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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
Home / Markets / Industries / Energy
Thursday, September 04, 2008
Petrostar ETH Zero CO2 Technology Update
Comtex
VANCOUVER, BRITISH COLUMBIA, Sep 04, 2008 (MARKET WIRE via COMTEX) ----Petrostar Petroleum Corporation (TSX VENTURE: PEP)(FRANKFURT: LMQ) "Petrostar" or the "Company") announces that on June 11, 2008 it installed its first ETH (Electric Tank Heater) and control panel, which has been operating flawlessly with 100% efficiency. The unit is capable of replacing current burner tube tank heating devices and has a zero CO2 emission signature as well as reducing operating costs by using power generated from top drive motors and eliminating the fuel requirements of the burner units. The ETH unit has been delivering between 29,000-14,000 BTU/hr to heat the oil and treat/clean it before shipping. The ETH technology is currently CSA compliant for field replacement and will be fully CSA approved for installation at the manufacturing and construction stage with production and sales tank suppliers in the near future.
Currently the Company will showcase the system to prospective clients and users and expects to announce initial sales of the units shortly. The unit will be available for inspection at the Lloydminster Oil show commencing September 10-12, 2008.
The Company will also produce a dual ETH control panel, which will allow two units to be run in tandem and incorporate a power phase control that supplies power on a rotating basis to the heating unit. This provides a better distribution of heat to the tank and circulation of the emulsions stored within them. An additional order for six new units is currently in progress with more to be placed shortly. The Company is also planning to expand its Lloydminster, AB base to accommodate future construction and assembly of the ETH units under its own management.
The Company is also measuring and monitoring the reduction of CO2 that occurs on tank units that are currently using the burner tube equipment to maintain production and sales tank heating.
The burner tube systems using propane or natural gas fuels produce quantities of CO2 in the range of 14kg-25 kg/day into the atmosphere whereas the ETH produces zero. This may be the most important factor in making this system a valuable commercial product as regulatory agencies impose pending penalties for those who do not reduce their emissions.
On behalf of the Board of Directors,
Robert A. Sim
President and Director
Safe Harbor Statement and Disclaimer:
This Press Release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects", "projects", "plans", and certain of the other foregoing statements may be deemed forward-looking statements. Although Petrostar Petroleum Corporation believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the development and production of oil wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of production operations; risks with respect to oil prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil prices and other risk factors.
Contacts: Petrostar Petroleum Corporation 604-662-3005, ext. 105 thorgauti@petrostarpetroleum.ca www.petrostarpetroleum.ca
SOURCE: Petrostar Petroleum Corporation
mailto:thorgauti@petrostarpetroleum.ca http://www.petrostarpetroleum.ca
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