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Since a possible problem has been mentioned concerning
oil, you may find the following interesting.
Norman E.
> F LIST: Please read this carefully. Draw your own conclusions.
> >>I've drawn mind. Wish I had a HORSE. Might even GET ONE, or at least a
> >>motorcycle!
> >>
> >>The following information was leaked to a journalist by sources inside the
> >>oil industry. You sure won't find this info on the 6'Oclock news. If you
> >>don't have a y2k contingency plan, you better sit down NOW with a pen and
> >>paper and give some SERIOUS thought to where you want to be just a short
> >>while from now, and how you will provide for your most basic needs: water,
> >>food, shelter, healthcare and self defense... You'd better reassess all of
> >>your priorities, ESPECIALLY if you live in the city. A friend of mine in
> >>NYC has finally seen the light. She is packing now to GET OUT!
> >>
> >>If you have been procrastinating, and don't have a list to work from,
> >>please visit http://cassandraproject.org/home.html where you will find a
> >>host of valuable information to help you get moving. Remember the SEALS
> >>motto: "Move, Adapt, or Die." You don't have the luxury of time.
> >>Please forward this to more people. Anyone can be on the IAHF email
> >>distribution list by sending email to jham@xxxxxxxx For information
> >>outside the scope of this article on how you can live free in an unfree
> >>world, email slave_no_more@xxxxxxxxxxx for more information and provide
> >>your phone number and best time to call.
> >>
> >>Y2K - New Analysis Of Petroleum Risks From Gold Dealers Discussion Group:
> >>
> >>http://www.kitcomm.com/cgi-bin/comments/goldlive/display_short.cgi#start
> >>>
> >>> 10-1-99
> >>>
> >>10-1-99 ELOHIM (I am copying This was a previouslyposted
> >>document for those that may have missed it.) ID#33131:
> >>Copyright © 1999 ELOHIM/Kitco Inc. All rights reserved
> >>>
> >>I did not originally post this excellent assessment of
> >>Y2k/oil, but everyone should heed this warning. I believe this will
> >>happen and the supply/demand model will become so distorted that
> >>oil will skyrocket and take gold with it. ____________
> >>>
> >>>
> >>I just discovered this board on a link from a Gary North
> >>forum.I've never paid much attention to Y2K web forums, so I'm
> >>not completely familiar with some of your terms like
> >>trolling, but I think I get the picture. I am posting here because I do
> >>have some information that I think you may find pertinent, but
> >>before I do allow me to present my background as it may have a
> >>bearing on credibility, which many of you seem to require. ( And I
> >>would, too if I were you )
> >>>
> >>I'm middle-aged and been around the horn awhile. My career has
> >>been in PR/Advertising/Marketing-Sales... as well as in
> >>broadcasting as a news reporter, editor, news anchor. At
> >>one time I worked with Rush Limbaugh before he became a
> >>"somebody". He was a news-director at an all-news station at the
> >>time. A few years later, because of my PR/Ad and News Media
> >>background I found myself involved as a consultant for the political
> >>campaign of a now former President of the United States as part of
> >>the travelling White House staff ( political side ) . That
> >>means I've rubbed shoulders with some people in high places in the
> >>past.
> >>>
> >>More background: I grew up in an area that was "oil
> >>country" in a family involved in the oil industry. I also know a lot
> >>of people in the oil & gas industry.
> >>>
> >>I've been tracking the Y2K situation since late 1997,
> >>though I do remember discussions about it as early as the late
> >>1980s. So, I'm not a newcomer to the scene. I've been diligently
> >>searching like many of you for any information and clues that will
> >>indicate what direction Y2K will actually take. I'll not bore you with
> >>a history of my early thoughts and research...other than to say my
> >>opinions see-sawed back and forth as to whether it was gonna be
> >>No Big Deal or A serious set back to society. ( No, I am not a
> >>TEOTWAKI believer ) What follows is a compilation of my
> >>reporter instincts to get the full behind the scenes
> >>story. In doing so, anonymity of sources is mandatory. These folks who
> >>confided to me, fear for their jobs if what they told me was made
> >>public.
> >>
> >>Whether it is justified or not, it was necessary for me
> >>to accept those conditions in order to get the full story from
> >>them.
> >>>
> >>Having said all of that, the very first inklings on hard first-hand
> >>data came from my conversations last year with folks I
> >>know in the Oil industry. Here's what I heard from one close
> >>relative who works in mid-level management for a major oil company in
> >>the refining division:
> >>>
> >>#1. Virtually all large Oil Wellheads are at severe risk
> >>to embedded chip problems. This is the first threat to the oil
> >>supply. This does not apply to small "stripper" wells as it was never
> >>economically viable to convert the operations to the expensive
> >>computerized systems. Also "stripper" wells supply very little oil to
> >>the industry.
> >>>
> >>#2. Transport of crude oil from the wells to refineries is at risk in
> >>the pipeline systems via SCADA embedded chip systems
> >>worldwide.
> >>>
> >>#3. Refining operations of crude oil is at risk due to 4 possible
> >>complicating problems: a--software.b--hardware=especially embedded
> systems.
> >>c-- loss of electricity ( more on this
> >>later ) . d--loss of telecommunications in the refineries and also on
> >>the delivery systems.
> >>>
> >>Let's look at #1. in detail...the oil wells. Most larger oil wells,
> >>especially those owned by the major oil companies ( the majors )
> >>have been modernized with extensive embedded chip
> >>systems.
> >>
> >>Now I've had a chance to discuss this with oil industry
> >>computer engineers that are embedded systems specialists working
> >>on changing out the rigs systems and also the pipeline and
> >>pumping stations SCADA systems. The real problems lie primarily
> >>in the Alaska, West Texas and the Gulf Coast fields where most
> >>rigs are LOADED with embedded systems. Engineers that I spoke
> >>with indicated that preliminary testing of systems that they
> >>could actually access was running between 10 and 25% dependant
> >>upon a variety of factors.
> >>>
> >>I was told that most systems are inaccessible except under
> >>extraordinary circumstances, especially off-shore oil
> >>wells with depths of several thousand feet under sea level. Most
> >>oil well systems are now considered impractical to test and or
> >>replace. One consulting engineer told me last December that many new
> >>customer's field managers still didn't know what the term Y2K
> >>even meant, and they didn't think their operations had any
> >>computer connections whatsoever. ( these old boys didn't have a
> >>clue what embedded systems were ) .
> >>>
> >>So this particular source tells me that the oil field
> >>industry throughout much of Texas and the Gulf Coast is in the
> >>dark about what they're up against. Those clients that were having
> >>assessments performed did not have a desire to assess or
> >>test embedded systems that were not easily accessed. If it
> >>was down in the "hole" forget it. Furthermore, most systems are in
> >>sealed systems and once opened can't be fixed in part because
> >>schematics are usually not available and or parts are further
> >>sealed and coated for further protection thereby making identification of
> >>key components virtually impossible. The bottom line = Most
> >>embedded systems were never...and are never...going to
> >>be checked or tested for Y2K compliance. Its a virtual
> >>impossibility
> >>
> >>PLUS...even if they did, most likely the parts to replace them will
> >>no longer be available and it's now become very
> >>difficult to find anyone who can supply a replacement system before
> >>1/1/2000. Some easier testing was done on more accessible systems
> >>which are usually newer...and the fail rates have run to 25%
> >>in some areas.
> >>>
> >>Overall, these sources estimate that based on prior
> >>limited testing,they are expecting a 10 to 20% ratio of failure, or
> >>multiple embedded systems going down on each oil well. There will
> >>be no parts to fix them and no replacement systems available
> >>for quite a long while. These sources tell me that the major oil
> >>companies have adopted a FOF policy ( fix on fail ) because it is
> >>the only affordable and practical approach, plus there's no time
> >>to get it all fixed anyway.
> >>>
> >>Keep in mind also that these fellows said that even if it's only a .1
> >>or one-tenth of 1% fail rate on embedded chips within a system
> >>there a lot of embedded systems on each well that is still enough to
> >>shut down virtually every large well in the USA, Saudi Arabia and
> >>the Gulf States plus most off-shore platforms.
> >>>
> >>I didn't even mention the nightmares that confound such
> >>a situation IF the electricity is out and or the phones
> >>don't work. That only compounds the problem. Remember too, that for
> >>much of the oil industry this will occur in the dead of
> >>winter in regions where freezing temperatures will play havoc. Also, when
> >>a well goes down, for the length's of time like in Y2k...
> >>chances are new wells will have to be drilled to get back to the oil,
> >>especially if it is an old well that was using water injection techniques.
> >>So, wells are extremely vulnerable to shut downs.
> >>>
> >>BOTTOM LINE on Oil Wells: Expect a near complete
> >>stoppage in crude oil pumping on Jan 1, 2000.
> >>>
> >>#2. SCADA Oil Pipelines ( also true for natural gas ) .
> >>The same that was said about the well heads and embedded systems
> >>is true for the pipelines. It's just too complicated and the
> >>major companies decided to adopt the FOF policy and wait to see what
> >>breaks down and then try to fix it. Another consideration is loss of
> >>electricity for any significant length of time.
> >>>
> >>#3. Refining. The larger refineries are also loaded with
> >>embedded systems creating similar problems just like the larger
> >>oil wells.Many of these are again inside sealed lines and would
> >>require major renovations to test and replace components. Also,
> >>opening embedded systems even if compliant is like putting
> >>humpty-dumpty back together again and most likely would require
> >>replacement even if found to be compliant. So, most refineries are
> >>not getting adequate checks and testing of embedded chips and
> >>systems just like their wellhead counter parts. This is not as critical
> >>a factor for smaller, older refineries that have not been upgraded
> >>like the larger refineries.
> >>>
> >>Another significant problem for some refineries in North
> >>America is the loss of electricity in freezing weather. This is
> >>now thought to be a major concern, espcially for refineries in the
> >>middle parts of the U.S. Why? because when ambient temperatures fall
> >>below 40 degrees Fahrenheit the crude oil gels inside the lines
> >>and clogs the system. This creates, among other things a significant
> >>safety hazard with risks of explosions. Equally disastrous is
> >>that once the process has clogged the systems, production ceases and a
> >>"turnaround" begins once the temperatures return to a
> >>steady temperature above 40 degrees.
> >>>
> >>Now, this temperature factor is no problem normally
> >>because electricity is used to heat the pipelines and keep the
> >>oil warm enough to not gel up and clog the system. IF the
> >>electricity goes
> >>down on January 1, 2000 in refineries in the midwest or
> >>the northeast and the areas are experiencing normal winter
> >>temperatures, the loss of electricity for even an hour could be
> >>devastating if not dangerous.
> >>>
> >>Therefore, my sources tell me that debates/discussions have
> >>developed as to possible preventative measures that might
> >>pre-empt such problems. The only alternative ( if electricity is to
> >>be lost ) is to shut the refining operations down, or at least partially
> >>stop operations. These options however could carry even greater safety
> >>risks of explosions. One particular source tells me that these
> >>options have never been tried before at his refinery and there is
> >>quite a debate going as to whether the risk of explosion
> >>is worth the benefit. The benefit is that by shutting down
> >>prematurely or partially idling by clearing the oil lines, any power
> >>loss temporarily and then being restored could enable production to
> >>resume relatively quickly. IF, however, power is lost for 3
> >>days... then, even a restoration of power will be a moot issue as most
> >>likely a 3 day outage will necessitate a "turnaround" maintenance
> >>program that usually takes about 90 days. BUT this would be
> >>predicated upon temperatures soaring back well above 40 degrees.
> >>This source indicated that if the power is out for 3 days or
> >>more it will likely be March before they can begin a turnaround and
> >>another 30-90 days after that before production could resume.
> >>>
> >>Now, the weather factor could also affect much of
> >>refining operations as far south as northern Texas and along the
> >>Gulf Coast of Louisiana. So, the largest chunk of US refining
> >>operations are at serious risk for extended interruptions of production
> >>that might last up to 6 months or longer. And that is if the electricity
> >>is off only briefly or is sporadic for only a handful of days. IF
> >>electricity is unreliable for extended periods til warm weather returns
> >>then there will likely be little oil refining production in the US
> >>for most of the year 2000...because until a refineries electricity
> >>source remains stable and trustworthy, there can be repeated lengthy
> >>production interruptions lasting far longer than the outage as more
> >>turnarounds to clean out the systems is required. So if its 3 months
> >>or 6 months of rolling brownouts or sporadic interruptions, refining
> >>will be most likely significantly hampered.
> >>>
> >>Bottom line on Refining: Don't count on much gasoline or
> >>other petroleum products for the 1st quarter of 2000 and
> >>perhaps continuing thoughout much or all of 2000. IF the grid
> >>goes down and stays down for a long time... then it will be a LONG
> >>time before you get gasoline. KEEP IN MIND... this is ALL
> >>CONTINGENT UPON EVEN GETTING CRUDE OIL TO THE REFINERY IN THE FIRST
> PLACE...
> >>which is highly doubtful.
> >>>
> >>Now, I've not even touched on the problems of the
> >>Foreign oil and non-compliant tankers. I don't have good first-hand
> >>source reports on this. I can only rely upon what I've read from
> >>internet sources.These reports do not appear to be good either. Saudi
> >>Arabia and the Gulf region along with Venzuela are in as bad a
> >>shape as we are. The tanker issue may well further complicate the
> >>import picture as well.
> >>>
> >>Overall Conclusions on Oil:
> >>>
> >>OPTIMISTIC case: ( Power stays up--and NO outages anywhere
> >>and the Phone systems have little or no problems ) IF Oil Wells
> >>experience breakdowns far lower than current testing indicates
> >>then there may be only a small drop in crude supplies, and little or
> >>no refining disruptions... meaning small shortages and A
> >>LOT HIGHER PRICES... best guess... 50 cents to a dollar more
> >>per gallon ( ? )
> >>>
> >>Middle of Road case: ( Power failures for 3 days with
> >>rolling brownouts thru January and early February, and normal
> >>winter temps everywhere ) expect U.S. Crude oil production to
> >>drop by half or more. Expect many if not most refineries in the
> >>US to shut down for extended periods until April or May when normal
> >>>
> >>operations could resume in refineries IF the oil wells
> >>are fixed. We'll assume that they are at this point. Then expect
> >>serious shortages and rationing of fuel for the first 6 months
> >>of 2000.
> >>>
> >>Bad Case: ( Power failures but not total loss of grid,
> >>brownouts roll on through spring and summer... phone service becomes
> >>unreliable for first 6 months ) . Expect little to no crude
> >>production, period. No importation of oil in significant quantities either
> >>for the first 6 months. This means refineries will sit idle til they
> >>have product to refine. If the embedded systems run a 25% fail rate as
> >>some research has indicated in past testing, and power is
> >>unreliable then chip system manufacturers will be unable to make
> >>replacements.
> >>
> >>New wells would have to be drilled and systems converted
> >>to manual...but still electricity is required to get it to
> >>the refinery.
> >>
> >>Likely then to not see much crude oil til late 2000, and
> >>then about 90 days more before refining can catch up. This all
> >>assumes that foreign oil and tankers also can be brought back around
> >>this fast also. Therefore, figure on about 1 year of very little
> >>fuel for transportation except for emergency services, military
> >>and bare minimum industry needs. Very little available for
> >>consumers, most likely.
> >>>
> >>Worst case scenario... ( power grid gone, can't restart. Phones
> >>gone due to power losses. ) ... NO oil, no gas. Get a horse. Til the
> >>power grid comes back up there just won't be any fuel. Time
> >>frame: 1 to 10 years??? [If the power grid is down and stays down
> >>for a year and then several years of rolling brownouts and
> >>blackouts].
> >>>
> >>Will it be no big deal? Or, will it be a return to the
> >>lifestyle of 100 years ago? While, no one knows for certain, the odds
> >>would tend to favor a scenario that is more than just a bump in the
> >>road. More than likely, the Oil Industry going down will severely
> >>impact the power grid...and may well take down the power grid,
> >>despite power plants stocking up on coal. Why? because, a lot of
> >>power plants run on fuel oil. Not to mention diesel trains not
> >>having fuel, nor trucks that carry consumer foods and goods. Yikes!
> >>Now do you see why things could all hinge upon oil rather than
> >>electricity???
> >>>
> >>Final thoughts on this post:
> >>>
> >>Now in my investigations over the past year, I've also researched
> >>the electricity situation conducting interviews with not only the
> >>Corporate elites but more so with the boys in the field, running
> >>down those embedded systems. But that's another sad story for
> >>another time. Same also for the phone companies.
> >>>
> >>Meanwhile, based solely upon the oil industry vulnerabilities, the
> >>oil problems could well bring down the system
> >>irregardless of the utilities. Keep this in mind as you ponder the Y2K
> >>problem. It
> >>does certainly seem to me that Y2K will trigger an oil shortage that
> >>will rival and likely exceed the 1974 oil embargo crisis. Remember
> >>it triggered a terrible recession. Think about what all this might do
> >>under current circumstances of 1999.
> >>>
> >>> RC
> >>
> >>
> >>**************************************************************
> >>IAHF:(International Advocates for Health Freedom)
> >>PO Box 625 Floyd, Virginia,24091, USA
> >>800-333-2553, overseas: 540-745-6534, 540-745-6535 fax,
> >>http://www.iahf.com email: jham@xxxxxxxx
> >>
> >>Help Get a Codex Oversight Hearing: Call Beth Clay at 202-225-5074
> >>House Government Reform and Oversight Committee- See Codex Oversight
> >>Section of IAHF website for more info. If You Belong to NNFA- Ask
> >>Them Why They Oppose Having a Codex Oversight Hearing, and Ask Why
> >>They Don't Enforce Article 14.3 in their Bylaws: (Conflict of Interest)
> >>Ask why they don't kick Warner Lambert and the rest of the drug cartel
> >>OUT of NNFA! Ask Why they endorse the NAS paper "A Risk Assessment Model
> >>For Establishing Upper Levels for Nutrients" when it is being used
> >>illegally by the FDA to break past the consumer generated impasse at
> >>Codex. [See Codex Oversight Section http://www.iahf.com]
> >>+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
> >
> >
>
>
Gary Fritz wrote:
>
> JW@xxxxxxxxxxxx wrote:
> > Mark - Don't know where you are hearing doom & gloom about Y2K
> > because all I read and hear is "No Problemo" from most all
> > corporations and people that I talk to. There is no real fear at
> > all of Y2K that I can discern, just a lot of complacency (we're
> > ready for anything).
>
> Heh. I think the response of the national electricity board of
> Indonesia's is classic, and possibly an extreme picture of the
> situation: "We'll just watch what happens in New Zealand and eastern
> Australia. That will give us over SIX HOURS to plan." :-)
>
> Not everybody is reporting "no problemo." As an example: Ed Yourdon
> is a well-respected computer consultant, author, and industry expert.
> He understands computers and their interactions pretty darn well,
> and he's made a good living with that knowledge for over 20 years.
> He's put his reputation on the line and has been trumpeting the risks
> of Y2K for 3-4 years now. And about 6 months ago he basically said
> "That's it, I can't do much more to get the word out, I'm outta here"
> -- and he left New York and disappeared somewhere into New Mexico.
> Where, you might notice, it's much warmer in January, and the place
> isn't crawling with 8 million people who might suddenly be without
> heat, food, cash, etc. Is he overreacting? Maybe. But it kinda
> makes you wonder.
>
> Looking at his site (www.yourdon.com) I see that he's resurfaced on
> the Web again, apparently from his NM digs. But he's still very
> definitely flogging the Y2K warnings. (Cynics will say he's just
> flogging his Y2K books, and that may be partly true. But I doubt he
> vacated his New York home and risked his reputation just to sell a
> couple of scare books.)
>
> See http://www.yourdon.com/articles/articlesummary.html for a listing
> of Yourdon's Y2K articles. The "Open Letter to Alan Greenspan" is
> recent and fairly interesting.
>
> > I recall seeing something recently that said the US was 99% ready
> > for Y2K but that the rest of the world would have problems.
>
> Personally I suspect the 99% figure is high -- I think 80-90% might
> be closer, but that's speculation on my part. (On the other hand,
> some reports say that as many as 50% of "small businesses" in the
> country have done absolutely NOTHING to prepare for Y2K. Do they
> *need* to do anything? Don't know. But if they do, they haven't.)
> But for the sake of discussion let's say the U.S. is 100% ready.
>
> However, many Y2K types suspect that much/most of the rest of the
> world is 12-18 months or more behind us. So what does that mean to
> us?
>
> > Of course, the rest of the world sources a lot of raw materials and
> > finished products to us that drive our now service based economy
> > forward. But what if the supply incoming lines stop working?
>
> Bingo. I don't have the exact figures at hand, but the numbers I'm
> using here are close. Consider just one scenario:
>
> Back in 1974, the U.S. was importing roughly 25% of our oil needs.
> Then OPEC threw an embargo at us. Remember what that did to the U.S.
> economy? It helped to trigger a fairly nasty recession. And that
> was just for a *REDUCTION* in our 25% imports. Maybe that translated
> to a 10% cut in our oil imports?
>
> Currently the U.S. imports roughly 55% of our oil needs.
>
> There are many steps between "oil under the sand" and "gas in your
> SUV," most of which require significant computer support: pumping
> equipment, pipelines, refineries, tankers, etc etc etc. And most of
> that is outside the U.S., where we know the Y2K issues are not
> handled as well as they are here.
>
> Let's say a lot of those operations are date-insensitive, and the
> computers won't care what year it is. But remember it only takes ONE
> link in the chain to bring the whole process to a halt.
>
> Let's say we're lucky and 50% of the oil supply lines keep working.
> That means we'd "only" see a TWENTY-FIVE PERCENT CUT in our energy
> sources.
>
> Imagine what that would do to supply, to prices, to the economy, to
> the ability of truckers to deliver food to your local grocery store,
> etc. Talk about a domino effect. And that's just ONE key commodity.
> What happens if you add that on top of massive supply problems in
> other areas, banking problems, etc, worldwide? What happens if this
> event occurs in an economic environment that at least some observers
> feel is vastly over-leveraged and over-extended?
>
> And nobody knows how long it would take to put Humpty Dumpty back
> together again.
>
> Will it happen? Again, nobody knows. I fervently hope that Yourdon
> and all the other Y2K doomsayers are 100% wrong, and 1/1/2000 is a
> minor speedbump. But as traders, it's our job to assess probability
> and risk, and act accordingly. The chances of everything working
> perfectly are so slim that I personally have taken a few steps (not
> nearly enough!) to reduce the impact on my family.
>
> Gary
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