Program Chairs:
  
Kevin Badkoubehi
April 19, 2007   


May 24
Yoshiko Umezawa
Doctoral candidate at UCLA and 2001 Rotary
Ambassadorial Scholar


April 11
Springtime Flower Tea

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Program for...
April 26
Michael Flood

President/CEO of the Los Angeles
Regional Food Bank
"The State of Hunger in Los Angeles"

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Upcoming Programs Calendar...
May 3, 10, and 17 - TBD

May 24 - Yoshiko Umezawa - Doctoral candidate at UCLA and 2001 Rotary Ambassadorial Scholar

Other Events
Springtime Flower Tea - Wednesday, April 11 at 11 a.m. in the home and the gardens of Carol and Jim Collins. All Westwood Rotarians and their spouses are invited to enjoy the beautiful gardens and waterfall, taste the delectable tea table offerings for lunch, and listen to tales from some of our own Auxiliary members' lives. Reservations should be made, at $5 each, through Margie Downie, Auxiliary treasurer.


Oil Is a Limited Resource, at WVRC on 19 April
Yes, but we started off with the unlimited appeal of HARLAN LEWIS leading the Pledge. Next up was that duo of PP JIM DOWNIE and Cohort LENNY FRIEDMAN, who took us through Side by Side. CLAWSON BLEAK followed with the Invocation, built around the recurring phrase, “I’m awfully well for the shape I’m in”. Thank you, CLAWSON  - it doesn’t hurt to be reminded of the alternative!

Present and attending was what PP STEVE SCHERER described as a Visiting Rotarian, none other than PP CHRIS GAYNOR! TOM BARRON, who is about to become a new member, was there, but without Sponsor, PP DON NELSON.  LENNY FRIEDMAN, once again brought his spouse, Sunny, as did PDG BILL GOODWYN who came with Judi. PEGGY BLOOMFIELD named the 15 Rotarians and spouses, and I then stood up to ask if those of you who are stopping off at the SINGLETON’S would be sure to RSVP with me, please.

SEEMA PATEL, our Rotaract President, reminded us of the Orphanage visit they are doing on May 5th - just ten days away. The bus will leave and return to LA on the 5th, and both Rotaractos and Rotarians will be meeting the kids, reading to them, and generally interacting. It’s a most worthwhile project – and we NEED some Rotarians to join in, please. Cost is $25.00, which includes lunch. Prediction – if you go, you’ll be glad you did! SEEMA’S number is (909) 964-5306.

CHRIS BRADFORD was standing in for Prexy MIKE, who has a very painful back, and Chris announced that two of our five candidates to be Ambassadorial Scholars have been chosen to move on to the District level. The Committee included LENORE MULRYAN, ANN SAMSON, BARRY MARLIN, SHANE WAARBROEK, PEGGY BLOOMFIELD, PP RUDY ALVAREZ, and CHRIS BRADFORD. They did an exceptional job, and were appropriately applauded.

I became the joke teller, reviewing some new health policies for those who must post these rules. In conclusion, I must admit that previous efforts in this category somewhat surpassed my own. To be kind, the applause was sporadic… Fortunately, there was a short intermission before our Speaker came on.

SHERRY DEWANE introduced our Speaker, Douglas Achtemeier. He is a VP and Portfolio Manager for Northern Trust Bank of California, with over 19 years of portfolio management experience. He holds a bachelors degree from Washington University, St. Louis, and an MBA from Drake University. Prior to joining Northern, he was responsible for the international equity investments at the LA County Employees Retirement System, plus serving with City National Bank and the Principal Financial Group. He is a Past President of the CFA Society of Los Angeles.

Mr. Achtemeier’s talk was illustrated by an eleven-page series of statistics and graphs, which was most helpful. First was a graph showing the Conventional Oil Reserves of the world as of 2005, with the five top countries, Saudi Arabia, Iran, Iraq, Kuwait and the UAE having a total of 720 billion barrels, vs. the remaining six with 315 billion barrels (including, and last of the six,) the U.S. with 29 billion. So, let’s put it up front – the U.S.will never become energy sufficient, with perhaps 2-? % of the total reserves. Next was a listing of the top Oil producers on a given day, again in 2005. Saudi Arabia leads with 11 billion, followed closely by Russia with 8.5 billion and the U.S. with almost seven billion  - yet these two have nowhere close to the reserve capacity of the other leaders – the Russians and the U.S. are simply pumping out their reserves at a much faster rate.  And of course, the other point that stands out is the instability of most of the regimes, which are major producers.  It should be noted here that bringing a major oil field on line costs about twenty billion dollars – and you can add to that the risk factor with instable regimes. One more note – drilling today is often done over water a mile deep, or in jungle locations far from any normal supply route – and these factors increase the exploration costs dramatically.

This was followed by a page showing production of the Non-OPEC countries. Their daily total was less than 50 billion barrels. Note that Russia supplies about 12%, and is predicted to increase its production by perhaps 3% annually. Thus, Russia, which always wants to be on center stage, can no longer command military or economic clout.  Oil is thus their weapon of choice. OPEC and non-OPEC production has this recent history – In 1996, OPEC produced almost 28% of the world’s supply, non-OPEC came in at about 37% and Russia was at about 7%.  In 2005, OPEC produced about 33%, non-OPEC came in with 35%, and Russia, again, had maybe 12%.  It should be noted that, between 1974 and 2004, OPEC capacity has increased, on average, just a few billion barrels in that thirty-year period. What this means is the demand for oil continues to grow, but supply simply cannot keep up.  The result, constantly increasing prices – Northern Trust expects oil to fluctuate between $60 and $70 per barrel, at least for the next couple of years. The Oil Consumption graph for 2005 shows the U.S. at 19%, Europe and Eurasia at 25%, Asia (less China) at 21%, and China at 9%. Note that China put 7.5 million new cars on the road last year –and this number will increase as their new middle class grows. With perhaps ten million rural Chinese moving to the cities each year, their energy needs increase five fold in the city.

Now we turn to Natural Gas, the other major component of drilling for oil.  In 2005, known natural gas reserves for Europe and Eurasia was 9%, Russia was 18%, the total Middle East was 40%, North America was 4%, Asia Pacific was 8%.  The problem with moving that gas from the Middle East to where it is most needed is difficult, and expensive .As to production, figures in 2005 show Europe and Eurasia with 17%, Russia with 21%, the Middle East with 11% and the U.S. with 19% - again, we are producing much less than our reserves will support.  Once again we look at Consumption, with Europe and Eurasia using 25%, Russia 15%, the U.S. using 23% - again, we are using far more than we produce.  His last graphic shows Natural Gas production starting in 1988, and Rig Count (how many rigs are being utilized) for this same period.  Our daily production remains relatively constant, but the Rig Count has increased from 498 to over 1400 today. The reason for the increase in rigs is that the quality of production per well has receded dramatically.

He named Exxon as one company that has extensive reserves of both Oil and Gas.  Chevron/Texaco is a leader in exploration and bringing new oil to the market.  The third of this triumvirate are the oil service companies – Schlumberger, Halliburton and Trans Ocean were singled out.  The industry spends 300 billion dollars annually providing the necessary infrastructure, and most of this goes to the oil service companies. 

Q&A – How does this spill over into the coal industry?  As the price of producing electricity increases, there will be an attempt to substitute coal for oil – the problem being that coal is dirty.  PP JIM DOWNIE had several questions – Do our known reserves include Alaska?  Yes.  How accurate are the proven reserve estimates?  They must meet a certain standard, which is high, and reliable.  What is the technique for getting out oil or gas from non-performing wells?  They inject carbon dioxide, or sometimes steam, which causes the remains to sink in a pool, and this pool is then sucked up. RAY ZICKFELD –What effect will the increase in production of Ethanol have on the price of corn?  It will certainly increase the price. PP MIKE NEWMAN – Why does the price of gas in Arizona or California or Europe vary so widely?  In the U.S. local taxes vary, and in Europe, note they must import ALL their crude. LEO TSENG –Does the weakness of the dollar contribute to the price of the product?  No, oil is priced in U.S. dollars, and if you are buying with another currency, which has appreciated against U.S. currency, it does save you, as the purchaser, money.  ED GAULD had a question about the Coastal Commission, but in the interest of ending on time, he was referred to Mr. Achtemeier.

And we must add, this was a fact-filled and most helpful presentation.

                                                                           —YOE, Ernie Wolfe


WESTWOOD VILLAGE ROTARY CLUB 2006 - 2007

OFFICERS:
President 
Michael Gintz

President Elect
Christopher Bradford

Vice President
Sean M. McMillan

Treasurer
Gordon A. Fell

Secretary
Peggy Bloomfield

Executive Secretary
Ernie Wolfe

Past President
Don A. Nelson

DIRECTORS:
Community Service Chair
Shane Waarbroek

International Service Chair
Edwin S. Gauld

Membership Chair
Tony Marrone

Vocational Service Chair
Elliot Turner

Youth Service Chair
Ann Samson

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ROTARY INTERNATIONAL
PRESIDENT:

William B. Boyd

DISTRICT 5280 GOVERNOR:
    Scot Clifford


NEARBY MAKEUP SITES
Monday, Beverly Hills, BH Hotel, 9641 Sunset
Tuesday, WLA/Brentwood, Chez Mimi, 246 26th St, Santa Monica
Wednesday, Century City, Century Plaza Hotel, or
    Culver City, Wyndham Hotel, 6333 Bristol Parkway, CC, or
    Wilshire, The Ebell, 743 S. Lucerne Blvd, LA
Friday, Santa Monica, Riviera Country Club, 1250 Capri Dr, Pacific Palisades