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How the US oil, gas boom could shake up global order

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

How the US oil, gas boom could shake up global order

Unread postby Ferretlover » Mon 01 Apr 2013, 13:14:16

Golly gee, I wonder where I heard this before??
How the US oil, gas boom could shake up global order
By Richard Engel and Robert Windrem, NBC News
Without fanfare, China passed the United States in December to become the world's leading importer of oil – the first time in nearly 40 years that the U.S. didn’t own that dubious distinction. That same month, North Dakota, Ohio and Pennsylvania together produced 1.5 million barrels of oil a day -- more than Iran exported.
As those data points demonstrate, a dramatic shift is occurring in how energy is being produced and consumed around the world – one that could lead to far-reaching changes in the geopolitical order.
U.S. policy makers, intelligence analysts and other experts are beginning to grapple with the ramifications of such a change, which could bring with it both great benefits for the U.S. and potentially dangerous consequences, including the risk of upheaval in countries and regions heavily dependent on oil exports. …
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Re: How the US oil, gas boom could shake up global order

Unread postby Quinny » Mon 01 Apr 2013, 14:02:02

How much did the US including North Dakota, Ohio and Pennsylvania export last year - and this year?
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Re: How the US oil, gas boom could shake up global order

Unread postby Plantagenet » Mon 01 Apr 2013, 14:18:28

Basing US government policies on the belief that the US will be energy independent by 2020 is a bit premature. I'm sure its comforting for the folks in DC to believe that peak oil is no longer anything to be concerned about because frakking will lead to much US domestic production, but that belief may be no more realistic then the belief four years ago that we'd all be shifting to electric cars by now.
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Re: How the US oil, gas boom could shake up global order

Unread postby diemos » Mon 01 Apr 2013, 16:23:23

Quinny wrote:How much did the US including North Dakota, Ohio and Pennsylvania export last year - and this year?


Crude oil? Zero and ... zero.

US consumption: 18 million barrels/day
US production: 7 million barrels/day
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Re: How the US oil, gas boom could shake up global order

Unread postby John_A » Mon 01 Apr 2013, 21:09:59

Plantagenet wrote:Basing US government policies on the belief that the US will be energy independent by 2020 is a bit premature. I'm sure its comforting for the folks in DC to believe that peak oil is no longer anything to be concerned about because frakking will lead to much US domestic production, but that belief may be no more realistic then the belief four years ago that we'd all be shifting to electric cars by now.


One happening unexpectedly stopped the other. What is nice about the EV delay however is that 2nd Gen stuff might be much better than the Gen I stuff.
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Re: How the US oil, gas boom could shake up global order

Unread postby John_A » Mon 01 Apr 2013, 21:13:00

Certainly this is one way Obama could make sure the economy is cratered in a way he would like.

"But havoc is on the horizon. President Obama is reportedly thinking of requiring all federal agencies to consider climate change before approving any major projects — not just taxpayer-funded — but anything requiring a federal license or permit. Since what affects climate change is pretty much in the eye of the beholder, an Obama executive order along these lines would have two immediate consequences. First, it would slow down every pipeline, every industrial plant, every port expansion, every refinery, every highway, every license, every permit, to the point of delaying them for years. Second, it would give the environmental activist groups standing to challenge every decision in court, bringing the entire process to a complete halt. When National Association of Manufacturers Vice President Ross Eisenberg tells Bloomberg News this prospect “has got us very freaked out,” he’s not exaggerating.

Read more: http://www.washingtontimes.com/news/201 ... z2PGQQj9Mk
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Re: How the US oil, gas boom could shake up global order

Unread postby Ibon » Mon 01 Apr 2013, 21:57:39

Ferretlover wrote:Golly gee, I wonder where I heard this before??
How the US oil, gas boom could shake up global order
By Richard Engel and Robert Windrem, NBC News


We are allowed one day of indulgence in illusion since you posted this on April fools day.
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Re: How the US oil, gas boom could shake up global order

Unread postby ROCKMAN » Mon 01 Apr 2013, 22:43:36

John – I don’t share your expectations. First, he hasn’t made such a requirement mandatory yet. And if and when he does it might mean delays or maybe not if they get something close to rubber stamp approval. Much has been made about the president’s refusal to issue a permit for the border crossing section of Keystone. Yet the other 98% of the pipeline expansion has never stopped for a single day as a result of his inaction. The president has not prevented the other 6 border crossing pipelines from continuing their activities. Nor has the govt prevented oil sands production from crossing the border via truck and rail transport. And the major hindrance to Canadian oil reaching the Gulf Coast refineries, the Cushing bottle neck, has been partially relieved with more expansion on the way. And none of that activity required a federal permit.

There is the verbiage fed to the public and then there are the facts. During President Obama’s watch more Canadian oil has been imported during 2012 than ever before in history. Since the Macondo blow out and one of the largest oil spills in history President Obama has approved over 400 offshore drilling permits in the Gulf of Mexico. And 14 major GOM oil production facilities have been green lighted by the feds. And in just the last 12 months about 1 million acres of offshore fed leases have been offered for bidding. And closer to my home two years ago President Obama’s EPA issued the final Clean Air permit to the coal-fired White Stallion plant in Matagorda County, Texas. Ironically the plant was to be built on top of a NG field I’ve been developing. And instead of using our abundant/cheap NG the plant signed a 30 year contract to rail Illinois coal half way across the county to Texas. But largely due to competition from cheap NG fired plants and our booming wind energy contribution in Texas the WS plant has been put on hold.

Does this long list seem to represent a man who isn’t fully behind the development of fossil fuels in this country? And all this happened before the president became a lame duck. The Republicans only embarrass themselves IMHO when they try their anti-oil spin against the POTUS. Outside of social issues and taxes hardly anyone in the oil patch has anything negative to say about Presdient Obama.
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Re: How the US oil, gas boom could shake up global order

Unread postby ROCKMAN » Mon 01 Apr 2013, 22:45:46

John – I don’t share your expectations. First, he hasn’t made such a requirement mandatory yet. And if and when he does it might mean delays or maybe not if they get something close to rubber stamp approval. Much has been made about the president’s refusal to issue a permit for the border crossing section of Keystone. Yet the other 98% of the pipeline expansion has never stopped for a single day as a result of his inaction. The president has not prevented the other 6 border crossing pipelines from continuing their activities. Nor has the govt prevented oil sands production from crossing the border via truck and rail transport. And the major hindrance to Canadian oil reaching the Gulf Coast refineries, the Cushing bottle neck, has been partially relieved with more expansion on the way. And none of that activity required a federal permit.

There is the verbiage fed to the public and then there are the facts. During President Obama’s watch more Canadian oil has been imported during 2012 than ever before in history. Since the Macondo blow out and one of the largest oil spills in history President Obama has approved over 400 offshore drilling permits in the Gulf of Mexico. And 14 major GOM oil production facilities have been green lighted by the feds. And in just the last 12 months about 1 million acres of offshore fed leases have been offered for bidding. And closer to my home two years ago President Obama’s EPA issued the final Clean Air permit to the coal-fired White Stallion plant in Matagorda County, Texas. Ironically the plant was to be built on top of a NG field I’ve been developing. And instead of using our abundant/cheap NG the plant signed a 30 year contract to rail Illinois coal half way across the county to Texas. But largely due to competition from cheap NG fired plants and our booming wind energy contribution in Texas the WS plant has been put on hold.

Does this long list seem to represent a man who isn’t fully behind the development of fossil fuels in this country? And all this happened before the president became a lame duck. The Republicans only embarrass themselves IMHO when they try their anti-oil spin against the POTUS. Outside of social issues and taxes hardly anyone in the oil patch has anything negative to say about Presdient Obama.
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Re: How the US oil, gas boom could shake up global order

Unread postby Ferretlover » Mon 01 Apr 2013, 22:48:34

Ibon wrote:We are allowed one day of indulgence in illusion since you posted this on April fools day.

LOL! If only the idea WAS foolish!
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Re: How the US oil, gas boom could shake up global order

Unread postby John_A » Mon 01 Apr 2013, 23:47:38

ROCKMAN wrote:John – I don’t share your expectations. First, he hasn’t made such a requirement mandatory yet.


Yet. Just like Obamacare wasn't a tax. Until it was.

Rockman wrote: Since the Macondo blow out and one of the largest oil spills in history President Obama has approved over 400 offshore drilling permits in the Gulf of Mexico. And 14 major GOM oil production facilities have been green lighted by the feds. And in just the last 12 months about 1 million acres of offshore fed leases have been offered for bidding. And closer to my home two years ago President Obama’s EPA issued the final Clean Air permit to the coal-fired White Stallion plant in Matagorda County, Texas. Ironically the plant was to be built on top of a NG field I’ve been developing. And instead of using our abundant/cheap NG the plant signed a 30 year contract to rail Illinois coal half way across the county to Texas. But largely due to competition from cheap NG fired plants and our booming wind energy contribution in Texas the WS plant has been put on hold.


So...how much of the increased oil production that the United States has done has come from any of those things you mention? Because while leasing (which isn't required to be drilled) and transporation (of oil coming from other than Federal property) is all well and good, it has been the companies operating on mostly non Federal land which has increased US oil production faster than at any time in its history.

Rockman wrote:Does this long list seem to represent a man who isn’t fully behind the development of fossil fuels in this country? And all this happened before the president became a lame duck. The Republicans only embarrass themselves IMHO when they try their anti-oil spin against the POTUS. Outside of social issues and taxes hardly anyone in the oil patch has anything negative to say about Presdient Obama.


Maybe because all the oil coming from new production in this country doesn't have much to do with him?
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Re: How the US oil, gas boom could shake up global order

Unread postby Loki » Tue 02 Apr 2013, 00:10:12

Rockman, thanks for your posts lately, they've been a breath of fresh air on what has been a rather stale site lately. And thanks specifically for the post upthread. Obama's friendliness to fossil fuels is something neither of the partisans want to mention, the right because it undermines their talking points, the left because his policies have disastrous environmental consequences. Your list is even worse than I thought, though.
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Re: How the US oil, gas boom could shake up global order

Unread postby ROCKMAN » Tue 02 Apr 2013, 08:08:28

As I said John the oil patch doesn’t care much for the govt’s fiscal and tax policies. But as far as its relationship with us we ain’t got no big complaints.

From: http://energycommerce.house.gov/sites/r ... report.pdf

“Historically crude oil production on federal lands was consistently under 20% of total U.S. production until the late 1990s (under a Democrat POTUS) when annual production surged on federal lands (primarily offshore) rising to over 30% in the early 2000s and reaching a high point of about 37% in FY2010.3 As a result of recent production increases on non-federal lands, a question is raised as to whether non-federal lands will regain a more dominant position of roughly 80%-85% of total U.S. crude oil production. The fact remains, however, that there are 5.3 billion barrels of proved oil reserves located on federal acreage onshore and another 5.6 billion barrels of proved reserves offshore (nearly all in the Gulf of Mexico).

Taken together, U.S. federal oil reserves equal about 43% of all U.S. crude oil reserves, which are estimated at 25.2 billion barrels, according to the Energy Information Administration (EIA). Proved oil reserves are amounts accessible under current policy, prices, and technology. Crude oil production on federal lands is likely to continue to make a significant contribution to the U.S energy supply picture and could remain consistently higher than previous decades, but still fall as a percent of total U.S. production, if production on non-federal lands continues to rise at a faster rate.”

IMHO the symbiotic relationship between the oil patch and the federal govt (regardless of who is president) is undeniable. The right and left propaganda notwithstanding. BTW: After income taxes oil and NG royalty income is the largest source of revenue for the govt.

Loki - Sorry to add to the list but I did leave out another small tidbit: President Obama issued the permit that allowed Shell Oil to embarrass themselves in the Arctic Ocean recently. I really don't take much comfort in exposing the two-faced positions of our "liberal" politicians. But when you know the facts it's difficult to listen to the deceitful propaganda from both sides used to keep the population divided on the energy issue. As result instead of conversations being focused on real solutions it deteriorates into an "us vs. those bastards" debates. And that allows the politicians to win and the people to lose IMHO.
Last edited by ROCKMAN on Tue 02 Apr 2013, 09:48:23, edited 1 time in total.
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Re: How the US oil, gas boom could shake up global order

Unread postby ROCKMAN » Tue 02 Apr 2013, 09:37:12

Speaking of shaking up global order you may recall a while back Israel and Egypt having a dispute regarding NG exports between the two countries. There’s been a recent shift in that situation:

“Saturday evening Noble Energy began first flow from gas wells of the 8 Tcf Tamar gas field in the Levant Basin, offshore Israel. Among the notable achievements of the $3.2 billion project are 1) world-class execution - first production in just a little over four years after discovery and two and a half years after sanctioning, 2) the world's longest subsea tieback of 93 miles, 3) the expansion of a world class natural gas basin and 4) a path to energy independence for Israel.

According to Israeli Prime Minister Benjamin Netantyahu, "We are taking an important step toward energy independence. In the past decade we have promoted Israel's gas sector and this will enhance Israel's economy and benefit all the country's citizens."

Tamar was the world's largest conventional natural gas field discovery in 2009.”
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Re: How the US oil, gas boom could shake up global order

Unread postby rockdoc123 » Tue 02 Apr 2013, 10:50:40

Crude oil? Zero and ... zero.

US consumption: 18 million barrels/day
US production: 7 million barrels/day


This is an inaccurate look at what is actually happening. The US is a net importer of crude oil but that does not mean it doesn't export any volumes. In 2012 the US exported 21 MMB of crude oil which was up from 17 MMB in 2011 and 15 MMB in 2010. Interesting enough last year the US became a net exporter of petroleum products the first time in quite awhile.
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Re: How the US oil, gas boom could shake up global order

Unread postby Econ101 » Tue 02 Apr 2013, 14:12:56

ROCKMAN wrote:....when you know the facts it's difficult to listen to the deceitful propaganda from both sides used to keep the population divided on the energy issue. As result instead of conversations being focused on real solutions it deteriorates into an "us vs. those bastards" debates. And that allows the politicians to win and the people to lose IMHO.


Forgive me if I seem out of line but does this graph look familar? Take a look at the last 4 years in particular and the huge dropoff in the late 1980s brought about by peak oil politics. We had some relief under George W Bush but it was right back to politics as usual when the current regime took power:

Image

Here is another look at the same thing:

Image

Because of those 2 charts this chart is no surprise:

Image

We should be producing on twice as many acres as that, eliminating our current energy problems, but there is no cooperation from the federal government unless the politics is too costly.
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Re: How the US oil, gas boom could shake up global order

Unread postby ROCKMAN » Tue 02 Apr 2013, 15:20:42

Econ – Not out of line at all. Your thoughts are as welcome as anyone else’s. Those are great charts and add much to the conversation. Mucho thanks. The first chart is the most enlightening. I can put some more impressive numbers out there for consideration: of the almost 1 million acres of offshore leases offered by the govt in the last 12 months less than 6% of them received even one bid. And the minimum bid required by the feds: less than $400/ac. Compare that to the $10,000+/ac prices paid for some of the Eagle Ford Shale leases…the fed leases are a bargain. The number of acres leased is low because the industry didn’t want to spend money on areas where they had no expectation of finding commercial oil/NG reserves. That’s pretty much the policy I’ve followed for the last 38 years. Fortunately we live in a country where companies aren’t forced by the govt to drill wells we don’t want to drill. The second chart also provides valuable insights. As oil prices rose 10 years or so ago companies could justify drilling prospects that had previously not appeared commercial. Once that inventory was used up the permit count declined because much of what was left to drill, even at those high oil prices, weren’t attractive to the industry. The govt issued as many drill permits as the oil patch wanted. We just didn’t want as many as before.

The same dynamic is working in the onshore shale plays. An initial rapidly increasing pace of leasing in the Eagle Ford and Bakken trends. Same with significant percentage increases in the number of drill permits issued for wells in those trends. But today there is relatively little leasing going on in either trend: nearly all the tracks companies thought were worth leasing have been leased. As the current lease inventory is drilled up the rig count will have to decrease since there are much fewer new leases left to be taken. A very basic rule in the oil patch: can’t drill what you haven’t leased and you don’t lease when you don’t have an economically viable prospect. The oil potential in the Bakken and Eagle Ford was known long ago as was the technology to produce them. But oil/NG prices at the time didn’t make them attractive targets so little leasing was done. Naturally when prices increased those assets became economically viable.

Chart 3 is easy to understand also. As lease are developed, produced and then abandoned they are no longer classified as leased but open. There are millions of acres of offshore leases that fall into this category. The shallow shelf waters of the GOM is a virtual wasteland of depleted fields sitting under open federal leases. And regardless of how high oil/NG prices may get many of those blocks won’t be leased again because there's nothing left to drill. About 20 years ago I worked for companies that specialized in picking over that carcass. There was very little meat left on the bones. Every fed lease that has been leased and ever will be leased will eventually be abandoned and returned to an open status. I am puzzled by you expectation of why we should be producing twice as many acres as currently. The only leases that will ever be produced are ones the oil patch drills and discovers production on. Given that only a tiny fraction of lease offered by the feds recently have been acquired by the oil patch I would expect the total number of fed leases producing will gradually decline as fields deplete and few new fields are discovered. Peak oil generates peak drilling as well as peak leasing.

There was nothing stopping any company from leasing any offshore fed lease they wanted, getting a drill permit and poking a hole to see what’s there. Well, one thing stopping them: the lack of viable prospects to drill. That’s sorta the natural progression of things. Between 2009 and 2011 I took a lot of private lease in S La. and spent my share of $400 million in drilling costs to test those NG prone leases. Since NG prices collapsed I haven’t spent $1 on leases in S. La. Nor have a lot of other companies. And these are privately owned lands which require no fed approval to lease or drill.

No disrespect intended but I suspect you’re confusing cause and effect. IMHO the oil patch is holding the feds back from developing its leases…not the other way around.
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Re: How the US oil, gas boom could shake up global order

Unread postby Econ101 » Sat 06 Apr 2013, 13:58:14

You dont say much about the value of the leases the fed has offered. The market speaks volumes however. Those leases you talk about have no economic value but offer political value.

No disrespect intended but a lease is not a lease. We have generations of oil and a half full pipeline from Alaska to show that. We have California as a shining example of peak politics causing peak oil. Take a look at production figures there and also development.

To underscore the point shale development is an unintended consequence of federal policy keeping orderly development at bay all you have to know is the big new oil is coming out of the 3 states having the least amount of federal land. Private ownership in North Dakota, Texas and Lousianna is over 90%. The rest of the states are being held back to one degree or another. The more federal lands the more restrictions. Many states have in excess of 80% federal lands, some > 90%

Drilling permits are another interesting story that speaks volumns in the same way. Look it up my friend.
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Re: How the US oil, gas boom could shake up global order

Unread postby ralfy » Sat 06 Apr 2013, 15:02:59

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Re: How the US oil, gas boom could shake up global order

Unread postby Econ101 » Sat 06 Apr 2013, 16:45:00

That author says only 1-2% of the oil in the Bakken shales is recoverable but that is totally wrong. The estimates are now running as high as 30% because the shale responds so beautifully to technology applications designed to improve flow and ultimate recovery. Assuming other errors of logic havent been made by the author, their recovery estimates should be multiplied by 15 or 20 to get to the accurate and reliable reserve number today.

They wont get it all but they havent anywhere near run out of ideas yet either.
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