Mega's Weekend Oil round up

[Mega]

Iran chops oil to British/Frog buyers:-
http://www.bbc.co.uk/news/world-middle-east-17089953

Saudia cuts oil output....
http://www.bloomberg.com/news/2012-0...data-show.html

Question is the cut was because:-
a. To force up oil price?
B. Peek oil showing its head?

Mike

[davidstvz]

Re: Mega's Weekend Oil round up

Wasn't Saudi Arabia just talking about how it wouldn't let oil go over 100? We're over 100 and now they just give up?

[Mega]

Re: Mega's Weekend Oil round up

The answer to the question Dave would explain EVERYTHING that is about to happen........i read EJ's last post (well the free bit anyway) & he said we could see peek cheap oil this year........
Mike

[Mega]

Re: Mega's Weekend Oil round up

Zerohedges take:-
http://www.zerohedge.com/news/iran-s...ench-companies

[Starving Steve]

Re: Mega's Weekend Oil round up

Get rid of the eco-bunch, and America and Canada, probably Mexico as well, will be oil exporting nations.

(Gulf of Mexico deep-sea oil) + (oil from fracking shale, especially in North Dakota) + ( oil offshore of southern California )

+ ( the tar sands of Alberta ) + ( oil from fracking shale in Saskatchewan ) + ( oil from fracking shale in S.W. Manitoba )

+ ( bitumen in southern Mexico ) + ( coal to synthetic oil ) + ( oil by fracking in Ohio and Pennsylvania ) + ( oil field rejuvenation near Bakersfield in

California ) + ( the Hybernia oil field offshore of Newfoundland ) + ( oil in eastern Colorado and Wyoming ) + ( fracking

bonanzas in South Dakota and Nebraska ) + ( fracking shale to pump oil on the north-slope of Alaska )

+ ( Texas and Oklahoma bonanzas with fracking ) + ( Louisiana bonanzas ) + ( oil field

rejuvenation in Alberta ) + ( the Alaska north-slope especially with rejuvenation ) = SO MUCH OIL THAT WE CAN TELL

IRAN TO F-OFF. North America will be the world's leading exporter of oil, not the nations of the Middle-East.

And in Europe, you have the North Sea with rejuvenation by fracking. You also have oil in north-west England that can be taken with fracking technology. Your Irish Sea is just begging to be explored. Your waters off of your coasts need to be explored.

And then there are the unexplored territories such as the entire East Coast offshore of North America. Florida waters are just begging to be explored and drilled. Mexico has oil just begging to be taken offshore of its adjacent Gulf of Mexico.

THERE IS NO REASON AT ALL WHY WE HAVE TO PUT-UP WITH IRAN OR THAT ENTIRE BUNCH IN THE MIDDLE-EAST. This means the eco-frauds in the environmental movement have to be silenced, and we will prosper again.

And in addition to oil, we have nuclear, nat-gas, coal, co-generation with garbage, and hydro. So we have energy of all types in huge supply..... We don't need to continue to waste time and money with solar, wind, and tidal. Those three sources of energy were a total joke.

[vt]

Re: Mega's Weekend Oil round up

Steve,

Add to that list ethanol from Sugar. It's time to tell the sugar lobby it's over. This charade about using corn for ethanol just raises food prices. We don't need sugar.

[globaleconomicollaps]

Re: Mega's Weekend Oil round up

I have a question for you Steve. Under what circumstances would you say "I give up" these is just not enough oil in the US. What would it take for you to get a grip on reality and say "It looks to me like the cheap oil is gone in the US and no amount of additional exploration and new techniques will produce enough to bring gas prices in line with my expectations". I think you are not able to even frame the question. You are irrational and hostile to the simple truth. Chris Hedges wrote a book on the mass delusions of America "Empire of Illusion" which posits the idea that America is suffering from a mass insanity. Use the space below to explain why you think that there is sufficient oil ( and presumably gas). Waving your arms around is not an argument. You do understand that you have to establish ( with facts and figures ) what you are saying, right?

This is Gregor with an appropriately titled article:

Selling the Oil Illusion, American Style

The task of the real intellectual consists of analyzing illusions in order to discover their causes.”
~ Arthur Miller

US production of crude oil peaked in 1970 at 9.637 mbpd (million barrels per day) and has been in a downtrend for 40 years. Recently, however, there’s been a tremendous amount of excitement at the prospect of a “new era” in domestic oil production. The narratives currently being offered come in the following three forms: 1) the US has more oil than Saudi Arabia; 2) the US need only to remove regulatory barriers to significantly increase production; and 3) the US can once again become self-sufficient in oil production, dropping all imported oil to zero.

Let’s first take a look at over 70 years of US oil production.



The US is currently enjoying its second stabilization phase since the peak in 1970. (Daily oil production has rebounded from a deep hole in 2008, from below 5 mbpd to above 5.5 mbpd). The first stabilization period lasted for more than 7 years, from 1977 to 1985. While it did not reverse the overall decline trend, which had resumed by 1990, this was certainly good news, just as our current production increases are good news. But the production history laid out graphically here is instructive and gives a clear warning: It would be unwise to herald the recent uptick in domestic production with a “new era” headline. Deepwater drilling, Gulf of Mexico, and Alaska were all “new era” events in their day as well. Or so they seemed.

Now, three respectable publications have recently cast the advent of new oil extraction in America as a kind of miracle. And indeed, technologically, the refinement of hydraulic fracturing techniques — first used to extract natural gas, and now used to extract oil — is miraculous. But a technique such as this, although replicable and repeatable, will not change the fact that newer, unconventional resources are developed and produce oil at a much slower rate. One year after the Black Giant of East Texas was discovered in the early 1930s, it was producing just 1 mbpd. The US no longer has resources such as this to exploit. The history of US oil production over the past 40 years should make this clear.

However, this did not stop the Telegraph of London from making triumphant assertions in their October 23 piece:

World power swings back to America

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy.

The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d),” said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea. Total US shale output is “set to expand dramatically” as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009. The US already meets 72pc of its own oil needs, up from around 50pc a decade ago. “The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity.

(Source)

The claims made here (or should I say the conjectures here), are completely over-reaching — but worse, the data is completely wrong. This matters because the article was widely distributed and sustained a very popular position for several days on Twitter and in other media outlets. I have written extensively on the problematic nature of energy data that’s produced by the Energy Information Administration (EIA) in Washington and International Energy Agency (IEA) in Paris. So it’s not really surprising that the public, the average reader, cannot fact-check these numbers easily.

In Secrecy by Complexity: Obfuscation in Energy Data and the Primacy of Crude Oil, I explained how difficult it can be — even for journalists — to obtain a time series of commodity production and flows that is continuous, let alone understandable. For example, if one includes biofuels (which, of course, are not oil in any sense and do not contain the dense btu content of oil), perhaps one could claim that 2010 oil production in the US outpaced the rest of the world. But according to the EIA in Washington, 2010 saw China make the largest new contribution to world oil supplies at 277 kbpd (thousand barrels per day), followed by Russia at 199 kbpd, and then Canada at 153 kbpd. The United States? US oil production grew by an average 114 kbpd.

So in a world of global crude oil production currently running around 74 mbpd, we are asked to believe a new era has dawned for the United States on the back of an additional 114 kbpd? That would be funny, if it were not so ridiculous. Let’s also include the 2011 additions to US oil production, at 141 kbpd. Are you feeling excited yet? These are the volumes that will allow the US to re-conquer the world with new oil production, and wean itself off global oil imports? The New York Times is quite enthused about these “major developments,” as evidenced by this October piece:

New Technologies Redraw the World’s Energy Picture

This striking shift in energy started in the 1990s with the first deepwater wells in the Gulf of Mexico and Brazil, but it has taken off in the last decade as a result of declining conventional fields, climbing energy prices and swift technological change. The United States may now have the means to reduce its half century of dependence on the Middle East.

(Source)

Sigh. The New York Times has been selling that dream for several years now. Indeed, if you are old enough to have followed the presidential election cycle since the 1970’s, you’ll know that “energy independence” has been a standard, vague promise trotted out since the Carter Administration.

But let’s say the US did indeed want to become less dependent on foreign oil. How would the country achieve such a shift, if not through a huge increase in production? After all, the recent “rise” or stability in US crude oil production is made partially on the back of a steeper four-year production decline that carried into 2008, when the rate fell to below 5 mbpd. So far in 2011, US production of crude oil just about matches the rate last seen in 2003-2004, around 5.5 mbpd. Despite the hype, the supply side of this equation has not changed enough. Could we do something about the demand side?



So, now you know. The longest and deepest recession (actually a financial crisis and a depression) in the post-war period reduced oil consumption by 12.8%. The “miracle,” if you can call it that, of US oil independence lies not in the illusion that 5.5 mbpd of oil production can be lifted to wipe out 11.5 mbpd of oil imports. Instead, it lies in a further de-industrialization of the US economy, a huge reduction in miles driven on the nation’s roads and highways, and no doubt some energy efficiency.

Perhaps some of these are good things. Even very good things. But they are not unequivocally good things. To the extent that portions of the US economy that can shift to the power grid have done so in the past three years, for example, much of that new grid demand has been met by coal. But more broadly, it is not so much that the US is wisely and strategically conducting energy transition as a matter of policy. No, a whole tranche of the US economy has been literally kicked off oil, mainly due to the financial crisis and high unemployment, but also partly due to the inelasticity of demand in emerging markets. I would remind readers that 100% of the new demand for global oil since 2005, mostly coming from the non-OECD, has not been met by new supply. Instead, in a world of flat oil production, the resources for the developing world have come solely from a reduction of demand in the developed nations. Global oil supply is now a zero-sum game. Let’s stop litigating this fact.

Of course, no tour through the world of badly mangled energy data or energy optimism would be complete without noting the opinion of Dan Yergin. Interestingly, Yergin’s research group CERA has produced one of the best indexes of rampant cost inflation in the global oil and gas industry over the past decade. This is a key point that often eludes even the educated reader not familiar with the complexities of resource economics, and which was a ghosted irony in the New York Times article cited previously: The unconventional resources on which we now depend are complex and costly. Most important of all, they are slow. The tar sands are slow. Ultra-deepwater off the coast of Brazil is slow. However, this does not stop Mr. Yergin, who has been given free range once again to make vague, grand forecasts about future supply. In an October 31 piece in the Financial Times, he is quoted:

Pendulum swings on American oil independence

“Over the past couple of years, there has been a great U-turn in US oil supply,” says Daniel Yergin of IHS Cera, the research group. “Until recently, the question was whether oil imports would flatten out. Now we are seeing a major rebalancing of supplies.”

(Source)

It no longer amazes me to hear Yergin make such claims. U-Turn in US oil supply? A major rebalancing? Yeah, sure; whatever. This pabulum is, of course, not taken seriously by energy investors as a whole, and certainly not by some of the more notable hedge fund managers, who took it upon themselves to get out in front of oil depletion early last decade. Mr. Yergin is useful to a political complex that wishes to avoid the career risk of actually having to do something about our increasingly uneconomic transportation systems and the developed world’s dependence on oil. This is as true here in the States as it is in Europe. Indeed, why take the political risk of telling Americans they should choose to transition away from automobiles, when price will start to do some of that work regardless?

Department of Transportation: VMT – Vehicle Miles Travelled, 12 Month Moving Average on All Highways, (in Billion Miles):

Continuing with our theme, the Telegraph of London was completely wrong when it claimed that the US now meets 72% of its own oil needs, up from 50% a decade ago. Worrying to the cause of mathematical accuracy in journalism, that 72% figure nearly describes the amount of crude oil the US must import — which is currently running at 68% of US consumption. Moreover, given the peak and decline in VMT (vehicle miles driven), we once again confront the myth that the US economy is recovering and has new oil supply to do so. This is a nasty combination of normalcy bias, which plugs in to the wish for resurrection and the plain old fallacy of composition. A very small amount of new oil production has been blown up beyond all scale and proportion. To the Arthur Miller quote in the header of this essay, the question is: Why has the media presented this illusion now, to the American audience?

We need to examine even more closely, however, the actual prospects for lifting US oil production, were we to imagine a kind of War on Oil Depletion in the United States. (No, we’re never going to extract the kerogen deposits of the Green River Formation, despite the investment-opportunity (!!) spam in your email). Environmentalists probably believe for example, especially in the wake of their victory this week on the XL Pipeline, that the US is unlikely to ever adopt a full-on, drill, drill, drill policy for oil. I think that’s a mistake, and I would point to a country like Australia, which, despite a new tax on carbon, has increasingly become a single, vast territory of resource extraction.

Unfortunately, our oil transition effort has only just begun. It’s still taking place only in very minor fashion, at the margin. The balance of this decade must be tackled first, and it will be felt as an ongoing battle between oil prices bumping up against a ceiling as economies repeatedly fail to recover.

In Part II: How To Postion for the Next Great Oil Squeeze, I also show the specific data on US Imports of crude oil, and why Canada, with its very slow-flowing tar sands, is hardly going to save the US, XL pipeline or not. Most importantly, I will explain how oil depletion will likely mean quite a profitable future for America’s independent oil and gas companies and address the key questions: how can the average investor position themselves for the next great oil demand shock? and when will it happen? All within the context of overall, energy-induced economic decline in the OECD, as resource depletion of oil — which remains the master commodity and the primary energy input to the global economy — means that a higher level of economic volatility will be the new normal until energy transition unfolds more fully.

Click here to access Part II of this report (free executive summary; enrollment required for full access).

As for me I'm coming around to the algae idea.

[Southernguy]

Re: Mega's Weekend Oil round up

Personaly, SS´´s talk about the "ecofrauds" and the "abundance" of oil and gas all over the world doesn´g bother me. It´s somehow pictoresque.
What worries me is when he talks about "trashing" entire cities......

[Starving Steve]

Re: Mega's Weekend Oil round up

Hi Southern Guy:

If the Allies before WWII would have trashed a few German cities, this Adolf Hitler would have been thrown out of office. The German and Austrian people would have seen Der Fuheir as the paper-hanger nobody he really was. But the Allies tried to make land deals with Hitler to keep peace (as per the Soviet Union) and the Allies tried to compromise with Hitler (as per Britain), and the Allies tried to pretend that Adolf Hitler and Hitlerism was just a foreign affair of Europe which would have no impact upon America (as per the United States under FDR ). The latter type of appeasement happened because America had just been dragged into WWI, so the Americans naturally felt that Europe would always have wars and would always be "a "basket case", not worthy of anymore foreign interventions and U.S. war dead.

So we had no less than three types of appeasement: land deals to make Hitler happy; peace treaties to appease Hitler; and isolationism to ignore Hitler.

As per the menace of Iran to-day, I would think the best policy would be to fight them now, and before they get their atomic bomb. Unlike Pakistan which wanted an atomic bomb only to resist India and to equal India's military strength, Iran appears to be quite serious about using its atomic bomb once it develops its atomic bomb.... And that is new. That kind of provacative foreign policy reminds me of nazi Germany's provacative foreign policy pre-WWII.

Even more troubling, Iran appears to want to use its atomic bomb ( once it completes its development of it ) to satisfy some scripture in their religion and end-up as a nation in Heaven..... I would take Iran seriously.

Would you take a homocide-bomber seriously? You darn well better!

[Starving Steve]

Re: Mega's Weekend Oil round up

Hi Global Economic Collapse:

I disagree with you totally. First, although oil will no longer be $30 per barrel, I envision oil to hover around $70 or $80 per barrel in terms of to-day's U.S. dollar value. I do not see a long-term future for oil at $100 +, anymore than I see a future for $35 per ounce gold now at $1700 + per ounce. But let me continue: oil is in astronomic supply worldwide-- or will soon be-- but the oil is going to come from the ocean floor and from fracking, especially from fracking in old oil fields.
So, I agree that the good old days of 39.9 cent per U.S. gallon of gasoline will never return, I do not see gasoline having a future at $4 per gallon, at least not for long. The bottom line is that oil costs more to pump than before, but there is more oil than ever before to pump. That's the kicker: Oil will not be scarce any longer.

The beauty of the future for oil, if we develop our own oil fields, is that civilized nations will no longer have to buy oil from the Middle-East. We will no longer have to take the abuse that we have had to endure up until now from nations like Iran. There will be no more 9/11's because we won't allow the homocide-bombers ( or homocide-hyjackers ) to get anywhere near our shores, and we will no longer have to endure the nations these killers come from. Tolerance will come to mean that we will no longer have to tolerate killers in order that we might not offend the oil exporting nations that these killers came from.

Will cheaper gasoline hurt oil company profits? No. Oil companies will just sell more gasoline and at lower production cost. And if gasoline prices continue at $4, whatever gasoline the oil companies do sell would allow for delicious profits even with high pumping costs. Either way, the oil companies win.... So it doesn't matter to me financially what happens to oil, either way my stocks will do well. But I am hoping that oil prices drop in order to end the current Great Recession and to allow us all to live decently once again.

Now as far as my list of places which will soon have oil fields pumping oil, I forgot to mention Alabama, Tennessee, and Kentucky. I also forgot western New York and eastern New Mexico.

Finally, I see the environmental movement as very dangerous to-day and very anti-humanity. That propaganda against Gulf of Mexico oil development was an outrage. Also, the environmental bunch just a few days ago was trying to block the construction of a major pipeline to ship oil from Alberta's northern tar sands, southern Saskatchewan, south-west Manitoba, No Dak, So Dak, western Nebraska, eastern Montana, eastern Wyoming, eastern Colorado, Kansas, Oklahoma, eastern New Mex, and the Texas pan-handle--- all south-eastward to the Gulf Coast refineries. The world needs that oil; it needs that pipeline. America needs it. Canada needs it..... So why did the eco-frauds block it?

I thought I hated the Republicans in America, especially their outrageous religious rightwing. But after seeing the activities of the environmentalists in recent years, I am shocked. That bunch are the worst of the WORST, if that were possible!

LEAN FORWARD and that means to me, progress in America/Canada/Mexico to improve the lot of common people, like you and me. We want national health insurance, a mild and controlled de-flation, affordable homes, affordable food, affordable energy, jobs, income, dignity, and a future.

Finally, I won't even get into a discussion here of what that environmental bunch did to me in British Columbia when they hand-cuffed me to a bed in room 6A of Victoria General Hospital, their psychiatric floor. I shall leave that discussion for another post here. But the point is that this environmental movement to-day is way out of line--- worse that the Republicans ( and Tories in Canada ) could ever be!