Posted on 07/30/2017 7:28:06 AM PDT by DIRTYSECRET
Been thinking. Trump WILL make us energy dominant. Then there's Venezuela, ripe for a turnover to the sane world. Canada's pipeline and the Alaskan resources. Throw in our coal exports, LNG availability and Russia's potential(for good), he could bring the whole western world to turn against the region where everyone is crazy. Let them kill each other. No need for the Crusades.
It will never be totally shut off but pressure might now work.
but, but...I thought we were gonna take their oil for us!!!!
No More 0’ that bs PC!...?????
That’s not the way markets work.
Yes. The US could certainly do without ME oil. We are financing terrorists. The truly patriotic thing would be if we consumed only US oil.
To quote the Instapundit, “Have you hugged a Fracker today?”
JoMa
FC Barcelona has under contract one of the best players in the world - Neymar from Brazil. He just signed a 5 year contract with FC Barcelona - for a lot of money. Most of these contracts come with a release clause that can be triggered if another club wants to release the player from their contract. The release clause for Neymar is 222 million Euro’s (~$269 million). Paris St. Germaine FC (PSG) is owned by QSI - Qatari Sports Investors (search Nasser Al-Khelaifi for more info). This group also owns BeIN sports, which is a spinoff of Al Jazeera, and is heavily concentrated on soccer. PSG has so much money (oil money) that they are planning on paying the release clause of Neymar, plus guaranteeing him an annual salary of $30 million Euros for 5 years. That comes to close to a half a billion dollars for one player.
Now consider that Barcelona was sponsored by Qatar in a deal that involved FC Barcelona having a Qatar symbol on their uniforms. In part due to the tensions the Middle East Barcelona decided to go in a different direction and severe ties with Qatar. That relationship ended June 30th of this year, and now Qatar is trying to diminish FC Barcelona's roster by using oil money to pay an enormous sum for one player.
I know some will say, ‘that's just business’, and I agree, it is, and the player should be free to do what he wants (as long as contractual obligations are met). That said, this kind of oil money gets thrown around the world, and it can be very destabilizing and can solicit corruption. Consider that Nasser Al-Khelaifi also sits on the board of FIFA (the world soccer organization) and that Qatar, that didn't even have a national soccer team at the time, wound up winning the bid for the 2022 World Cup. This whole deal is under scrutiny for corruption. It's ironic to me that a country, France, that has had citizens murdered in cold blood by Islamic terrorists, sells out their premiere sports team to an Islamic nation that is under fire for financing terrorism.
But money talks, and integrity walks - the other direction with its head held low.
Trump can get the world ready for a sudden interruption. Then bomb the transmission lines feeding every oil field over there. Bridges wouldn’t hurt.
Look people. Propaganda is bad, even if it’s right wing propaganda.
Truth is in the data. You don’t like government data? Fine. Believe private industry data.
Specifically the bible of oil, BP’s annual World Statistical Review.
You can find it on the BP site. Download the spreadsheet. Study it. They lay out everything — production and consumption, for every country.
The US had LOWER oil production last year. And higher oil consumption. The US consumes about 19.5 million barrels every day. It produces less than 10. Dependency on imports is not getting better. It’s getting worse.
The big shale producers in the US are losing money hand over fist. Go to finance.google.com and type in WLL (Whiting Petroleum), EOG, CLR (Continental Resources), Anadarko . . . all have negative Earnings Per Share. They hype things like cash flow (because borrowing can improve that appearance) but when it comes to earnings . . . actual proper income, it’s all bullshit.
The average calorie travels 1500 miles to reach your mouth. Yours is not a special mouth. This is true for most developed countries. You shut down the Middle East, that’s about 40% of global supply. People won’t be able to get food. Period. You might carpool to the grocery story, but the food won’t make the trip to the shelves on trucks that run on diesel. Teslas deliver nothing. Oil does it all.
later
Yes, 2015 vs 2016 the US production is down and consumption is up...but the data goes back 10 years and shows a relatively flat consumption line, and an increase in production. I think the flat consumption line has more to do with just the oil trade, however - its an indication of a lousy economy for a decade.
But I also think the Saudi/Mideast vs USA/North America comparisons are interesting. The changes are incremental, and the Saudis certainly are king in this arena, but every indicator shows a slow chipping away at their dominance - reserves vs production, percent change in production over the last 10 years, percent change in proven reserves.
Still, on paper at least, the Saudis should dominate for the next 50 years, easily. But...I think there are indicators right now that the price slump is making it harder for the royal family to bribe their populace into staying peaceful. This is the middle east, after all...heck the Saudis and Iranians are fighting a proxy war in Syria right now...and I think there is a high probability of some civil war or other turmoil in the region, which significantly reduces its output for a while. And if that's the case, for better or worse, we're going to experience what its like to import a lot less middle eastern oil sometime or another.
The company I work for is tangentially involved with the Bakken oil industry - we don't drill for oil, but provide water, design temporary housing (man camps), have reaped the rewards of state DOT funding, etc...so I am well aware that they are losing money. That being said, I was surprised to learn recently that we were involved with a few hotel projects in Williston - surely the number of people working up there has dropped off...this was planned for even before the price drop, as companies transitioned from labor intensive drilling to just pumping and production. So I have no idea why people are still investing in infrastructure up there, but somebody still thinks there's money to be made in the future. And I tend to agree - if de-regulation of our economy spurs growth, demand will go up. Here's to hoping that any demand increase is met with domestic production.
Good info.
It’s a bit conspiratorial, but consider Quantitative Ease. If you look it up you’ll find the Fed created from thin air roughly 1/4 of the US GDP over 4-5 yrs. Rates are near zero. And there is some obscure evidence that the Dallas Fed instructed some member banks to continue to loan money to shale regardless of profit, because . . . oil is everything.
It’s hard to embrace, but money . . . hell, anything created from nothingness should not be used to measure anything, certainly not the joules from oil flow. If banks are told to loan regardless of ever getting repaid, essentially the Fed is trying to print oil. And with that persistent import/export deficit, we see why. They HAVE to. Oil is everything.
But applause for going to look up the actual numbers. Wacko right wing writers at $1/word pound out text for blogs that will get right wing readers to read what is on that blog. It’s very dangerous to do that about something as utterly vital as oil. Only pure facts are acceptable about oil.
You went and got them. Well done.
Oh, forgot to mention.
For extra eyebrow raising go back and look at the consumption growth for China and India. Look at the raw consumption numbers for Japan and Saudi Arabia. They are damn near equal! With a fraction of Japan’s population, Saudi Arabia consumes the same amount of oil.
Consumption-wise it is US, China, India (only recently passed Japan), Japan/Saudis tied for 4th. Saudis will pass them this year. US consumption up, but that largely doesn’t matter when you face consumption growth of 8% from India.
“Peak Oil” . . . you don’t have to have a peak to flat out run short. You can still be rising and run short. If consumption rises faster than it is extracted from the ground, someone is not going to get an order filled or food delivered. Then . . . they take it from someone else.
Yes.
I’m sorry, this is one area where I say, “Screw the Markets”, this is about National Security. How much blood and treasure has been lost to keep the Ay-rabs happy?
So when a bank loans on a house, it invents new money which can be used to buy materials and pay carpenters...out of nowhere. Eventually the bank collects, as the decades pass by...but if demand for homes (or shopping centers or anything else banks loan on) were to decline, the imaginary nature of that money would be apparent. IMHO, this is why politicians in this country are so keen on letting Mexican illegals in, and why politicians in Europe are bringing in 'Syrian Immigrants'.
Anyway, with the fed infusing money on one end, and banks inventing money on the other, I'm skeptical that our economy has really grown at all since the official end of the recession.
Interesting on Saudi oil consumption vs Japan. Looks like a 20% drop in consumption over 10 years...their 'lost decade' may become 'two lost decades'...and I suspect this is related to Japan's actual population decline.
I had no idea the Saudis used that much oil. Now, just a conspiratorial theory of my own - do you think the Saudis are really selling some of that oil on the black market to stab their OPEC brethren in the back, and not using it themselves, as reported?
“I’m sorry, this is one area where I say, “Screw the Markets””
When you pull into a gas station to fill up with fuel, do you ask the attendant where the oil that was used to produce their gasoline was sourced?
If not, why not?
Good call on fractional reserves. The societal reply would be money has to come from somewhere because barter is 100s of years in the past. My position is that conversation in general is not about money. Money scarcity can’t kill anyone because it can be created on a whim.
Oil scarcity OTOH can kill billions.
Japan’s population issue is certainly in play with their consumption loss/economy loss, but the quake and tsunami was pretty damn big and made it all much worse.
I am pretty sure without illegals influx US population would no longer grow but I don’t think the politicians have looked at it that deeply. They just hear from their donors that illegals make for cheaper labor.
Robots will make it even cheaper, and then you have more and more on benefits.
My overall gist is this. Oil scarcity doesn’t lead to people demanding less. It leads to them consuming less, but not demanding less — which flies in the face of economics in general for whom demand and consumption are the same thing. There is absolutely no rule of the universe that says scarce oil will be distributed uniformly. The moment that means someone didn’t get an oil order filled and can’t ship food, there will be war, and not a half-hearted war. Starvation is not something anyone will accept quietly.
The Japanese have zero oil. It’s why they bombed Pearl Harbor. FDR embargoed Texas and California oil from Japan, so Japan was going to have to get it from Indonesia, and the US fleet could stop that. So they bombed Pearl. Now, having zero oil and all of it tankered in, up along the Chinese coast, it’s the obvious way the Chinese get oil if an order doesn’t get filled. They will just confiscate the tankers. This doesn’t make them evil. They’ll have no choice.
Those islands China is grabbing WAY offshore. They understand. They may have oil so They Have No Choice. Chinese domestic oil production is falling (see the data).
Oh one last point. Recent years vs 10 yr avg. Invalid. You get price changes. Price was over $100 leading into the 2008 smash, and then recovered quickly from the recession low back up to $100+, and there it stayed until June 2014. It’s been down since. So 10 yrs isn’t really a valid measure of geology since price changes created oil from places that would not have been even drilled otherwise.
This is another extreme scenario, btw. If the price stayed low and the Fed’s lending with no desire for repayment got exposed, oil output would simply stop — until the government nationalized the industry — as it would HAVE to. Oil must flow. It can’t be allowed to stop. People starve. And so even though price change corrupts 10 year averages while pretense of normalcy is ongoing, as soon as the scenario gets extreme price can’t be allowed to mean anything. The government would get drilling going at gunpoint if necessary.
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