SECTIONS Home Society SciTech Planet Cosmos SPECIAL Contents About Factoid: Almost 940 million gallons of oil have spilled worldwide in the decade since the Exxon Valdez spill, including 10 spills of more than 11 million gallons, according to the Oil Spill Intelligence Report.

Merger Fever Hits Oil Industry as Uncertainties Loom The world's biggest oil companies are looking to gobble up second-tier producers, anticipating a harsher competitive climate ahead. By GSReport Start Date: 4/10/99 Only weeks ago, oil prices in the West were at historic lows, pushed down by a supply glut and soft demand in markets hit hard by recent economic troubles, notably Japan. The prices were so low that a number of marginal producers were forced to default on debt or close down entirely. Meanwhile, the world's biggest producers talked merger, and looked around for second-tier "cruiserweight" companies ripe for picking. On April 1, the "super major" BP Amoco, product of a recent mega-merger, announced yet another merger with Atlantic Richfield. Last year's biggest merger story, Exxon Mobil, and Royal Dutch/Shell Group were both said to be on the prowl as well. Hot second-tier targets include Texaco, Chevron, Phillips and Conoco. Texaco is reportedly eyeing a takeover of Burlington Resources Inc., the largest of the U.S. independent oil and gas producers. Another scenario says Texaco and Chevron might merge. "Oil companies have to consolidate to be players worldwide," said Lewis Kreps, an analyst with Dain Rauscher Wessels in Dallas. "Look for Chevron and Texaco to wake up and smell the coffee." Driving this merger frenzy is the perception that only giant capital and global reach will be able to compete in the oil industry of the future. Estimates of available reserves have been down-scaled recently, and the cost of extraction is going up. In sum, the days of cheap oil are probably numbered. Consumers are already feeling the pinch. As recently as mid-February, regular gasoline was selling at less than one dollar a gallon in many parts of the United States. Then OPEC announced production cuts, directly aimed at boosting price. And prices rose accordingly -- and very fast. As of early April, the average price for regular gas in California was reportedly $1.46, with premium gasoline selling at nearly two dollars per gallon. In response, some outraged consumers have called, via the internet, for a "Gas-Out" on April 30, asking that no one buy gasoline that day. The outrage is understandable, but probably irrelevant. Gasoline prices will go up more -- probably a lot more -- in the months and years ahead. In fact, it is possible that the price of oil will become quite dizzying in the not-too-distant future. Some analysts have predicted prices of $50, $80 or even $100 per barrel. Can that happen? Yes, it can. And, by some accounts, it should. A saying attributed to the late Shah of Iran makes the point: "Oil is too valuable to burn." So, one might ask, what would we call $100-per-barrel oil? In the near-term, consumers might call it a catastrophe. But oil companies, looking ahead to a world of rapidly changing energy needs and resources, might instead call it a versatile raw material from which can be made almost innumerable useful products, every one of them far more valuable than the equivalent amount of gasoline. Petroleum-based products include plastics, composite materials, numerous chemicals, solvents, lubricants, medical and agricultural products -- and the list goes on. If and when the world stops burning oil, the remaining supplies will undoubtedly be turned to far better uses than the creation of exhaust. But the transition to an economy not dependent upon oil will be difficult at best, and for the moment, the oil producing companies are feeling the heat. It can only be expected that more mergers and higher fuel prices lie ahead. Excelsior, Michael Lindemann's new novel (written under the pen name Michael Paul), depicts a wholly plausible near future in which human cloning is both widespread and widely abused; terrorists have access to target-specific biological weapons; recreational space travel is commonplace; and mounting pressures of global climate change, environmental decline, population growth and civil unrest inspire radical new approaches to urban security. Built by Frontier on a Macintosh on 6/17/00; 12:03:29 PM. Web Comments - Produced by Larry Lowe Served 3520 times since 4/10/99.

Cities Hold Key to Winning Environmental Battle The growth of cities is greatly outpacing the growth of human population. Cities now account for the bulk of carbon emissions, water consumption and other key aspects of human impact upon the planet. A Vision of a Coming Age of Prosperity In 'The Long Boom,' author Peter Schwartz and colleagues argue that economic and social conditions could get steadily better for the majority of Earth's people in the years ahead. Water Shortages Threaten Food Supplies and Peace In much of the world, producing adequate supplies of food increasingly depends upon unsustainable levels of irrigation. Methods exist to use available water much more efficiently, but time is running short. World May Be on Edge of Environmental Revolution There are growing signs that the world may be nearing an environmental revolution comparable to the political revolution that swept Eastern Europe a decade ago, according to the Worldwatch Institute. Anniversaries: U.S. Recalls Two Historic Disasters During the last week of March, 1999, the U.S. looked back on the Three Mile Island nuclear disaster of 20 years ago, and the Exxon Valdez oil spill disaster ten years ago. Revolt Against Genetically Modified Foods Gains Force In recent months, a consumer backlash against genetically modified (GM) foods has exploded across much of Europe and now threatens to stop the GM industry in its tracks. Nuclear Industry Faces Slow Slide to Oblivion According to the Worldwatch Institute, the nuclear power industry is at its peak of power capacity now and will start declining within two years, toward eventual extinction sometime in the mid-21st century. The Future According to Gordon-Michael Scallion Do the startling predictions of this 'Latter-Day Nostradamus' make sense? Some actually do -- but many others don't. Iraq, Balkans Unrest Raise Danger of Nuke Mistake A top Russian defense official said on March 2, 1999 that Russia's disputes with the West over Iraq and Yugoslavia could increase the chances that Moscow would retaliate after a false warning of a missile attack. Biogenetics Treaty Talks Stall in Cartagena UN-sponsored talks in Cartagena, Colombia, aimed at curbing proliferation of genetically altered foods, fell apart in mid-February, 1999 in the face of resistance from the United States and several other nations.