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THE Price of Crude pt 14

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

Re: THE Price of Crude pt 14

Unread postby Darian S » Fri 30 Nov 2018, 17:56:03

KaiserJeep wrote:The cheap oil has eroded the price of gasoline further to $2.53/g this past week. In the SF Bay Area we are still considerably above that at $3.23/g on average. I do not doubt that something will be done to juice the petroleum profits at the expense of the rest of us.

But DAMN, I expected the Oil Peak to have some more dramatic symptoms than what I am seeing.


The issues will begin if U.S. shale can't sustain not only current output but significant growth for decades to come, not years but decades, and if no other significant production comes online to not only replace falling production that will be in most fields soon if it isn't now, but substitute all declines and produce excess above it.

Debt is piling on high to attempt to postpone things, but many expect global economic hardship within the near future.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Sat 01 Dec 2018, 17:57:46

Rockman, I'm guessing none of these are in dispute:
1. Coal is bad for the environment
2. Lower production & consumption of coal is better for the environment
3. Under Obama coal production & consumption fell sharply
4. Under Obama harmful emissions from power plants fell sharply

Seems like you are now saying the fall of US coal production/consumption and reduction in harmful emissions had nothing to do with Obama's actions? That seems highly unlikely IMHO. Mercury emissions alone fell 86% thanks to Obama's MATS regulation:

Industry aggressively fought the Mercury and Air Toxics Standards (MATS) when the Obama administration proposed it in 2011 and finalized it in February 2012, warning it would precipitate the closure of a swathe of coal capacity nationwide. Six years later, the rule appears to have had a sizable impact on the power sector.

The rule imposes first-of-their-kind emissions limits for mercury, arsenic, and heavy metals associated with fuel combustion on power plants larger than 25 MW, and the Environmental Protection Agency (EPA) says it affects about 600 power plants, which include 1,100 existing coal-fired units and 300 oil-fired units. The EPA received close to a million public comments on the MATS proposal alone—substantially more than any prior rule-making—and most comments from industry decried its potentially exorbitant costs associated with compliance and its potential threat to energy reliability.

An Environmental Success
When the EPA published its final MATS rule in February 2012, it released a companion regulatory impact analysis that projected annual incremental private costs of the final MATS to the power sector would be $9.6 billion in 2015 (in 2007 dollars). But it also estimated that the annual benefits of the rule, including the avoidance of up to 11,000 premature deaths annually, would be between $37 billion and $90 billion.

The environmental benefits of the rule are tangible, it said. In a January 2018 report summarizing analysis of its 2016 Toxics Release Inventory, the EPA noted that since 2006, net electricity generation from coal decreased 38%, while the rate of release of mercury to air per GWh of electricity from coal dropped 77%. Electric utilities overall reduced their mercury air emissions 85% (80,000 pounds) between 2006 and 2016. Total mercury emissions, including air releases and land disposal from the sector fell 48% (68,000 pounds) since 2006.
Image
How Did MATS Affect U.S. Coal Generation?

Then there were the rules regulating carbon dioxide emissions, the clean power plan, the new coal mining regulations, etc.

President Obama has been called one of the most anti-energy presidents in U.S. history. As if to put an exclamation point on this perception, last week the Obama Administration intervened to block an easement for the nearly completed $3.8 billion Dakota Access Pipeline (DAPL). This intervention was despite the fact that the U.S. Army Corp of Engineers had previously approved the easement across the Missouri River, and despite the fact that multiple pipelines already cross the river. The Obama Administration has also banned offshore drilling in the Arctic, and placed additional rules and regulations on the fossil fuel industries -- particularly on the coal industry. Thus, it’s clear that there is some substance to the narrative that President Obama is hostile to fossil fuel development. So let’s take a look at what has happened with respect to energy production while President Obama has been in office.

Recent history in the coal industry definitely supports the anti-fossil fuel narrative of President Obama. In 2008, President Bush’s last year in office, the U.S. produced 1.06 billion metric tons of coal -- an all-time high. By 2015 it had fallen to 813 million metric tons. Final data for 2016 won’t be available for several months, but during the first six months of this year the EIA reported that domestic coal production had fallen to an annualized rate of 667 million metric tons. That marks a decline of 37% in coal production during Obama’s presidency.

The bigger story, however, was the explosion of wind and solar power during the Obama Administration. Again, both started to grow during the Bush Administration, but the forced tilt away from coal provided a tremendous boost to wind and solar power. During the last year of the Bush Administration, wind and solar power respectively supplied 56 Terawatt-hours (TWh) and 1.6 TWh. By 2015 those consumption numbers for wind and solar power had grown to 193 TWh and 39 TWh. That translates to a 245% gain in wind power and a whopping 2300% gain in solar power production over the first seven years of the Obama Administration. And these numbers are likely to grow again in 2016.


I'm not saying Obama was the greenest president in history. Nor am I saying the demise of coal was 100% because of his actions, cheap gas was a large factor as well. But IMHO Obama's actions on coal have contributed to both coal's overall decline in production & use in the US and overall cleaner emissions for the coal that remains.
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Re: THE Price of Crude pt 14

Unread postby onlooker » Sun 02 Dec 2018, 14:05:58

So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?
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Re: THE Price of Crude pt 14

Unread postby asg70 » Sun 02 Dec 2018, 14:23:31

onlooker wrote:So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?


The solution to low oil prices is low oil prices. The solution to high oil prices is high oil prices. In other words, the invisible hand of the market has a way of keeping things wobbling within a sweet-spot. It's only doomers who always think trendlines keep moving in only one direction.
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Re: THE Price of Crude pt 14

Unread postby Cog » Sun 02 Dec 2018, 18:31:45

China and the US has reached a tentative agreement to forego additional tariffs for a 90 day period while the two sides negotiate. To me that is a growth indicator and oil prices respond to perceived growth with higher prices. Also OPEC is going to discuss production cuts this week. If they do that we are back up to $70/bbl oil right quick. At least that is my 2 cents on the matter.
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Re: THE Price of Crude pt 14

Unread postby Darian S » Sun 02 Dec 2018, 20:09:12

asg70 wrote:
onlooker wrote:So what do posters think, will the oil price keep going down in the next few months or will it once again head up soon?


The solution to low oil prices is low oil prices. The solution to high oil prices is high oil prices. In other words, the invisible hand of the market has a way of keeping things wobbling within a sweet-spot. It's only doomers who always think trendlines keep moving in only one direction.


If the price is too high for consumers demand will fall and the economy will be affected, if the price is too low for producers it cannot be sustainable either. And as time goes by the minimum price needed by the producers goes up, while stagnant wages and inflation mean the maximum price affordable by the consumers goes down. Price can fluctuate for a bit, but the long term it eventually becomes untenable without alternatives popping up.

IEA expects peak in a few years followed by annual drops of 6mbpd, year after year iirc, to substitute that and produce excess above necessitates prices consumers can't afford.
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Re: THE Price of Crude pt 14

Unread postby onlooker » Mon 03 Dec 2018, 00:28:16

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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Mon 03 Dec 2018, 03:04:10

Darian S wrote:If the price is too high for consumers demand will fall and the economy will be affected, if the price is too low for producers it cannot be sustainable either.

And as time goes by the minimum price needed by the producers goes up, while stagnant wages and inflation mean the maximum price affordable by the consumers goes down.

But wages and inflation are not stagnant.


Price can fluctuate for a bit, but the long term it eventually becomes untenable without alternatives popping up.

As they surely will.
IEA expects peak in a few years followed by annual drops of 6mbpd, year after year iirc, to substitute that and produce excess above necessitates prices consumers can't afford.
Yes the post peak world will be a harsh place with some winners and a lot of losers. If you can't afford oil you will find a way to do without it or die. It is as simple as that.
But for now still pre peak but near the top of the production curve I think Cog's $70/bl estimate is probably correct. The producers will grumble it is too low but keep producing and the customers will grumble it is too high but keep filling up their SUVs. If everyone is a little unhappy you have found the right price.
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Re: THE Price of Crude pt 14

Unread postby Cog » Mon 03 Dec 2018, 04:43:14

Crude oil price jumped 4% overnight pricipally on the US/China agreement.

Dow futures implied opening up 500 points.
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Re: THE Price of Crude pt 14

Unread postby Outcast_Searcher » Mon 03 Dec 2018, 05:43:40

Cog wrote:Crude oil price jumped 4% overnight pricipally on the US/China agreement.

Dow futures implied opening up 500 points.

To the extent that crude prices move on implied rates of economic growth, that makes lots of sense.

The terrible stock market "collapse" the doomers were recently calling for (yet again) isn't looking too realistic. Even without adding the implied 50ish S&P points from the pre-markets, whether you look at a year, six months, etc. the market is looking pretty flat, overall.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Price of Crude pt 14

Unread postby Cog » Mon 03 Dec 2018, 06:47:05

2017 was a very good market. I'll take flat compared to a huge dowturn.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Mon 03 Dec 2018, 08:27:40

WTI up $2.00 this morning on the news of the US-China trade crease fire.
Dow futures up 430 and fluctuating prior to the open and curiously gold up $9.50 per ounce.
I would think gold would move opposite to the market but perhaps it is moving on other news such as the riots in France.
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Re: THE Price of Crude pt 14

Unread postby GHung » Mon 03 Dec 2018, 08:55:05

Qatar announcing it's pulling out of OPEC is likely making things move as well. NatGas is down, gold up a bit and silver as well.
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Re: THE Price of Crude pt 14

Unread postby Tanada » Mon 03 Dec 2018, 10:59:05

GHung wrote:Qatar announcing it's pulling out of OPEC is likely making things move as well. NatGas is down, gold up a bit and silver as well.


Qatar is mostly a natural gas liquids exporter, their petroleum exports have been falling for half a decade no matter what the price has done. For them leaving OPEC makes sound financial sense, why keep paying fees to an organization that tries to influence the price of a minor export item when they need to focus on their major export items?
Qatar has announced it will quit OPEC in January in order to focus on cementing its position as the world’s top liquified natural gas (LNG) exporter.

The Middle Eastern state has been a member of OPEC for 57 years, but is one of the organisation’s smallest oil producers with an output of 600,000 barrels per day (bpd), compared to the 11 million bpd produced by OPEC’s de facto leader Saudi Arabia.

Qatar has found itself locked in a diplomatic dispute with Saudi Arabia during recent years, however Doha denied that its decision to leave OPEC was driven by politics.

Minister of State for Energy Affairs Saad al-Kaabi told a news conference that the decision had been communicated to OPEC and that Qatar would still be attending a group meeting later this week.

“For me to put efforts and resources and time in an organisation that we are a very small player in and I don’t have a say in what happens…practically it does not work, so for us it’s better to focus on our big growth potential,” he said.

Qatar is a major player in the global LNG market with an annual production of 77 million tonnes per year, with plans to increase output to 110 million tonnes by 2024.


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Re: THE Price of Crude pt 14

Unread postby Plantagenet » Mon 03 Dec 2018, 19:11:28

Russia's Putin and Saudi's Crown Prince Muhammad were giving each high fives and generally being chums at the G20 meeting.

Image
Hahahaahah! I murder reporters and you murder reporters so lets make a deal!

Now it looks like Saudi and Russia are going to team up against the west and cut oil production to drive up the price of oil.

crude-prices-surge-after-russia-saudi-arabia-agree-to-production-cuts-

Look for oil prices to go up from here.

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Re: THE Price of Crude pt 14

Unread postby Cog » Mon 03 Dec 2018, 19:21:03

A stable oil price is going to be better for US producers. Somewhere around $70-80 would suit me and my oil stocks. ;)
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Re: THE Price of Crude pt 14

Unread postby Darian S » Mon 03 Dec 2018, 21:36:19

Outcast_Searcher wrote:
Cog wrote:Crude oil price jumped 4% overnight pricipally on the US/China agreement.

Dow futures implied opening up 500 points.

To the extent that crude prices move on implied rates of economic growth, that makes lots of sense.

The terrible stock market "collapse" the doomers were recently calling for (yet again) isn't looking too realistic. Even without adding the implied 50ish S&P points from the pre-markets, whether you look at a year, six months, etc. the market is looking pretty flat, overall.

75% of the ultra-rich forecast a US recession in the next two years, survey finds-cnbc

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Re: THE Price of Crude pt 14

Unread postby Cog » Tue 04 Dec 2018, 04:51:18

Except for the fact there are zero real world indicators that a recession is likely.

I heard the same recession prediction in 2017 for the year 2018.
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Re: THE Price of Crude pt 14

Unread postby onlooker » Tue 04 Dec 2018, 09:55:29

Cog wrote:Except for the fact there are zero real world indicators that a recession is likely.

I heard the same recession prediction in 2017 for the year 2018.

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Re: THE Price of Crude pt 14

Unread postby Cog » Tue 04 Dec 2018, 10:28:05

Have you looked back through Charles Hugh Smith predictions over the last ten years? His website has them. He is consistently wrong. Why any normal human would give him a bit of credence is beyond me.

@onlooker

Seriously dude. You need to unleash yourself from doomer blogs. I know. I used to be a doomer and followed the same blogs. Look at real economic data and liberate yourself from the doomer chains that have imprisoned you.
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