Today's Business Press

Arctic Oil Rush!

Go north, young man. That would be the advice Big Oil is embracing this morning now that the U.S. Geological Survey has declaredthe Arctic Circle to house some 20 percent of the world’s yet-to-be-discovered oil and natural gas reserves.

This isn’t a great surprise: Super majors like Exxon Mobil and BP have known for decades that the Arctic housed vast fossil fuel resources, but exploration was always stymied by tricky ice and permafrost, not to mention the exorbitant costs of tapping and extracting Arctic oil. Now, thanks to global warming caused by, um, fossil fuels, the ice obstacle is retreating while any oil price over, say, $60 a barrel would still make the exploration costs palatable.

So while Peak Oil pundits, environmentalists, Al Gore, and even T. Boone Pickens beat their heads against the wall, the oil companies and many Arctic nations (think the United States, Canada, Norway, and Russia) see money to be made and influence to be swayed. Already companies like Royal Dutch Shell PLC have spent more than $2 billion acquiring drilling leases in Alaska’s Chukchi Sea, the Wall Street Journal reports. This new estimate of Arctic natural wealth may make energy planners and politicians think twice before declaring an end to the era of oil. That, as the Journal headline puts it, is “cold comfort” for the rest of us.

Speaking of fossil fuel use, it’s been 100 years since Henry Ford launched the Model T and an era of mass production. Today his company once more will declare that its future lies in small cars, the New York Times reports, in a profile of chief executive Alan Mulally. An industry outsider (he came from Boeing), Mulally holds no truck with the SUV culture that dominated U.S. auto production in recent decades. Today’s announcement represents “a big bet on the future of the American auto industry, involving the redirection of billions of dollars in investment, that Mr. Mulally hopes will help Ford thrive, not just survive,” writes the NYT.

It’s a sentiment grudgingly endorsed by GM, which fell further behind Toyota in global sales during the last three months. Worrysome for the company, its overseas business—hit by the global credit crunch—failed to offset plummeting domestic sales this time around.

Kevin Johnson, the veteran Microsoft executive in charge of its online efforts and its flagship Windows operating system, is leaving the company to head up Juniper Networks. This isn’t any ordinary tech-sector move. Johnson led Microsoft’s bid to buy Yahoo, and his departure reflects “deep dissatisfaction by Microsoft Chief Executive Steve Ballmer with the performance of Microsoft’s online business,” writes the WSJ. Cue much Microsoftology analysis, best captured by the Financial Times, which attributes “Mr Johnson’s abrupt departure” to “lying a poor third to Google and Yahoo [online], … the failure of its bid for Yahoo and the debacle over the marketing of its Windows Vista operating system over the last year.” And where are Johnson’s new offices located? Right next door to Yahoo, notes All Things Digital.

With an approving nod from President Bush, the House of Representatives voted in favor of the mammoth mortgage-rescue bill that will provide up to $300 billion in assistance to struggling homeowners (more than 1 million homeowners have now lost their homes) and bolster the mortgage giants Fannie Mae and Freddie Mac—at an estimated cost of $25 billion all by itself. With the Senate expected to pass the measure, shares in the two companies rose sharply.

Finally, if the stock market is making you stressed, why not try a little yoga? The WSJ notes that an increasing number of fund managers are taking yoga classes to relax. It writes: “Bond-fund guru Mr. [William] Gross, a founder of Pimco, does yoga five days a week and says some of his best ideas come when he is standing on his head.” No doubt that’s the best position to assess a downward dog of a market.