Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

The U.S., energy producing superpower

General discussions of the systemic, societal and civilisational effects of depletion.

Re: The U.S., energy producing superpower

Unread postby Yoshua » Sat 17 Jun 2017, 16:17:28

Political fallout from the senate sanctions bill:

"The president of Russia said that Russia is ready to unite with Europe".

"The Trump administration is calling the house for more flexible sanctions on Russia".

The funny thing is that Europe consists of tribes with different ethnicities, languages, cultures and religious sects (like Syria). We are just united by mistrust and hatred towards each others. :)

No. I know that is not fun. Just imagine what happens when the delusion disappears and panic kicks in.
Yoshua
Intermediate Crude
Intermediate Crude
 
Posts: 988
Joined: Sat 28 May 2016, 05:45:42

Re: The U.S., energy producing superpower

Unread postby Yoshua » Sun 18 Jun 2017, 04:36:44

Shale oil and gas production is still uneconomic despite "advancement of technology". When the "sweet spots" are gone and they move out to produce from poorer shale the debt on their balance sheets explodes.

http://peakoilbarrel.com/wp-content/upl ... 70209e.gif
Yoshua
Intermediate Crude
Intermediate Crude
 
Posts: 988
Joined: Sat 28 May 2016, 05:45:42

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 08:31:34

Yoshua wrote:Shale oil and gas production is still uneconomic despite "advancement of technology". When the "sweet spots" are gone and they move out to produce from poorer shale the debt on their balance sheets explodes.

http://peakoilbarrel.com/wp-content/upl ... 70209e.gif


Business decisions and costs and running an E&P company isn't the same thing as the economic viability of shale oil and gas development. While someone with zero oil and gas business or project development experience (like say Art Berman or the remnants of the TOD website that was literally laughed off the internet you reference) are expected to be ignorant of such basics, there is no need to propagate faux claims. Unless of course your MEANT to distract from the same facts that got TOD laughed off the internet? That would be more likely, based on your posting habits, 6 year old articles claiming things that then didn't happen, bad references and not knowing the quality of your sources, reliance on commentary rather than the science involved, etc etc.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby Yoshua » Sun 18 Jun 2017, 09:32:58

Everything is fine then. In the old economy E&P companies made money. In this new brave economy they lose money and that is fine.
Yoshua
Intermediate Crude
Intermediate Crude
 
Posts: 988
Joined: Sat 28 May 2016, 05:45:42

Re: The U.S., energy producing superpower

Unread postby shortonoil » Sun 18 Jun 2017, 09:38:55

Shale oil and gas production is still uneconomic despite "advancement of technology".


We don't have to wait for the sweet spots to be worked out to be sure that the shale industry is nothing more than a financial fiasco on par with MBS, and now the sub prime auto loan ponzi schemes. An industry that needs $1 trillion in investment to produce $362 billion annually in gross sales is a loser from the get-go. That is $1 trillion that the investors will never see again. It's a shame that so much of it came from window s and orphans, and pension funds. It is always those least able to bear the loss that gets conned into these schemes. There is nothing new about thieves and liars, it is just that they are getting so much bigger, and better at it with the advent of advancing technology.
http://www.thehillsgroup.org/
User avatar
shortonoil
Fusion
Fusion
 
Posts: 5300
Joined: Thu 02 Dec 2004, 03:00:00
Location: VA USA

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 10:40:02

Yoshua wrote:Everything is fine then.


You can assemble that strawman to joust against if you'd like, but I never said everything was fine. Certainly everything isn't the crap storm that the peak oil movement has been claiming for more than a decade now, but no, everything is not fine. Read a newspaper or something, get some information from a place other than the circular references used in peakerville, none of this is HARD to understand, and you don't appear to have the level of self-delusion that pstarr suffers from, so there is hope for you yet.

Yoshua wrote: In the old economy E&P companies made money. In this new brave economy they lose money and that is fine.


Obviously you weren't around in 1986 when bankruptcies and doom were the order of the day. The oil and gas drilling industry lost more jobs in the 1980's then steel and automobile manufacturing combined. Between 1985 and 1989 more than 50% of the oil producers in the US were no more. How about you get some facts about what E&P companies have done in the "old" economy, prior to pretending you know anything about the "new" one, whatever you think that might be.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby asg70 » Sun 18 Jun 2017, 11:35:14

This is what I remember from 30 years ago.

http://abcnews.go.com/Nightline/video/d ... e-14868875

There are up-times and down-times economically. This is normal. Doomers seize upon any shred of negativity as being caused by peak-oil, though.
“If and when the oil price skewers for 6 months or more substantially above the MAP, then I will concede the Etp is inherently flawed"
--Onlooker, 1/1/2018
asg70
Light Sweet Crude
Light Sweet Crude
 
Posts: 1722
Joined: Sun 05 Feb 2017, 13:17:28

Re: The U.S., energy producing superpower

Unread postby Outcast_Searcher » Sun 18 Jun 2017, 13:53:08

Yoshua wrote:Shale oil and gas production is still uneconomic despite "advancement of technology". When the "sweet spots" are gone and they move out to produce from poorer shale the debt on their balance sheets explodes.

http://peakoilbarrel.com/wp-content/upl ... 70209e.gif

Or when the sweet spots are gone, poorer spots won't be exploited commonly unless and until the price of crude rises high enough to justify the risk and expense of doing the production.

That's how business and markets work over time, for those who follow data and understand that the economy functions on basics like supply and demand.

And if some or many of them go bankrupt in the mean time, so what? That's what happens in volatile industries. It's not like the existing resources are going anywhere. And it's not like the technology (which continues to improve) used to exploit those resources is going away. And it's not like green energy sources won't continue to improve, which over time will help mitigate the global demand for oil.

But let's pretend none of that will happen, if reality gets in the way of the constant mantra of doom.
User avatar
Outcast_Searcher
COB
COB
 
Posts: 4900
Joined: Sat 27 Jun 2009, 20:26:42

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 14:19:56

Outcast_Searcher wrote:
Yoshua wrote:Shale oil and gas production is still uneconomic despite "advancement of technology". When the "sweet spots" are gone and they move out to produce from poorer shale the debt on their balance sheets explodes.

http://peakoilbarrel.com/wp-content/upl ... 70209e.gif

Or when the sweet spots are gone, poorer spots won't be exploited commonly unless and until the price of crude rises high enough to justify the risk and expense of doing the production.


Sweet spot development in the Bakken began around 1956...and then petered out.

Of course, the crappier spots then got developed and led to one of the 2 largest producing fields in the Western Hemisphere. So sure, while the crappy, current Bakken development did require a higher price point to get started, you have just enunciated exactly why peak oil in the US was wrong....and for some reason, people never said that BEFORE it became obvious? Well, economists say it of course, but peak oilers can't stand them, because they know better than to use simplistic bell shaped curves that don't mimic oil production...to mimic oil production. Funny how the economists always knew that one, but Colin Campbell and Co. couldn't figure it out.

Outcast_Searcher wrote:That's how business and markets work over time, for those who follow data and understand that the economy functions on basics like supply and demand.


Yup. And why do you think, knowing this, that economists and their ideas that proved correct, were so discounted by the bell shaped curve zealots?

Outcast_Searcher wrote:And if some or many of them go bankrupt in the mean time, so what? That's what happens in volatile industries. It's not like the existing resources are going anywhere. And it's not like the technology (which continues to improve) used to exploit those resources is going away. And it's not like green energy sources won't continue to improve, which over time will help mitigate the global demand for oil.

But let's pretend none of that will happen, if reality gets in the way of the constant mantra of doom.


You can pretend what you'd like, the peakers did and look where it got them? Laughingstock being an understatement. But more interestingly, those of us who do the sciences and engineering and economics involved in these complex issues, tend to get called names by the zealots...? I wonder why? Jealousy at a display of critical and objective thinking perhaps? I've been touring the archives as of late, and am amazed at how poorly people that, as it turns out, speculated correctly on what was going to happen, were treated quite poorly. Jealousy being just one possible explanation, when zealotry bumps into analytics and science based thinking, or maybe just a raging instinct requiring herdthink in all things? That borders on peak oil being a religion, or at least cult-like, and itself is a topic of conversation on why peak oil worked out as it did, and those who are believers just can't let go.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby SRSroccoReport » Sun 18 Jun 2017, 15:33:16

U.S. Shale Energy Industry Is Choking On Debt & Interest Expense

Yeah... the Great U.S. Energy Superpower is choking on debt while it pays 75% of its operating cash just to service its INTEREST EXPENSE:

Image

A perfect example of CHOKING ON DEBT is none other than Continental Resources... the poster child of the Bakken. Continental Resources was only paying $13 million a year for its interest expense in 2007, however that has ballooned to $321 million last year. Remember, this is not PAYING DOWN DEBT... this is just servicing its debt.

Image

Yes.... the U.S. Superpower is being propped up by a massive amount of debt.

SRSroccoReport.com

https://srsroccoreport.com/warning-the- ... tay-alive/
SRSroccoReport
Coal
Coal
 
Posts: 47
Joined: Wed 01 Mar 2017, 16:36:05

Re: The U.S., energy producing superpower

Unread postby onlooker » Sun 18 Jun 2017, 15:45:34

@SRSroccoReport
This is in line with the Etp analysis and current observations from the Hills Group
"We are mortal beings doomed to die
User avatar
onlooker
Anti-Matter
Anti-Matter
 
Posts: 8899
Joined: Sun 10 Nov 2013, 12:49:04
Location: NY, USA

Re: The U.S., energy producing superpower

Unread postby Yoshua » Sun 18 Jun 2017, 17:03:36

I guess we all can agree on that things could be better and that the oil industry has a problem right now. We can't agree on what the problem is. For some the problem is cyclic. For some the production cost is too high. For some the problem is that the oil price is too low. For some the supply and demand is imbalanced. For some the problem is depletion of conventional oil. For some it's a net energy problem.

It is pointless for me to try to tell people in the industry what the problem is... since I have zero experience from the oil industry and since I have no solution to the problem.

I believe that it's a net energy problem.
Yoshua
Intermediate Crude
Intermediate Crude
 
Posts: 988
Joined: Sat 28 May 2016, 05:45:42

Re: The U.S., energy producing superpower

Unread postby rockdoc123 » Sun 18 Jun 2017, 19:22:26

A perfect example of CHOKING ON DEBT is none other than Continental Resources... the poster child of the Bakken. Continental Resources was only paying $13 million a year for its interest expense in 2007, however that has ballooned to $321 million last year. Remember, this is not PAYING DOWN DEBT... this is just servicing its debt.


OK. This doesn’t make sense according to Continental’s financial statements. I think the problem is that whoever is doing this analysis doesn’t understand depreciation and how it works. In 2016 Continental saw cashflow from sales of 2.05 billion but depreciation on assets was 1.7 billion so on the books their gross income shows up as being negative once you add in cost of goods sold. The problem with that is it confuses actual money with book value, not the same in the real world. In actual fact the cash on hand would be cash flow from sales minus cost of goods which ends up being about 1.5 billion by my quick estimation. And that falls in line with their EBITDA of 1.43 billion. So when you look at their interest expense of 320 million that ends up being 22% of EBITDA, not 75%. And Continental's interest expense has actually been growing at a much reduced rate year on year over the past 5 years.
User avatar
rockdoc123
Expert
Expert
 
Posts: 5837
Joined: Mon 16 May 2005, 02:00:00

Re: The U.S., energy producing superpower

Unread postby SRSroccoReport » Sun 18 Jun 2017, 19:55:11

rockdoc123,

Image

Maybe you should tell that to the analysts at the EIA. They are the ones that created the first chart that shows the 75% interest expense ratio. But, maybe they are just flunkies who don't know anything about financial balance sheets of energy companies.

SRSroccoReport

https://srsroccoreport.com/
Last edited by SRSroccoReport on Sun 18 Jun 2017, 19:57:20, edited 1 time in total.
SRSroccoReport
Coal
Coal
 
Posts: 47
Joined: Wed 01 Mar 2017, 16:36:05

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 19:57:10

SRSroccoReport wrote:U.S. Shale Energy Industry Is Choking On Debt & Interest Expense

Yeah... the Great U.S. Energy Superpower is choking on debt while it pays 75% of its operating cash just to service its INTEREST EXPENSE:


Well, I recommend you not invest then. But one thing you can be sure of, as the bankruptcy is declared by whomever, during the bankruptcy, and immediately following it when the new owners move in, the oil and gas will continue to be produced.

Just like it was in 1986.

What part of industry cycles and history did you choose to ignore, prior to pretending you discovered something NEW?

How many companies have you ridden with, into bankruptcy, or more illustrative, purchased from the courts and make economic again? I've done 5 purchases out of bankruptcy, having worked for one of those "keep your powder dry and buy when their is blood in the streets" kind of companies, the same kind that will survive the current "not even a bad downturn yet". You would know this already if you wanted to, therefore you don't want to, most likely because it interferes with a good gold bug story.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 19:59:49

onlooker wrote:@SRSroccoReport
This is in line with the Etp analysis and current observations from the Hills Group


They are gold bugs as well? Because of...thermodynamics? Makes perfect sense...for a zealot....find ANYTHING to agree with that shows doom tomorrow..and just go with it! Sounds like Etp analysis and current observations are right in line with Harold Camping's predictions as well.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 20:07:38

Yoshua wrote:I guess we all can agree on that things could be better and that the oil industry has a problem right now.


Depends. Things can always be better, and some folks in the oil industry, the kind that have done this before and are doing it now, are like kids in a candy store, making their bones for the next upswing. I recall the last downturn as kids in candyland, for those who were prepared for it. The company I was doing acquisitions for quadrupled in size in terms of well count, and that excludes non-operated wells. The boomer folks? They are screwed, and should be, for thinking that the basic rules of commodity sales had been revoked during the last upturn. This exact problem is why you keep old gray hairs around, to make sure you don't get caught when the floor falls out from underneath you.

Yoshua wrote:It is pointless for me to try to tell people in the industry what the problem is... since I have zero experience from the oil industry and since I have no solution to the problem.

I believe that it's a net energy problem.


Now that sounds like a completely reasonable statement. I disagree with the net energy angle, but I understand it, and can also understand why some people are sympathetic with it. I've even seen it ventured at quite a high level within the geologic community. Unfortunately, those who were venturing the idea also were clueless about the project economics of oil field development, and therefore couldn't put their ideas within the context of the mechanisms that the industry has been following for at least the better part of a century now.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby SRSroccoReport » Sun 18 Jun 2017, 20:10:52

AdamB,

Ah... I see. Making lots of comments all at one time. I know children who behave in the same fashion.

However, if you FOCUS on the EIA Chart, you will notice that the ENTIRE INDUSTRY is suffering from a 75% Interest Expense, just not one or two companies.

While I appreciate you pointing out the obvious that a bankrupt company can be bought out by another... what happens when the ENTIRE INDUSTRY is in trouble??

I gather you would want the Fed & Central Banks to bail out the Shale Oil & Gas Industry. And why not. They purchased $1.5 trillion in assets in the first five months of 2017.

SRSroccoReport

https://srsroccoreport.com/
Last edited by SRSroccoReport on Sun 18 Jun 2017, 20:11:54, edited 1 time in total.
SRSroccoReport
Coal
Coal
 
Posts: 47
Joined: Wed 01 Mar 2017, 16:36:05

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 20:11:14

SRSroccoReport wrote:rockdoc123,

Image

Maybe you should tell that to the analysts at the EIA. But, maybe they are just flunkies who don't know anything about financial balance sheets of energy companies.

SRSroccoReport

https://srsroccoreport.com/


Your chart does not indicate if Rocdoc's completely valid comments were taken into consideration in the creation of that sheet or not. Why don't you call them and find out?
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

Re: The U.S., energy producing superpower

Unread postby AdamB » Sun 18 Jun 2017, 20:24:51

SRSroccoReport wrote:AdamB,

Ah... I see. Making lots of comments all at one time. I know children who behave in the same fashion.


And I know gold bugs who never graduated the 4th grade who spin their tale better than you do.

SRSroccoReport wrote:However, if you FOCUS on the EIA Chart, you will notice that the ENTIRE INDUSTRY is suffering from a 75% Interest Expense, just not one or two companies.


You focus on the chart. Rocdoc makes a completely valid comment about depreciation, answer that about the chart, and then we can consider its value. The one FACT I am certain of is that CFO's are paid to make those financial statements sing nearly any tune desired, and do just that. But the EIA folks are quite good at what they do (they don't use thermodynamic models and don't factor gold into their projections), so call them up and ask how they built that chart, and if they have taken RocDoc's info into account.

SRSroccooReport wrote:While I appreciate you pointing out the obvious that a bankrupt company can be bought out by another... what happens when the ENTIRE INDUSTRY is in trouble??


Sounds like 1986. Did you happen to notice the entire industry being in trouble then, or did you, as most consumers did, appreciate the abundance and low prices that their success made available? I'm betting you didn't care any more than any other consumer. For those of us who were in that industry, and in trouble, during that time, we did the best we could. And survived. And part of that survival was acquisitions being sold by the bankruptcy court.

SRSRoccoreport wrote:I gather you would want the Fed & Central Banks to bail out the Shale Oil & Gas Industry. And why not. They purchased $1.5 trillion in assets in the first five months of 2017.

SRSroccoReport

https://srsroccoreport.com/


Nobody bailed out the industry during the 1986 collapse except one all important, all powerful, near God like force.....global consumers of hydrocarbon energy. You can keep your ridiculous faith in people playing games with money, or gold, other other financial shenanigans, all that industry needs are folks like pstarr, and you, and every other peaker and environmentalist in the world doing EXACTLY the same things they have been doing.

Bitch, complain, whine, lambaste the industry, make fun of it, pretend to swear off your support of it, it is amazing that the very people doing this will make their trip to the nearest liquid fuel acquisition point and collect their rations, fly in the planes and buy the products made from petrochemicals.

Don't need no stinkin' fed. Just give me the natural production decline of every field and well on the planet, and the hydrocarbon consumer, and rocco...the future looks so bright, industry has to wear shades.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4291
Joined: Mon 28 Dec 2015, 16:10:26

PreviousNext

Return to Peak Oil Discussion

Who is online

Users browsing this forum: No registered users and 11 guests

cron