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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 Outcast_Searcher » Wed 26 Sep 2018, 19:03:11

Armageddon wrote:Energy independence by the US? LOL, thats funny. 20MBPD? Good luck with that

I didn't say it would be fast or easy. But it sure as hell seems a lot smarter than burning all we can possibly afford with abandon, and doing almost nothing (as far as official strategic policy) about preparing for when it's much more expensive. Oh, and meanwhile spending $trillions on various military equipment and misadventures "protecting our interests" in oil.

In my world, where I exited college in '81 having recently witnessed the third large spike in prices in a single decade, it seemed to me that this was getting to be enough of a "thing" and a threat, that we ought to start doing something about it.

The obvious solution was to start gradually taxing it, and encouraging the natural economic reaction to conserve and seek alternatives which would ensue. Given that we had time back then nothing radical or fast was needed -- just persistent and determined.

A quarter or so for a gallon of gasoline or diesel to wake people up, and then adding a dime a year EVERY YEAR for a couple/few decades, IMO, would have produced a very different set of decisions as far as behavior for both US citizens and government.

But that kind of thing doesn't happen in the US because someone might not be re-elected in the short term, and the masses are largely incapable of mid-term thinking, much less strategic thinking. So there's that.

That was until global warming became so obvious. Since then I just want a $20 or so tax per gallon on gasoline on fossil fuel equivalents (to try and pay for all the social costs, more or less) -- but this tends to just get almost everyone upset.

So we'll just continue on as is, apparently. And then when bad things happen, as they surely will, it will, of course, be everyone ELSE's fault.

https://www.macrotrends.net/1369/crude- ... tory-chart
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 Tanada » Wed 26 Sep 2018, 20:01:31

Outcast_Searcher wrote:
Armageddon wrote:Energy independence by the US? LOL, thats funny. 20MBPD? Good luck with that

I didn't say it would be fast or easy. But it sure as hell seems a lot smarter than burning all we can possibly afford with abandon, and doing almost nothing (as far as official strategic policy) about preparing for when it's much more expensive. Oh, and meanwhile spending $trillions on various military equipment and misadventures "protecting our interests" in oil.

In my world, where I exited college in '81 having recently witnessed the third large spike in prices in a single decade, it seemed to me that this was getting to be enough of a "thing" and a threat, that we ought to start doing something about it.

The obvious solution was to start gradually taxing it, and encouraging the natural economic reaction to conserve and seek alternatives which would ensue. Given that we had time back then nothing radical or fast was needed -- just persistent and determined.

A quarter or so for a gallon of gasoline or diesel to wake people up, and then adding a dime a year EVERY YEAR for a couple/few decades, IMO, would have produced a very different set of decisions as far as behavior for both US citizens and government.

But that kind of thing doesn't happen in the US because someone might not be re-elected in the short term, and the masses are largely incapable of mid-term thinking, much less strategic thinking. So there's that.

That was until global warming became so obvious. Since then I just want a $20 or so tax per gallon on gasoline on fossil fuel equivalents (to try and pay for all the social costs, more or less) -- but this tends to just get almost everyone upset.

So we'll just continue on as is, apparently. And then when bad things happen, as they surely will, it will, of course, be everyone ELSE's fault.

https://www.macrotrends.net/1369/crude- ... tory-chart



Your plan closely resembles the Penny Plan I used to advocate for before I gave up trying to get laws changed. The first Monday of each month fuel tax would be increased 1 penny aka $0.12/year until such time that the USA fuel taxes were economically indistinguishable from the Western European average fuel tax rates. Such a sustained and gradual tax increase would encourage innovation and adaptation without slamming people with a massive overnight tax increase. It would pay for a complete infrastructure replacement and upgrade of alternative transport modes to offset the increased difficulty of using semi-trucks to deliver things across country that would be much more fuel efficient to ship by rail or barge. If not for the madness of the interstate highway system created in the 1950's we would still be using the alternatives much more heavily. Does anyone else remember the vast shift back to rail cargo transport we experienced from 2011-2014 when road diesel was well over $4.00/gallon? At those prices a rail unit costs about 1/3rd the cost of using a semi and a barge transit costs about 1/6th the cost of semi transport. We taxpayers invested billions in upgrading water transport routes with dams and locks to get barges from New Orleans to Pittsburgh up the Ohio, South Dakota up the Missouri, or Minnesota/Chicago up the Mississippi. After the Interstate Highway system and cheap diesel replaced common sense with single unit shipments via semi truck traffic on both rail and barge collapsed and a lot of cargo rail went bankrupt in the 60's, 70's and 80's.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Wed 26 Sep 2018, 20:36:39

ROCKMAN wrote:A - Not that I think we'll actually get there but we're not nearly as far off as you imply. First, we've hit 10.7 mm bopd domestic production. Amazes even me. But more important: US consumers are not buying 20 mm bopd...they don't buy oil, they buy refinery products. And US refineries are not selling to US consumers refinery products made from 20 mm bopd...it's closer to 15 mm bopd. The products made from almost 5 mm bopd are being sold to foreign consumers. US consumers don't need that 5 mm bopd. In fact, exporting those products only puts upward pressure on prices our consumers pay.

So the US consumers is ctually only importing about 4.3 mm bopd our consumers require. That's still a very big gap to fill. Probably too big IMHO. But not nearly as big as that "20 mm bopd" number you threw out. Also might be good to use "oil independence" instead on "energy independence" as you do. Two very different metrics.
Agreed. And net imports are falling fast:

U.S. NET OIL IMPORTS are projected to drop by nearly 60 percent next year compared to 2017, falling to their lowest levels since 1958. Net imports are expected to fall from an average of 3.7 million barrels per day last year[2017] to 2.4 million bpd this year[2018] and 1.6 million bpd next year[2019] – "a pretty staggering number."

The reduction in net imports of foreign oil – a measure of the amount of oil imported versus the amount of oil exported – is being driven by record-setting production that is poised to see U.S. producers extract more oil per day next year than the last record set in 1970.
EIA: U.S. Net Oil Imports to Drop to Lowest Levels in 60 Years

Not to mention the US is a net exporter of coal and natural gas. I expect the US will be net energy breakeven or better on imports/exports by 2020.

The United States exported 97.0 million short tons (MMst) of coal in 2017, a 61% (36.7 MMst) increase from the 2016 level.
U.S. coal exports increased by 61% in 2017 as exports to Asia more than doubled

97 million short tons of coal = 1.3 million BPDoe.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Fri 28 Sep 2018, 13:56:06

k - What folks who brag about coal consumption a few years don't want to acknowledge is that booming coal prices played a major roll in that decrease. Especially for third world countries. Then prices fell a simple supply/demand dynamics would predict. Why US coal exports boomed. Even hitting a record during the term of the "greenest" POTUS of all time...President Obama. With much of those exports coming from federal lands.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Fri 28 Sep 2018, 16:03:10

What are you talking about Rockman? My post didn't mention anything about Obama being the greenest president of all time or coal consumption levels. I was talking about the US becoming energy break even in 2020, which would be on Trump's watch, not Obama's. And I was talking about the US being a net coal exporter. Which has been true for decades, long before Obama.
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Fri 05 Oct 2018, 19:03:17

This on Bloomberg today. What happens if oil hits $100/b?
https://www.bloomberg.com/news/articles ... ld-economy.
5. What does it mean for the the world’s biggest economy?

A run-up in oil prices poses a lot less of a risk to the U.S. than it used to, thanks to the boom in shale oil production. The old rule of thumb among economists was that a sustained $10 per barrel increase would shave about 0.3 percent off of U.S. output the following year. But tallies now, including that of Moody’s Analytics chief economist Mark Zandi, pencil in a hit of around 0.1 percent.

While the diminishing American reliance on imported oil has positive economic consequences at the industry level, poorer households would feel the weight of higher prices at the pump. They spend about 8 percent of their pre-tax income on gasoline, compared to about one percent for the top fifth of earners.

As usual the poor take it in the shorts.
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Re: THE Price of Crude pt 14

Unread postby jawagord » Thu 15 Nov 2018, 12:57:59

Why are oil prices high, why are oil prices low - politics!

When U.S. President Donald Trump asked Saudi Arabia this summer to raise oil production to compensate for lower crude exports from Iran, Riyadh swiftly told Washington it would do so.

But Saudi Arabia did not receive advance warning when Trump made a U-turn by offering generous waivers that are keeping more Iranian crude in the market instead of driving exports from Riyadh’s arch-rival down to zero, OPEC and industry sources say.

Angered by the U.S. move that has raised worries about over supply, Saudi Arabia is now considering cutting output with OPEC and its allies by about 1.4 million barrels per day (bpd) or 1.5 per cent of global supply, sources told Reuters this week.

https://www.theglobeandmail.com/busines ... umps-iran/
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Re: THE Price of Crude pt 14

Unread postby onlooker » Fri 16 Nov 2018, 13:38:13

China’s coming recession has pushed oil below $60


https://www.marketwatch.com/story/china ... _iLBvsofss

We may see the oil price drop much more given OPEC programmed cuts
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Fri 16 Nov 2018, 16:49:56

k - Last time I saw the stats the US exported more coal in a single year under President Obama then any other POTUS in history. Not sure if President Trump beat that record yet. As far as the "greenest POTUS in history" that just teasing those did. It's not always about you, bro. LOL. President Obama that tried to build 3 new coal export terminals on the west coast. And offered more offshore oil leases in multiple sales then any other POTUS in history (all after the huge BP Macondo blow out...including tracks offsetting the Macondo lease). And while not approving the border crossing permit of the Keystone XL pipeline did approve the increase of flow capacity of existing border crossing pipelines. And approved the Bakken oil pipeline that offset native Americans lands and also ran under a reservoir that supplied those same tribes with drinking water.

Have posted those same FACTS multiple times and not once got a response from anyone who proclaimed President Obama as the "greenest POTUS in history". LOL
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Sun 25 Nov 2018, 07:25:41

With WTI down to $50 and Brent below $60, we should start seeing a pullback in US shale drilling. I cannot make heads or tails out of this price movement but it is concerning that China's economy could be in trouble. My intuition says China keeps pulling rabbits out of hats and this market is way oversold setting up a snap back in prices.

I saw some Canadian spot prices were below $20. Ugly for oil producers there.

Canada’s heavy crude hits record low as oil patch troubles intensify
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Re: THE Price of Crude pt 14

Unread postby vtsnowedin » Sun 25 Nov 2018, 07:50:35

GoghGoner wrote:With WTI down to $50 and Brent below $60, we should start seeing a pullback in US shale drilling.

Yes of course but the time lag between price drop and reduced supply from reduced drilling is something on the order of six months to a year.
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Re: THE Price of Crude pt 14

Unread postby evilgenius » Sun 25 Nov 2018, 11:28:29

vtsnowedin wrote:
GoghGoner wrote:With WTI down to $50 and Brent below $60, we should start seeing a pullback in US shale drilling.

Yes of course but the time lag between price drop and reduced supply from reduced drilling is something on the order of six months to a year.

And how many will try to use volume to offset the per unit drop in prices? At around $50 that's very possible. Breakeven prices have fallen across the shale patch. There were a slew of articles out last year. Somewhere on this site someone brought it up. The difference wasn't that much, but it made $50 look safe.
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Re: THE Price of Crude pt 14

Unread postby rockdoc123 » Sun 25 Nov 2018, 11:50:29

And how many will try to use volume to offset the per unit drop in prices? At around $50 that's very possible. Breakeven prices have fallen across the shale patch. There were a slew of articles out last year. Somewhere on this site someone brought it up. The difference wasn't that much, but it made $50 look safe.


more likely that there will be a strong resurgence in hedging. When prices were rising producers who did not have a lot of debt avoided hedging but as the price dropped companies began to pick up hedges once again. If you are able to hedge all of 2019 production at say $65/bbl and the average price turns out to be $55 you will have done quite well.
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Re: THE Price of Crude pt 14

Unread postby kublikhan » Sun 25 Nov 2018, 13:15:14

ROCKMAN wrote:k - Last time I saw the stats the US exported more coal in a single year under President Obama then any other POTUS in history. Not sure if President Trump beat that record yet. As far as the "greenest POTUS in history" that just teasing those did. It's not always about you, bro. LOL.

Have posted those same FACTS multiple times and not once got a response from anyone who proclaimed President Obama as the "greenest POTUS in history". LOL
Rockman, I responded to those FACTS everytime you bring them up. The decrease in US coal production was over five times the increase in our coal exports under Obama. You keep focusing on the increase of coal exports under Obama while ignoring the much bigger fall in our coal production/consumption. Forest for the trees bro.
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Re: THE Price of Crude pt 14

Unread postby onlooker » Sun 25 Nov 2018, 13:50:12

 WTI is trading at $50.37, down $24 in 7 weeks , down by a third!
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Re: THE Price of Crude pt 14

Unread postby ralfy » Fri 30 Nov 2018, 05:51:35

http://sites.google.com/site/peakoilreports/
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Re: THE Price of Crude pt 14

Unread postby Cog » Fri 30 Nov 2018, 06:36:22

onlooker wrote: WTI is trading at $50.37, down $24 in 7 weeks , down by a third!


Opec is meeting next week. I expect the usual rabbit to pulled out of the hat to halt the slide in oil prices.
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Re: THE Price of Crude pt 14

Unread postby GoghGoner » Fri 30 Nov 2018, 06:54:44

I was thinking the same thing about the OPEC meeting. It could provide the turning point towards higher prices exactly like what happened last year.

As far as breakeven costs, associated gas is part of the picture and right now it is negative coming out of the Permian. Yes, they are paying people to take their NG. These drilling frenzies located in one region really boggle the mind!!!

Natural Gas Prices Fall Below Zero In Texas
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Re: THE Price of Crude pt 14

Unread postby KaiserJeep » Fri 30 Nov 2018, 10:15:15

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.
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Re: THE Price of Crude pt 14

Unread postby ROCKMAN » Fri 30 Nov 2018, 16:25:26

k - "Forest for the trees bro.". Sorry, bro, you are. Those coal production has nothing to do with those comments. They focus on the liberals who still want to argue that President Obama was the great defender of the environment when compared to an R POTUS when there are able FACTS to show he wasn't.

None of the stats you can show about any of the fossil fuels changes President Obama's words and ACTIONS supporting increasing imports of Canadian oil sands production and increasing exports of western coal exports from govt leases. There's the damn trees, bro. LOL.
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