but, but, butbutbut PEAK OIL!!!
Posted on 01/19/2018 12:17:01 PM PST by nickcarraway
Let's get rid of the stupid crony capitalist ethanol mandates, and put that cropland back to work growing food instead of fuel. Then, nobody will **** with us.
“Let’s get rid of the stupid crony capitalist ethanol mandates, and put that cropland back to work growing food instead of fuel.”
Oh, Hell yes. I’d like to eat beef again before I die.
We continue to import 35% or more of our net demand for crude.
Bottom line there will never be energy independence in the idea of cheap readily available oil that most people think of. We will always pay at or near world prices which means if the ME blows up our prices will skyrocket. We will have our own domestic supply that is true but only if we are willing to pay for it. If we are not then it will be exported. the fracking boom was driven by $100 oil.
How about price controls, or imported oil taxes, which more than few FRs favor, to keep prices below world market? Check the 70’s for the answer. There is no way to beat the world wide market for oil.
“Go check out how that Venezuelan oil industry is doing.”
After years of production declines, Venezuelan production has begun to rapidly collapse. December 2017 dropped 100,000 barrels per day from November 2017. In November, the socialist President of Venezuala replaced the head of the National oil company (PDVSA), installing a General with no oil experience, to conduct “a new oil revolution”.
Much of the talent has been purged, arrested, or has fled (many went to work the similarly thick Canadian oil sands deposits). PDVSA has defaulted on their bonds (Nov 2017) - now they have challenges borrowing or floating payments to fund continued operations, and creditors may soon start seizing their assets overseas (like Citgo), as well as tankers and shipments. The quality of their shipments has dropped significantly, causing a lot of customers to demand discounts or refunds. Platts reports “There is evidence of advanced stages of corrosion and deterioration in much of the country’s operational infrastructure, including pipelines, gas compression plants, crude upgraders, storage facilities and refineries.”
Venezuela is circling the drain. Their collapse of production is likely to continue through 2018, pushing global prices in the high end of the Shale band ($45-65). Oil recently cracked $70/barrel, which is fueling even more of a surge in US shale production (OPEC just raised its forecast of US output growth in 2018 to 820,000 new barrels per day).
——advanced stages of corrosion and deterioration-—
The probability of catastrophe is 100% when the place blows up
“We continue to import 35% or more of our net demand for crude.”
The balance is changing relatively quickly, in our favor. When you include equivalents (other liquids) from natural gas, ethanol and such, we are now a bit over 15 million barrels per day of production, compared to just under 20 million b/d of consumption - and growing our total production more than a million new b/d each year. US oil and gas production are both surging.
It could drop back to 29 cents/gallon and our local politicians would impose enough taxes to keep it at its current price, which presently here in eastern Washington is a about $2.70/gallon.
“There is no way to beat the world wide market for oil.”
I strongly agree with your assessment that the global market drives the price - and anything we might artificially try to change that would be more damaging than helpful.
It looks like the US and global economy (demand) is expanding - the next couple of years look like they will be strong for prices and production.
Our company does a lot of work in the Midland Texas area and that place is humming. I mean crazy humming.
Save the Wells!
Venezuelan oil is nasty. The U.S. has the capability to refine it and get the sulfur out of it. Most countries don’t have that ability. China doesn’t care. Venezuela tried to stiff them by putting water in with the crude and charging full price.
but, but, butbutbut PEAK OIL!!!
Agreed. I tried to find stats for production, consumption, imports, and exports but crude production is all that I could get a good number on. But prices are always set at the far margins of the supply demand curve.
We will be subject to the international market but it sure looks like US demand (increasing) and consumption (decreasing) will dominate that market. We came through a remarkable period of no government intervention and market forces won. I hope we can keep our hands off this industry.
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