It makes sense that if there are still large pools of undiscovered oil. Some of them would be under one or both polar ice caps. It turns out the Arctic is a great place to drill for crude.

According to The Wall Street Journal, "The Arctic contains just over a fifth of the world's undiscovered, recoverable oil and natural-gas resources, according to a review released Wednesday, confirming its potential as the final frontier for energy exploration."

The data from the study raises two questions. The first is who owns the rights? Russia claims some of them. So does Denmark. The U.S. is even making come claims for part of the territory.

The other issue is the standard environmental one. Will drilling in the Arctic endanger any wildlife, create oil spills, or disrupt the ice cap? Since the ice is melting due to global warming, that concern may not last for long.

As oil prices rise, it becomes more evident with each passing month there are deposits of oil off-shore, in protected lands, and in regions that could not be reached before because the technology did not exist.

Unfortunately, getting at the oil could involve years of legal battles. By then maybe the T. Boone Pickens windmill farms will be delivering vast quantities of energy and it won't matter.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• If the financial crisis hasn't crippled banks enough, the cost to build bank loan reserves may be just as painful, according to the Wall Street Journal's "Heard on the Street". The need for larger reserves is eating away at earnings and is showing up in first quarter reports for banks such as Bank of America Corporation (NYSE: BAC), whose results took an additional hit because of a $6B addition to its loan loss reserve.
• Just four months after Journal parent Dow Jones & Co. was bought by Rupert Murdoch's News Corporation (NYSE: NWS), Wall Street Journal managing editor Marcus Brauchli is expected to resign, according to the Wall Street Journal. Journal publisher Robert Thomson may temporarily take over until a new managing editor is hired.
• The Financial Times reported that Citigroup Incorporated (NYSE: C) is seeking advice from IT group Hewlett-Packard Company (NYSE: HPQ) on how to overcome a crisis without breaking up the company.

WEB SITES:

• According to Reuters, activist shareholders in ASM International (NASDAQ: ASMI) believe, by giving more equity to top managers, that they can boost its value by $1.6B.

At the current pace of usage, there exists a real threat of depletion of current domestic helium supplies. So say managers of our only national helium stockpile near Amarillo Texas. A report from Kim McGuire at the St Louis Dispatch makes clear that this reality concerns more than the just attendees of children's birthday parties and a few Donald Duck impersonators.

Scientist claim that helium reserves could be depleted in as little as ten years, a reality which worries experts in the fields of medicine, microchip manufacture, nuclear science, and Garfield balloons. Helium, which is abundant in our universe yet relatively scarce here on earth, plays a major role in many facets of industrial production. It is reported that dwindling helium supplies have driven helium prices up by as much as 50% over the past twelve months, deeply affecting companies such as Praxair, Inc. (NYSE: PX). It is also worthy of note that NASA uses massive amounts of helium annually to pressurize fuel tanks for shuttle missions.

Lee Sobotka, a chemistry and physics professor at Washington University stated "...it's incumbent upon us to have a vision, and tell it like it is, (helium is) a resource that is more strictly nonrenewable than either oil or gas."

Presently, efforts are successfully under way to make helium use more efficient and to recapture helium at it's points of use. Helium as an element can be captured as a by product of natural gas extraction but intensity in those efforts needs to be redoubled. Adding to the supply concerns currently faced are the facts that two off shore helium producers have faltered in their efforts to bring helium plants on line, and several domestic producers have shuttered domestic helium plants in recent years.

China Petroleum & Chemical (NYSE: SNP) volatility up into 8/27 EPS & Outlook. SNP, an energy and chemical company based in the People's Republic of China, is expected to report EPS on August 27. SNP is recently up $4.12 to $107. SBSH said on August 22: "We value SNP ADRs at $104 based on a sum-of-the-parts analysis." WTI Crude Futures are up 1.61% to $70.96 according to Bloomberg. SNP September option implied volatility of 42 is above its 26-week average of 33 according to Track Data, suggesting larger price risk.

CNOOC Ltd (NYSE: CEO) put volatility Elevated into EPS & Outlook. CEO as of 12/31/06, CEO owned net proved reserves of approximately 2.53 billion barrels of oil. CEO is expected to report EPS on August 29. CEO is recently up $2.28 to $117.28. WTI Crude Futures are up 1.61% to $70.96 according to Bloomberg. CEO September call option implied volatility is at 32, puts are at 46; above its 26-week average of 30 according to Track Data, suggesting larger risk.

PetroChina (NYSE: PTR) put volatility at 41 after reporting net profit increase. PTR, a People's Republic of China run petroleum and natural gas company, is recently up $3.71 to $144.35. PTR reported that its net profit for the first half of 2007 was up 1.4% from the first half of 2006. WTI Crude Futures are up 1.61% to $70.96 according to Bloomberg. PTR call option implied volatility is at 25, puts are at 41. PTR 26-week average option implied volatility is 29 according to Track Data. PTR puts are expensive because PTR is not easy to borrow.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.