Obama: "we can’t just drill our way to lower gas prices"

No doubt fracking and what the US was doing is the only thing that OPEC thinks about.

Apparently such facile and simplistic explanations thatconveniently fit on a bumpersticker are more than sufficient explanation for the right.

 

The concept of supply and demand is simple.

 

I think you are making some suppositions there that may not be accurate.

The bottom line will always be at what price point is oil production in the United States profitable? That number is currently between $60 and $70 a barrel. Again, not as cheap as the dream-like $40 a barrel but cheap enough to give consumers a price break and drive down gas prices for the foreseeable future. Why would investors pass on making a profit? There isn't any reason for them to pull out. Will there be some industry streamlining? Probably. That would have happened anyway. It always does. There will still be cheaper gas and good paying jobs as a result, even if not on the scale of the initial projections.

That is still good for investors AND for America.

 

You are correct and OPEC doesn't want to stop the domestic boom in the US.. Do you remember 1986 when Papa Bush begged them to raise the ppb because domestic producers were on the ropes? They did so... and the lay-offs stopped.

- - - Updated - - -

Fracking has been around for 30 years and is widely used among oil producers in the ME.

 

OPEC'rs looking a bit bewildered:

OPEC appears in urgent need of late-life care.The historic output agreements, put together so painstakingly last year, are failing. Nearly 12 months of shuttle diplomacy culminated in two deals that would see 22 countries cut production by nearly 1.8 million barrels a day. Implementation has been better than for any previous output cut, with compliance put at 106 percent in May. A resounding success? Hardly.

We're now in the final month of those deals and oil prices are lower than when they were agreed. Not only have producers sacrificed volume, and they earn less for each barrel they do produce.

Crude has fallen back below levels last seen before OPEC's November output deal.

Just sticking to current output levels could be difficult for the rest of 2017: early maintenance work has helped several OPEC members meet their targets but that can't continue. Then there's the problem of recovering output from Libya and Nigeria, both exempt from the cuts.

The malaise runs much deeper, though. Beneath a veneer of unity, rifts are developing among core Middle East members. The Saudi-led confrontation with Qatar could create the most serious split since Iraq invaded Kuwait in 1990. Iraq might be in Mohammed bin Salman's sights next, as Iran's influence there grows and Baghdad lags the rest in implementing output cuts.

As if the internal failings weren't enough, OPEC seems to have lost touch with reality. Ministers say higher prices are needed to pay for investment in future production capacity, issuing dire warnings of a future supply crunch. They said the same thing to justify prices soaring above $100 a barrel in 2008. It wasn't true then, and it may not be true now.

The oil industry has responded to the price slump by slashing costs. Projects that needed $100 crude to break even have magically been redesigned to be profitable at half that level.

OPEC has completely misjudged the North American shale industry and seems not to understand how it is still evolving rapidly. It's a little like trying to explain the internet to my 85-year-old mother, or my 12-year-old daughter trying to explain social media to me. As consultant Morten Frisch tells me, drilling horizontal sidetracks from abandoned wells in the Permian Basin is yielding a 91 percent internal rate of return on a $7 million investment and delivering 1,500 barrels a day of crude. He predicts large production increases from vertical wells in previously produced areas in the Permian.

Having failed to use the good times to invest for a future of low oil prices, OPEC is facing a crisis of old age. It is falling apart internally, confounded by the world and increasingly irrelevant.

https://www.bloomberg.com/gadfly/articles/2017-06-25/opec-looks-totally-bewildered-by-the-oil-market

 

HAVE YOU HUGGED A FRACKER TODAY? Even Shale’s Secondary Effects Are Staggering.

Hydraulic fracturing and horizontal well drilling have given American companies access to vast new reserves of oil and gas, and have dramatically increased the production of hydrocarbons here in the United States. Since 2010, the U.S. has added roughly 5 million barrels of oil per day, and natural gas production is up roughly 33 percent over that same time period.

The effects of this energy revolution have been felt the world over—they’ve brought gasoline prices down for American drivers while remaking the global oil market. But here in the U.S., they’ve been an enormous boon to an industry most Americans are likely unfamiliar with: petrochemicals. As the WSJ reports, cheap petrochemical feedstocks (a byproduct of oil and gas drilling) are pushing the U.S. petrochemical industry to new heights. . . .

That’s a lot of money, and it’s a staggering number of jobs. This is one of the unheralded consequences of this new energy renaissance that the U.S. finds itself in, and it’s creating a rosier economic outlook for years to come.

This big win for America has also produced a number of losers, namely Middle Eastern petrostates who in years past had looked to petrochemicals as an important industry to help them diversify away from simply pumping and exporting crude oil and natural gas. But thanks to cheap shale-sourced petrochemical feedstocks, the lion’s share of new investment money in the industry is heading the United States’ way. Once again, shale is lifting the U.S. up even as it puts petrostates in peril.



Good.

 

No link? Whining about Obama "not knowing anything" is really choice. Trump doesn't know squat about anything, can't read, but can manage his cult membership quite well, just like any early dictator. Just like in Venezuela...

 

The link is still there. Look a little harder.

 

And yet, he whipped your asses!

MORE MARKET SHARE FOR AMERICAN FRACKERS: OPEC agrees oil cut extension to end of 2018.

Two OPEC delegates told Reuters the group had agreed to extend the cuts by nine months until the end of 2018, as largely anticipated by the market.

OPEC also decided to cap the output of Nigeria at around 1.8 million bpd but had yet to agree a cap for Libya. Both countries have been previously exempt from cuts due to unrest and lower-than-normal production.

The Organization of the Petroleum Exporting Countries has yet to meet with non-OPEC producers led by Russia, with the meeting scheduled to begin after 1500 GMT.

Before the earlier, OPEC-only meeting started at the group’s headquarters in Vienna on Thursday, Saudi Energy Minister Khalid al-Falih said it was premature to talk about exiting the cuts at least for a couple of quarters and added that the group would examine progress at its next meeting in June.

“When we get to an exit, we are going to do it very gradually … to make sure we don’t shock the market,” he said.

OPEC is being aided in its efforts, quite accidentally, by socialist member state Venezuela.

 

American frackers are VERY anxious.

 

Over OPEC production cuts? Why, that's silly!

 

Wonderful news for my province. Thanks for posting this

 

Nope. In a new MIT study they claim that frackers are overestimating their production.. and if you have followed closely over the past several weeks American frackers are afraid of a bubble.

They have become far more cost effective, but they don't think they can cut their costs much further.

 

With OPEC in production cuts, they don't have to, Silly!

 

For now.. Corporate interests in Russia want to increase production.

 

What would be the point of Russian oil producers joining the OPEC "cuts" that OPEC members themselves routinely cheat on?

 

Corporate interests in Russia want to INCREASE production and drive the ppb to $40.. For now Putin decided to extend his cooperation with OPEC.. which stands at $60 a barrel today.

 

Certainly our private fracking industry has restored a vibrant American Industry.

 

The price of gas has been dropping for years - including under Obama.

 

Fracking also produces more methane than conventional oil production.

Have you ever wondered why fracking has been used in the ME since the 1960s?

 

Don't fight the warmth!

 

LATE-STAGE SOCIALISM: China sues Venezuela’s oil company over unpaid bills.

According to court documents filed on Nov. 27 in Houston, Texas, Sinopec USA claims that PDVSA has failed to pay for half of a $43.5 million order for steel products. The lawsuit was first reported by the Financial Times on Wednesday.

The disputed amount is small when compared to the massive debts Venezuela is struggling to repay.

Venezuela and PDVSA owe more than $60 billion just to bondholders. In total, the country owes $196 billion, according to a paper published by the Harvard Law Roundtable.

China’s state banks loaned $60 billion to Venezuela between 2007 and 2016, and the lawsuit is just the latest sign that Beijing is growing impatient with the embattled South American country.

Even the comradely international socialist brotherhood gets tense when the bills don’t get paid.

 

So which one of you are going to tell the coal miners that it was "Drill Baby Drill!" that helped put the final nail in King Coal's coffin?

 

Uh..huh. I'm not sure what that has to do with my post but cool story bro.

 

Those Obama era methane regulations? Nevermind



Take it up with the cows

While the hapless Obama administration was in charge of the Department of the Interior there was a move to impose new methane regulations on any drilling taking place on federal lands. This led to a number of lawsuits from groups such as the American Petroleum Institute which kept bringing up inconvenient facts such as how the government was violating their own rules for introducing new regulations and that the science behind the government’s claims was mostly bunk.

This week, however, things changed once again. With a new announcement from the Bureau of Land Management (which falls under the Interior Department), as Emily Litella might say… never mind. (Reuters)

The Trump administration will delay an Obama-era rule limiting emissions of the powerful greenhouse gas methane from oil and gas operations on federal and tribal lands, it said on Thursday, a move slammed by hysterical environmentalists.

The Bureau of Land Management, an office of the Department of Interior, will officially suspend the rule on Friday to “avoid imposing likely considerable and immediate compliance costs on operators for requirements that may be rescinded or significantly revised in the near future,” it said in a document to be published on Friday.

Implementation will be delayed one year until Jan. 17, 2019.

Energy companies say the rule, finalized at the end of the Obama administration, could cost them tens of thousands of dollars per well, and some driller groups had sued the previous administration.

The two key phrases here to watch are, “delayed by one year” and, more to the point, “requirements that may be rescinded or significantly revised in the near future.” In other words, at some point between now and January of 2019 that new rule is almost certainly going away or being changed to match scientific reality.

The government’s own scientists have shot down the complaint that those methane regulations were supposedly addressing. That’s precisely what drove the current lawsuit against the government over this matter. The mandatory reductions were going to cost a fortune and would not significantly impact the perceived problem.

Yes, there is methane in the atmosphere, but it’s of two distinct types which we are readily able to identify. Thermogenic methane is the sort which winds up being released from industrial activity such as natural gas drilling. Biogenic methane comes from decomposing vegetation and, yes… cows farting and belching. (Well, other animals as well, but we have a lot of cows.) Since the mid-nineties, thermogenic methane levels have been dropping because the industry doesn’t like to see their profits literally going up in flames. They took the steps required to capture the valuable gas at the source without government intervention. Meanwhile, biogenic methane levels have been on the rise.

If these new rules were enacted it wouldn’t do much, if anything, to reduce methane levels from drilling. If they want to go after methane emissions,they can talk to the folks in California, they are regulating the beef and dairy industry in terms of bovine methane emissions.

California is taking its fight against global warming to the farm. The nation’s leading agricultural state is now targeting greenhouse gases produced by dairy cows and other livestock.

Despite strong opposition from farmers, Gov. Jerry Brown signed legislation in September that for the first time regulates heat-trapping gases from livestock operations and landfills.

Cattle and other farm animals are major sources of methane, a greenhouse gas many times more potent than carbon dioxide as a heat-trapping gas. Methane is released when they belch, pass gas and make manure.

See? You really can’t make this stuff up. They’re regulating cow flatulence. California is truly a wonder to behold.

Just for the record, I’ve been doing my part. I’m eating the cows as quickly as I can.

https://hotair.com/archives/2017/12/09/obama-era-methane-regulations-nevermind/