Energy Discussion

[Hair Warrior]

While we may be able to produce more energy domestically 'energy independence' doesn't decouple our energy markets from the rest of the world, even though natural gas is still more locally priced oil prices are set by the international market and we have very little influence over it. And since it is, largely, an open market countries that are oil producers still make a lot of money even if we don't buy. Sanctions can bite but plenty of countries still need oil and often don't care where it comes from.

Oil prices comes in two varieties: WTI light sweet crude and Brent crude. I think I posted something about it 6 years ago or something, before I figured out that if you say “WTI” to a bunch of naval aviators they get confused.

The thing about oil is, yes you can still produce it and sell it, but there is a break-even threshhold where certain countries just reduce their output, because it’s no longer profitable at that price per barrel. It definitely hurts the bottom line of Russia, Iran, Venezuela, etc when their barrels sell for $35 rather than $65 on that open global market. Their costs are basically the same no matter what, and their economies are far more reliant on oil than the US economy. In fact, oil prices in the US have a weird bonus at both ends if the scale - when gas is cheap, it’s great for the shipping business, agriculture, retail, and tourism; when gas is expensive, it’s good for big petro companies as well as for renewables, hybrids, electrics, solar. But that’s because we are more flexible and innovative than the heavy oil producing countries.

 

[exNavyOffRec]

The problem with any of these plans that eliminate natural gas, is the infrastructure is already in place for gas. Do you really think someone will go to every door that is serviced with gas and force them to switch to electricity? Nationally, natural gas makes up close to 50% of home heating fuel. Think about that, half of every freaking house in the US has natural gas. Not to mention, who is going to pay for the conversion for the low income customers? It's just shows how out of touch with reality some of these people (elected officials) in DC really are.

Seattle is already heading that way.

Mayor Durkan Announces Ban on Fossil Fuels for Heating in New Construction to Further Electrify Buildings Using Clean Energy - Office of the Mayor

New Energy Code Update will Eliminate Use of Fossil Fuels for Space Heating and Most Water Heating in New Commercial and Large Multi-family Construction to Increase Energy Efficiency and On-Site Renewable Energy New Greenhouse Gas Emissions Report Indicates 8.3% Increase in Emissions from...

durkan.seattle.gov

 

[Jim123]

Shale/tar sands production used to be breakeven at about $100/bbl. That's probably closer to about $50 these days (of course it varies, just like Jed Clampett's swamp didn't take much to break even compared to getting oil out from under the bottom of the Gulf of Mexico or the North Sea... or out of the ground from West Texas).

Ironically, the breakeven point came down because the oil industry put a lot of money into figuring out how to produce shale oil cheaper. They put a lot of money into it because the price of oil got so high for a few years. The price of oil got as high as it did because some certain oil-producing countries, who don't like us, decided to run up the price. That's their economic prerogative. I do think it's funny that they shot themselves in the foot in the long run.

In the 1980s the West had a concerted strategy to drive petro prices down in order to put stress on the Russian economy. That was planned though.

Oil is a pretty crazy boom-bust business. I don't think that's gonna change until we suck the last drop out of the ground and that ain't happening anytime soon.

 

[Hair Warrior]

There’s a new thread about “Pipeline Wait Time” but don’t bother clicking - it’s not about Keystone XL.

 

[Randy Daytona]

The appendices of Peter Zeihan's book The Absent Superpower have a pretty good discussion of green energy's shortcomings with actual numbers to back it up (not sure if they're cited since I listened to it on Audible). The first part of that book will also teach you everything you need to know about shale. Long story short, green energy isn't anywhere close to being able to supplant petroleum as an energy provider locally or globally for a whole host of reasons across a wide spectrum.

Agreed on Zeihan - his books are usually on multiple reading lists and his newsletters are always a solid and perceptive read. For those not familiar, he is a former STRATFOR geopolitical analyst whose perspective of problems is usually based on the triad of geography, demographics and energy.

Here is a short video for those that are interested:

 

[Flash]

The thing about oil is, yes you can still produce it and sell it, but there is a break-even threshhold where certain countries just reduce their output, because it’s no longer profitable at that price per barrel. It definitely hurts the bottom line of Russia, Iran, Venezuela, etc when their barrels sell for $35 rather than $65 on that open global market. Their costs are basically the same no matter what, and their economies are far more reliant on oil than the US economy. In fact, oil prices in the US have a weird bonus at both ends if the scale - when gas is cheap, it’s great for the shipping business, agriculture, retail, and tourism; when gas is expensive, it’s good for big petro companies as well as for renewables, hybrids, electrics, solar. But that’s because we are more flexible and innovative than the heavy oil producing countries.

That's all great but it still doesn't make the price of oil pumped out of the ground here independent of international oil prices.

 

[SlickAg]

Shocked she isn’t being called out yet for her “tactical untruths”.

Kamala Harris: "Joe Biden will not ban fracking. That is a fact"

The senator also denied that Biden supports the Green New Deal.

www.axios.com

 

[SlickAg]

Gee whiz, if you can’t trust non-biased, objective mainstream media fact-checkers, who can you trust in this crazy world?

https://www.nytimes.com/2021/01/25/...hange.html#click=[URL]https://t.co/BgVADtQnRA

[/URL]

 

[Treetop Flyer]

New Mexico Officials Taken Aback By Biden Assault On Oil And Gas

A little more than 2 years ago, in September, 2018, I wrote about the half-billion dollar windfall the State of New Mexico had just received during the course of a single sale of oil and gas leases on federal lands in the state.

www.forbes.com

There was just no way to see it coming. Sad the governor’s free in-state tuition plan needs oil and gas. Oops.

 

[SlickAg]

New Mexico Officials Taken Aback By Biden Assault On Oil And Gas

A little more than 2 years ago, in September, 2018, I wrote about the half-billion dollar windfall the State of New Mexico had just received during the course of a single sale of oil and gas leases on federal lands in the state.

www.forbes.com

There was just no way to see it coming. Sad the governor’s free in-state tuition plan needs oil and gas. Oops.

Maybe they actually believed the AP fact-checkers?
??

“Biden was endorsed by the United Association of Union Plumbers and Pipefitters in the 2020 election. The group was notably disappointed with the decision. “In revoking this permit, the Biden Administration has chosen to listen to the voices of fringe activists instead of union members and the American consumer on Day 1,” General Association President Mark McManus said in a statement.”

Unions that endorsed Biden slam him for 'slashing thousands of jobs' by blocking Keystone XL pipeline

TC Energy Corp, the company tasked with building the pipeline, announced they would have to layoff 1,000 workers

www.google.com

 

[DanMa1156]

While we may be able to produce more energy domestically 'energy independence' doesn't decouple our energy markets from the rest of the world, even though natural gas is still more locally priced oil prices are set by the international market and we have very little influence over it. And since it is, largely, an open market countries that are oil producers still make a lot of money even if we don't buy. Sanctions can bite but plenty of countries still need oil and often don't care where it comes from.

That's all great but it still doesn't make the price of oil pumped out of the ground here independent of international oil prices.

Quotation 1: Oil is a fungible product.
Quotation 2: Even though it's fungible and priced by world markets, American oil is independent of international oil prices.

I agree with quotation 1 and disagree with quotation 2. Our oil prodcution is heavily influenced by international oil prices.

 

[Hair Warrior]

New Mexico Officials Taken Aback By Biden Assault On Oil And Gas

A little more than 2 years ago, in September, 2018, I wrote about the half-billion dollar windfall the State of New Mexico had just received during the course of a single sale of oil and gas leases on federal lands in the state.

www.forbes.com

There was just no way to see it coming. Sad the governor’s free in-state tuition plan needs oil and gas. Oops.

What did they expect?

The sad part of gas/petro is that price increases (through supply reductions, tax hikes, etc) only hurt the lowest income brackets. But most Americans frankly aren’t smart enough to understand or are blissfully ignorant why a single banana costs $0.25 rather than, say, $1.25 at their local grocery store - hint: it’s not the cost of wages for banana growers. If/when we see gas cost more, then literally everything will cost more.

 

[johnboyA6E]

Biden came close to losing the election just by admitting in passing that he wants to end oil and gas production.

I would be directly impacted by that policy, but I firmly believe that isn't going to happen. The impact to the economy and to tens of millions of citizens who are directly/indirectly employed in that industry would far outweigh any benefit.

Sadly, that quote didn't age well......

People are shocked that the dems are doing exactly what they said they were going to do

 

[taxi1]

My neighbor works in the wind industry. The company he works for does wind turbine maintenance, which is an exploding market. All those wind turbine blades undergo super high stresses and wear out, along with the gearboxes, and they are coming up with new and more efficient designs constantly. Super challenging to erect and then repair these things, they are getting insanely large. It's interesting to watch an industry grow up from nothing.

 

[ABMD]

Sadly, that quote didn't age well......

People are shocked that the dems are doing exactly what they said they were going to do

I meant more an all-out ban on fracking and natural gas.