Posted on 03/07/2015 5:04:56 AM PST by Kaslin
Now into the seventh year of the Obama administration, what a change has been wrought in our energy security.Only half a decade ago liberals were predicting that oil production had peaked.Only last year analysts were saying that we’d never see oil below $100 again. Ever.
While the Keystone Pipeline lingers, private oil exploration and production in the United States has assured this country, for the first time in my lifetime, is the dominant player not just in oil consumption, but in oil supply, as well.
And oil price.
Analyst at UBS say the magic number is $65-$70 a barrel. Their point is that oil production in the United States has a breakeven price of $60-$65 a barrel. And since US production can better offset the production from OPEC countries than previously, the breakeven U.S. price will likely determine the overall price of oil in the market.
How did it happen? By good old fashioned U.S. innovation.
There have been shale booms in the past. My family was painfully affected by previous shale booms. But this one is permanent, thanks to technology. Just as shown way back in 1989 by Nova in the documentary The World is Full of Oil!
And that’s why liberals are so scared of fossil fuels and the Keystone Pipeline. The development has led to the best part of the recovery—jobs—and has given notable stimulus to an economy staggering under the weight of regulations.
And if I gloat a little bit today, it’s because I was right and liberals were wrong, in a "most-in-a-lifetime" way.
Here are some of the specious arguments made by the progressives against North American oil development:
Indisbelief wrote: Just throwing oil out on the market will not bring down the price. Keeping the oil here at home and causing a local glut will keep the price down. May 4th 2014-- Another Oil Train Explodes in Town; River Contaminated: Who Wants Keystone Now?
David206 wrote: Again .. You get the facts wrong ! NOT ONE DROP OF KEY STONE is for the U.S.A. All the oil is spoken for by Asian countries ALL OF IT !!!!! I fact if the pipe line is built , we will see an INCREASE of Gasoline and Diesel of at least 40 cents. Why? I'd tell ya but go look it up yourself I did. May 4th 2014-- Another Oil Train Explodes in Town; River Contaminated: Who Wants Keystone Now?
George257 wrote: As with any new technology, the first million purchasers are going to burn their fingers badly. It will be expensive until economies of scale kick in. But we have to wean ourselves off oil, unless you want the whole free world to continue funding the Muslims for the next few centuries until oil runs out anyway. – in response to Chevy Volt, Perfect Car for the One Percent, Suspends Production
Ken5061 wrote: John, it has come out that the Green River Shale Oil is still not recoverable. This came out since I told you I did not think we had found technology yet to extract that oil and it is not the same as reserves that we can use. You must have missed it. The Colorado reserves were cut by Interior because of the difficulties. Do your numbers reflect that reality or are you still in wishful thinking land? --Five Things Obama Could Do to be the Greatest President Ever, but Won’t
Here’s what I wrote back in 2012:
As I have pointed out all along, the Keystone issue isn’t about the safety of a pipeline…. The US contains well over 600 years of known reserves and that would allow the US to be a net exporter of oil. If that happens, the green economy ruse that the left has sponsored, already reeling from bankruptcies and cronyism, would collapse. It would show that there is no shortage of oil and “green” energy can not compete with fossil fuels.
Even liberals have to agree that I was right, and they were wrong.
Below you will find a report on the oil patch from my friends at Lucia Capital Management. I am not an affiliated person with Lucia Capital Management or Lucia Securities LLC.
You can watch me daily on their show Bucket Strategy Investing, which helps you put your money into short, medium and long-term buckets to help you get from here through retirement.
Oil Market Perspective
After falling 60% from a peak of $108 per barrel in mid-June, the price of U.S. crude oil (West Texas Intermediate) reached a low of $44 per barrel and has been range bound between roughly $45 and $55 during the past few months. Oil companies, investors, and even members of the Organization of Petroleum Exporting Countries (OPEC) appear to be scrambling to determine whether this is an inflection point or just a stop on the way to the bottom. While we cannot predict the future, we are taking this opportunity to put the current situation in context and provide our perspective.
The two charts below tell a great deal about the current oil price environment. Production in the U.S. peaked at an annual average rate of 9.6 million barrels of oil per day in 1970 and had declined to 5.0 million barrels per day in 2008, just as the “shale revolution” was gaining traction. Through the application of horizontal drilling and fracture stimulation technology, new supplies of oil were accessed from unconventional reservoirs such as shale. As a result, the trend was reversed, and U.S. production increased at a significant pace during the past five years, surpassing 9.2 million barrels of oil per day in early 2015.
This material should not be considered an offer to buy or sell any security or the provision of specific investment advice. Opinions expressed here are those of Lucia Capital Management as of March 3, 2015; are subject to change; and may or may not come to pass. Past performance is no guarantee of future results.
And methane on other planets. I never believed oil was a fossil fuel. I think it’s much more likely that animals went into the tar pics like La Brea, thinking it’s water. Got stuck, died. So when u find oil, asphalt, u find skeletons in it, fossils. I think oil was here from day one like gold etc.
Yeah, what is oil? Carbon and hydrogen right? Carbon is the 4th most abundant element in the universe and hydrogen is number 1. Carbon and hydrogen are everywhere. We don't need living creatures to die to get carbon. We just need a chemical reaction at temperature and pressure to get oil...the earths interior!
You can make your own fuel. Harold Bates made some in England out of chicken manure. L. John Fry made methane from pig manure in South Africa, dealing with a mountain of waste and a huge fly problem at the same time, and getting enough fuel to make electricity and hot water for all his needs at the time.
But methane might not be to your liking. My brother's idea about retrofitting his driver's seat with a funnel probably would not have worked either.
You might prefer to do the research and figure out how to "digest" cellulose fibers back into simpler chemical constituents such as butanol, which is an adequate substitute for gasoline. If you can work out how to make a vehicular fuel out of cornstalks, wheat straw, and switch grass clippings, the world will likely beat a path to your door, or perhaps away from it; one or the other.
These fuel conversions are all initially powered by the sun, but chemical energy can be made more compact than solar energy, so that's why we use chemicals in our gas tanks rather than a big solar mirror on the roof of our cars.
Did anyone else notice that after the senate approved the Keystone Pipeline, the price of gas dropped like a rock? And after Obama vetoed it, the price shot back up? How come no one, and I mean NO ONE in the media or anywhere else is making something out of this — I’m looking at you GOP.
Yep, me too. There are thousands of capped wells in the Southeast that can produce, but were not economically viable at the time they were drilled. Now, many are.
Been telling folks for 40 years that we are sitting on an ocean of oil. Got a lot of looks and called crazy many times.
I question calling oil a fossil fuel
I agree. the earth makes the stuff.
That’s ‘cause the media is dems, and oil is such an icky republican thing.
I was thinking about your brother’s idea. Given my last birthday, my own personal methane might be considered a fossil fuel.
Makes it out of what? (I want you to expand your notion.)
There's a turtle running the Senate the produces something else entirely.
I believe we ran out of oil in 1980.
Good point. Does that mean the earth is entitled to a federal subsidy?
I think it comes from dead plankton fallen to the bottom (black muck) and either lies dormant undiscovered, under former seabeds (Midwest, Mideast) or gravitates through underground passageways to coastal sites.
Otherwise, my bet is that it can be found in most places in the oceans and is being created daily by the sun, growing algae, deep ocean pressure and geothermal heat.
Mostly carbon, I would guess.
The link I provided in post 23 went to a You-tube of a guy making methane from his RV's waste storage tank. That's my brother's idea reified.
But methane isn't compact enough to serve as a vehicular fuel. Sure, you can compress it, but you can compress air for the same purpose too.
I thought they were 42 gallon "barrels".
“Even liberals have to agree that I was right, and they were wrong.”
I saw that mistake too.
They usually just try and change the subject.
But admit they were wrong? Ha! NEVER!
They are talking about barrels. Not gallons.
Despite our expectation for a turnaround, we anticipate significant volatility for an extended period of time and would not be surprised to see oil prices drop further in the next few months as a result of continued oversupply and inadequate storage capacity.
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