Resource World Magazine

ments vowed independency with marginal consequences. This time is different: it would not be a shock, it would be expected, and the world will respond to a closure with an ever harder push toward alternatives. In particular, the progress in the exploitation of geothermal energy poses a serious market threat to current oil suppliers. Although 28 Gwh in geothermal projects under foot seem very little compared to the 5 Twh in oil consumed, more efficient technologies make geothermal projects ever more economically appealing. In Europe and America, oil consumption has already been shrinking for the last few years. Although the decline had been induced by the economic downturn, smarter energy usage is probably here to stay. In other words, should it not already be too late for the Middle Eastern suppliers to keep their customers, they will have to start flooding the markets. In addition, 3.5 million barrels are already bypassing the strait through Saudi Arabia to the Red Sea and from the United Arab Emirates to the Gulf of Oman. Hence, to cripple the world economy, blocking the Strait of Hormuz is likely not enough. The Suez Canal between the Red Sea and the Mediterranean Sea would undoubtedly be affected in an escalating conflict, in defiance of the international treaty that guarantees its usage in times of peace or war. The canal serves as a bypass of the much longer route around the Horn of Africa for goods and energy from Asia and the Middle East headed for Europe and the latter's exports back to the former regions. With an average of 49 ships a day, almost 8% of world's sea trade pass through the canal. A quarter of the tonnage through the canal is carbon energy. The rest is containers, bulk, and road vehicles. While the Strait of Hormuz would lead to a disruption of some oil supplies, the alternative route around the Horn of Africa would merely delay delivery of goods that should have passed through the Suez Canal. Supertankers, that are too large, already choose the southern route. A closure of the strait and the canal at the same time would be more difficult to manage for the world economy, particularly because of its impact on containerized cargo. For global oil supply, the canal represents a drop in the bucket. Nevertheless, blockages of any of the two passages would be politically leveraged out of proportion. This will agitate financial markets and send gold to soaring heights. The collateral effects of a war in the Middle East would still be immense: a new energy-political landscape, a push into alternative technologies, a collective effort to make behavioural changes in the usage of energy, and a more deeply impoverished Middle East. n A.J. Deus lives in Vancouver, BC and is an author, film-maker, economist, and entrepreneur. More columns by A.J. Deus can be found at www.ajdeus.org. Contact A.J. Deus at ajdeus@yahoo.com. This material is taken from sources believed to be reliable and is for informational purposes only. Any investment decision should be made only after prior consultation with investment professionals. february 2013 Saturn Minerals adds oil prospects by Joel Chury After engaging in an extensive coal exploration program, Saturn Minerals Inc. [SMI-TSXV] found itself also adopting the moniker of oil explorer. Now, on top of having one of the largest coal discoveries in Canada, Saturn can also boast a claim to some of the largest oil and gas blocks in the Saskatchewan. Located to the north of the Bakken, and on the east side of the province, near the Manitoba border, Saturn's lands incorporate 370,000 acres of oil rights. After acquiring the lands for coal exploration, discoveries of oil seeps with great reservoir quality source rock were encountered in 2010. "Witnessing source rock is like spotting the smoking gun for us," says Stan Szary, President and CEO of Saturn Minerals. "That rock is what you'll find in an oil field. So if you put this type of rock under the right heat and pressure, it'll start sweating out oil." The source rock in question was 2.7 metres in thickness, ranging in total organic content (TOC) levels from 7-14%; on a comparative basis, the Bakken formation to the south averages 11% TOC. Since Saturn's team was initially assembled for the coal play (which is still a key asset in the company's future plans), the company enlisted a strategic partnership with people who knew the area. This rally cry came in the form of Murray Swanson and Chris Barton, who founded the private company, Vector Exploration, in order to work solely on Saturn's holdings. The duo came fresh off of the sale of their former company, Reliable Energy Corp. to Crescent Point Energy Corp. [CPG-TSX] in March of 2012 for nearly $100 million. "We were very pleased to finalize an agreement with the Vector Team," says Szary. "The partnership enables us to easily transition our oil holdings into an operating entity with an established team." Swanson and Barton are no strangers to Saskatchewan oil plays. With Reliable alone, they successfully identified and drilled over 70 wells in Saskatchewan and Manitoba, all into similar geology as that of Saturn's. Moving forward, the partnership will be working on getting to know their oil window more intimately. First will be an extensive 2D seismic program to take a better look at the deeper basins. Following which, will be a series of 3 to 4 exploratory wells. Given that the oil they are targeting is light oil that only requires conventional vertical wells, a safe estimate for well costs in this area is anywhere from $300,000 to $400,000. Through the development process, Saturn will be looking for support from neighbouring First Nations bands. In an effort to bring the communities into the exploration process, Saturn helped form Inowending Exploration and Development Corp. as a First Nations natural resource company. The effort is designed to create opportunity and wealth. The prospect of developing both coal and oil of this magnitude should help to further those goals. n www.resourceworld.com 85

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