a refinery in Saint John New Brunswick? Answer: About 12,000 kms.
3. With an estimated 70 billion barrels of recoverable oil, this reservoir is considered the largest conventional oilfield in the world. Name the field and the country it resides in. Answer: Ghawar Field, Saudi Arabia
4. Ironically, this contiguous heavy oil deposit contains approximately 133 billion barrels of oil in place, making it that actual largest oilfield in the world. Name the field and the location. Answer: Athabsaca Oilsands, Alberta.
5. If you took all the oil and gas pipelines in North America and laid them end to end, how many return trips to the moon would you be able to take? Answer: Two and a half.
6. Where was the first producing oilwell in North America located? Answer: Oil Springs, Ontario

 

• Entertainment

 

1. This American music icon recorded a tribute to oil and gas workers in 1963. Name the artist and the song. Answer: Johnny Cash, Roughneck.
2. Starring a former oilrig worker, this movie is considered among the greatest oil and gas films ever produced. Name the movie and the star that worked the rigs. Answer: Boom Town, starring Clark Gable
3. There Will be Blood garnered Daniel Day-Lewis one of his three Best Actor Oscars. What was the name of the book on which the movie was based and who was the author. Answer: Oil! By Upton Sinclair
4. This man, who always hits his depth, is considered the best off-shore wildcat driller in cinematic history. He doesn’t know how to fail. Name him. Answer: Harry Stamper
5. Deepwater Horizon, the movie chronicling the Macondo blowout in the Gulf of Mexico, rightly distills the majority of the culpability for the blowout to BP, personified by its on rig “company man” Donald Vidrine. Which actor channeled his inner Snidely Whiplash to play that role. Answer: John Malkovich
6. The fictional town of Dillon Texas, the setting for Friday Night Lights and the Dillon Panthers are based on what real life football team and Texas town. Answer: Permian High School Panthers from Odessa, Texas

 

• History

 

1. After drilling the first commercial oil well in the United States in 1859 in Titusville, Pennsylvania, this man “colonel” executed what is arguably the first frac’ed oil well by dropping a torpedo down the bore hole of a well in 1865. Fortunately, no one died. Name him. Answer: “Colonel” Edwin Drake
2. The first commercial development of the oil sands was begun in what year and by what company. Answer: 1967 by Great Canadian Oil Sands, owned by Sun Oil Company
3. The earliest historical reference to the use of oil products was over 4000 years ago by this historian. Answer: Herodotus – reference to oil used as tar and pitch “the oil, which the Persians call rhadinace, is dark and evil-smelling”
4. John D. Rockefeller, the founder of Standard Oil, got his start in the industry by investing in a refinery in what city. Answer: Cleveland.
5. Natural gas has been used commercially since the 1700’s when it was used to light street lamps in Britain. In 1885 this man invented a burner that opened up a whole range of uses for the now easily controlled combustion of the fuel. Name him. Answer: Robert Bunsen.
6. The FSO Safer is a tanker that has been stranded off the coast of Yemen for the past five years. It contains an estimated 1.1 million barrels of oil and if it ruptures and spills into the Red Sea it will be an environmental catastrophe 4 times worse than the Exxon Valdez oil spill in 1989. What was the name of the reef the Exxon Valdez hit. Answer: The Bligh Reef.

 

• Arts & Literature

 

1. This obscure academic is considered one of the most influential writers on the subject of energy. Name him. Answer: Vaclav Smil
2. Name the term coined by Canadian lobbyist and gadfly Ezra Levant in his book of the same name touting the moral superiority of Canadian oil production or what The Economist called a “polemic defence of the tar sands”. What year was the book published and what was the term. Answer: 2010, Ethical Oil
3. “The Prize” by Daniel Yergin is widely considered one of the most comprehensive narratives about the oil and gas industry ever prepared. What was the name of his less popular follow up book. Answer: The Quest
4. Robert Service is known for his many odes to Yukon gold mining. The closest the energy industry has is this obscure Texas poet. Name him. Answer: Joe Clay “Blackie” Wilson
5. Name the Hollywood star who wrote the preface for It’s a Gas: The Allure of the Gas Station, a photo book documenting gas stations around the world. Answer: Jay Leno
6. It has been dubbed the world’s most beautiful gas station. Where is it located and which famous architect is it credited to? Answer: Nun’s Island Quebec (Montreal) and Ludwig Mies van der Rohe

 

• Science & Nature

 

1. Name the four types of fossil fuels. Answer: Petroleum, Coal, Natural Gas and Orimulsion
2. What fuel has the highest energy density? Answer: Hydrogen
3. What is the process of injecting water, sand and chemicals under extremely high pressure into an oil well called? Answer: Fracing
4. With oil under tremendous pressure underground in ever deeper wells, temperatures can be very high – reaching up to what temperature? (Celsius or Fahrenheit) Answer: 133 degrees Celsius
5. Name the three primary processes used in the refining of crude oil. Answer: Separation, Conversion and Treating
6. Just for fun, name 5 (aside from fuel) of the more than 6000 products that are made with or derived from oil and gas Answer: Caulking, Fertilizer, Dice, Antihistamines, Shoelace Aglets

 

• Sports & Leisure

 

1. What was Coach Eric Taylor’s combined won-loss record as coach of the Dillon Panthers and East Dillon Lions, including playoffs. Answer: 47-15 (12-2 playoffs)
2. How many of the NFL’s 32 franchises have owners who made their fortunes in the energy or immediately related industry? Answer: 8
3. Name the Quarterback who led the Washington team to an improbable come from behind victory in the last game of the season to earn a playoff berth as a replacement player. Answer: Shane Falco
4. Two franchises in big league professional sports have been called the Oilers. Name teams and the greatest player each one has produced. Answer: Houston Oilers/Earl Campbell and Edmonton Oilers/Wayne Gretzky
5. What is the average amount of fuel burned in a NASCAR race assuming 40 cars? Answer: 6,000 gallons
6. Name the actor who played #3 above. Answer: Keanu Reeves

 

Bonus Question

 

What was the subject of the very first Crude Observations in May of 2015 and who designed the logo. Answer: The election of the provincial NDP. The Crude Observations logo was designed by my dad.